Tribunal validates reassessment citing depreciation discrepancies, remands Section 115JB issue for review.

The Tribunal upheld the validity of reassessment proceedings under Section 147, citing discrepancies in depreciation figures and decapitalization of interest. The reassessment was deemed a correction of oversight by the Assessing Officer, not a change of opinion. The Tribunal justified the reassessment under Sections 143(3) and 147 due to the AO's failure to consider revised Tax Audit Reports initially. The addition of depreciation under normal provisions was confirmed as the revised TAR reflected correct figures. The matter of adjusting book profit under Section 115JB was remanded to the AO for further examination. The appeal was partly allowed, and the order was pronounced on 22/06/2015.

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Issues Involved:
1. Validity of reassessment proceedings under Section 147.
2. Justification of the assessment order under Section 143(3) read with Section 147.
3. Confirmation of the addition of depreciation amounting to Rs. 4,20,24,089 under normal provisions.
4. Confirmation of the addition of depreciation amounting to Rs. 4,20,24,089 in computing Book Profit under Section 115JB.

Issue-wise Detailed Analysis:

1. Validity of Reassessment Proceedings under Section 147:
The assessee challenged the reassessment proceedings initiated under Section 147, arguing that the reassessment was based on the same set of facts without any new material or information, and that there was no failure on the part of the assessee to disclose all necessary facts. The assessee relied on case laws such as CIT v. Kelvinator of India and CIT v. Amitabh Bachchan, which emphasize that reassessment must be based on tangible material with a live link to the formation of belief regarding income escapement.

The Tribunal found that the reassessment was initiated due to two reasons: (a) the decapitalization of interest and commitment charges was not correctly reflected in the opening WDV of the relevant block of assets, and (b) discrepancies in the depreciation figures between the original and revised Tax Audit Reports (TAR). The Tribunal upheld the validity of the reassessment proceedings, noting that the revised TAR was not considered in the original assessment, and thus, the reassessment was not a case of change of opinion but rather a correction of an oversight by the Assessing Officer (AO).

2. Justification of the Assessment Order under Section 143(3) read with Section 147:
The Tribunal noted that the AO had not considered the revised TAR while framing the original assessment, leading to an omission and underassessment of income. The Tribunal held that the AO's oversight constituted a valid reason for reassessment, as it was not a change of opinion but a correction of a mistake apparent from the record. The Tribunal emphasized that the law allows for reassessment in cases of oversight, inadvertence, or mistake by the AO, and thus, the reassessment proceedings were justified.

3. Confirmation of the Addition of Depreciation Amounting to Rs. 4,20,24,089 under Normal Provisions:
The assessee contested the addition of Rs. 4,20,24,089 to the total income under normal provisions, arguing that the depreciation allowed on assessment was based on the revised TAR, which represented the correct statement of depreciation. The Tribunal found no merit in the assessee's claim, noting that the revised TAR reflected the correct depreciation figures and that the assessee should have pointed out the discrepancy to the AO even after the assessment. The Tribunal upheld the addition of depreciation, as the revised TAR indicated a lower depreciation claim than the original, resulting in underassessment of income.

4. Confirmation of the Addition of Depreciation Amounting to Rs. 4,20,24,089 in Computing Book Profit under Section 115JB:
The Tribunal addressed the adjustment made in determining the book profit under Section 115JB, noting that the company could provide for depreciation at different rates in its books. The Tribunal restored the matter to the AO to allow the assessee an opportunity to demonstrate that the adjustment to book profit on account of revised depreciation was either in excess or unnecessary. The AO was instructed to issue definite findings of fact in accordance with the law.

Conclusion:
The Tribunal partly allowed the assessee's appeal for statistical purposes, upholding the reassessment proceedings and the addition of depreciation under normal provisions, while restoring the matter of book profit adjustment under Section 115JB to the AO for further examination. The order was pronounced in the open court on 22/06/2015.

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