Appeal allowed against assessment order for AY 2013-14 citing unjustified re-opening based on depreciation rate revision.

The Tribunal allowed the appeal challenging the Ld.CIT(A) order and re-opening of assessment for AY 2013-14. It held that the re-opening based solely on revising the depreciation rate was unjustified, citing a similar Bombay High Court decision. The Tribunal emphasized the need for the Revenue to demonstrate non-disclosure of material facts by the assessee for re-opening after four years. Consequently, the assessment order was quashed, aligning with the High Court's ruling, and the legal ground raised by the appellant was upheld.

---

---

Issues:
Challenge to order of Ld.CIT(A) under wrong impression of settlement under Vivad se Vishwas scheme, Re-opening of assessment u/s 148 of the Act for AY 2013-14.

Issue 1: Challenge to Ld.CIT(A) Order
The appellant challenged the Ld.CIT(A) order dated 10.08.2022, alleging a wrong impression that the dispute was settled under the Vivad se Vishwas scheme. The Ld. AR argued that a legal ground challenging the re-opening of assessment u/s 148 of the Act was also raised. The original assessment completed by the Assessing Officer allowed 60% depreciation on software expenses claimed as revenue expenditure, which was later disallowed. The appellant settled the dispute under the VSV scheme. The Ld. AR contended that the Ld.CIT(A) erred in dismissing the appeal, and the legal ground should be heard by the bench.

Issue 2: Re-opening of Assessment
The Assessing Officer re-opened the assessment for AY 2013-14 by issuing a notice u/s 148 of the Act on 09.03.2020, after the original assessment was completed on 18.06.2016. The reason cited for re-opening was to restrict depreciation on software expenses to 25% instead of the originally allowed 60%, resulting in an alleged escapement of income. The Ld. AR argued that the re-opening was based on a mere change of opinion, citing a decision of the Bombay High Court in a similar case. The Ld. DR supported the Assessing Officer's reasoning for re-opening.

Analysis:
The Tribunal examined whether the decision to revise the depreciation rate was a mere change of opinion. Referring to the Bombay High Court's decision in a similar case, the Tribunal held that the re-opening based solely on revising the depreciation rate was not justified. The High Court emphasized that re-opening after four years requires the Revenue to show failure on the assessee's part to disclose material facts. The Tribunal concurred that the Assessing Officer's re-opening lacked justification and quashed the assessment order. The Tribunal's decision was in line with the High Court's ruling, leading to the allowance of the appeal on the legal ground discussed.

This detailed analysis of the legal judgment highlights the issues of challenging the Ld.CIT(A) order and the re-opening of assessment, providing a comprehensive understanding of the arguments presented and the Tribunal's decision based on legal principles and precedents.

---