TaxTMI 
TaxTMI 
2011 (10) TMI 434
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....aged in the business of manufacturing of heavy gear boxes. The return of income for the year under consideration was originally filed by it 31-10-2001 declaring a loss of Rs.73,57,95,273/-. The said return was processed by the AO u/s 143(1) on 28-01- 32003. Thereafter the assessee filed a revised return on 27-03-2003 declaring a total loss of Rs.74,22,78,281/- after revising its claim u/s 35DDA in respect of employees separation cost. Subsequently it was observed by the AO from the balance sheet filed by the assessee along with its return of income that the assessee company has incurred expenses towards ERP software amounting to Rs.95,14,000/- and although 20% of the said expenses were only debited in the profit & loss account, the entire a....
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....ary issue challenging the validity of the order passed by the AO u/s 143(3) read with section 147 and rejecting the same, he upheld the validity of the said assessment. He also confirmed the disallowance made by the AO on account of expenses incurred on ERP Software treating the same as of capital nature. He, however, allowed the claim of the assessee for depreciation at the rate of 100% in respect of Pollution Control and Energy Saving Devices and deleted the disallowance made by the AO on this issue. Aggrieved by the order of the learned CIT(Appeals), the assessee and Revenue both are in appeal before the Tribunal. 4. In ground No.1 of its appeal, the assessee company has raised a preliminary issue challenging the validity of assessmen....
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....n in the absence of any new material coming to the possession of the AO since the assessment in this case was originally made u/s 143(1) and not u/s 143(3). In support of this contention, he relied inter alia, on the decision of Hon'ble Supreme Court in the case of Rajesh Jhaveri Stock Brokers (P) Ltd. reported in 291 ITR 500. 7. In the rejoinder, the learned counsel for the assessee submitted that the decision of Hon'ble Supreme Court in the case of Rajesh Jhaveri Stock Brokers (P) Ltd. (supra) relied upon by the learned DR has been considered by the Third Member in the decision of Telco Dadaji Dhackjee Ltd. (supra) and after taking into consideration the said decision as well as of subsequent decision of Hon'ble Supreme Court in the ca....
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....orded by the AO, there was no new material coming to the possession of the AO on the basis of which the assessment completed u/s 143(1) was reopened and this position has not been disputed even by the learned DR. Relying on the decision of Hon'ble Supreme Court in the case of Rajesh Jhaveri Stock Brokers (P) Ltd. (supra), he, however, has contended that the reopening of assessment completed originally u/s 143(1) is permissible without there being any new material coming to the possession of the AO if the reasons recorded for reopening of the assessment are otherwise valid. The learned counsel for the assessee, on the other hand, has relied on Third Member decision of the Tribunal in the case of Telco Dadaji Dhackjee Ltd. (supra) stating tha....
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....roceedings initiated by the AO u/s 147 is liable to be confirmed or quashed when there was no fresh material available with the AO and the assessment had been completed originally u/s 143(1)." The Third Member agreed with the view taken by the learned Judicial Member relying mainly on the decision of Hon'ble Supreme Court in the case of Kelvinator of India Ltd. (supra) and Eicher Ltd. 320 ITR 561. It was held by the Third Member that section 147 applies both to section 143(1) as well as section 143(3) and, therefore, except to the extent that a reassessment notice issued u/s 148 in a case where the original assessment was made u/s 143(1) cannot be challenged on the ground of a mere change of opinion, still it is open to an assessee to ch....