TaxTMI 
TaxTMI 
2012 (9) TMI 333
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....rores. On such Written Down Value, the petitioner had claimed depreciation at the rate of 40%. In the second half of the year relevant to the assessment year 1996-1997, the petitioner had made fresh purchases of such commercial vehicles and supplied to one Shriram Transport Finance Co. Ltd. on lease. On such purchases of commercial vehicles, the petitioner claimed depreciation at the rate of 20% being 50% of available depreciation for full year. 2.2) The return filed by the petitioner was taken in scrutiny. The Assessing Officer under his communication dated 21.10.1998 raised several queries with respect to various issues arising out of such return. In particular, with respect to depreciation on the vehicle, he called for following details : "19. Details of vehicles on which depreciation at the rate of 40% is claimed." 2.3) In response to such queries, the petitioner filed replies. Under reply dated 22.2.1999, the petitioner supplied full details of the depreciation claimed on the purchase of the vehicles. It would be useful to take note of the complete details thereof. The petitioner conveyed as under : "In reply to your letter dated 21.10.1998, we are submitting herew....
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....4.3.1999, though he made several adjustments; with respect to claim of depreciation of the petitioner referred to above, he made no disallowances. 3. It is this assessment which the Assessing Officer desired to reopen for which he issued notice dated 20.6.2002. We may record in brief that previously the attempt on part of the Assessing Officer to reopen the assessment came up for consideration before this Court in a writ petition filed by the present petitioner. There was a difference of opinion between the two members of the Bench who heard such petition. Such difference was resolved through third member's opinion in case of Garden Finance Ltd. v. Assistant Commissioner of Income-tax reported in 268 ITR 48 who permitted the petitioner to raise objections to the proposal of reopening in terms of decision of the Apex Court in case of GKN Driveshafts (India) Ltd. v. Income-Tax Officer and others reported in 259 ITR 19. Thereupon the petitioner raised detailed objections before the Assessing Officer which when were turned down the present petition came to be filed. 4. The Assessing Officer had recorded reasons for impugned notice of reopening. Such reasons read as under : "Th....
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....t he farmed. Such assessment cannot be reopened beyond a period of four years for the reasons recorded by the Assessing Officer. Counsel submitted that even in the reasons, the Assessing Officer has nowhere stated that income chargeable to tax had escaped assessment for the failure on part of the assessee to disclose truly and fully all material facts. Counsel lastly submitted that in the reasons, the Assessing Officer recorded that on verification of depreciation statement attached with the return of income, it was noticed that higher depreciation was claimed. It would thus emerge that there was no new material outside of the assessment proceedings on the basis of which the Assessing Officer could form a belief that income chargeable to tax has escaped assessment. He submitted that notice was thus bad in law and therefore be quashed 6. On the other hand learned counsel for the Revenue made an attempt to suggest that in the original assessment the assessee had not made true and full disclosure. Notice of reopening beyond four years also therefore, was valid. He relied on the reasons recorded by the Assessing Officer to contend that income chargeable to tax had escaped assessment....
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....pany during the second half of the year and therefore, half of otherwise available depreciation could be claimed. The company specifically pointed out that "we have purchased vehicles and the said vehicles were given on lease. The lessee has used the said commercial vehicle for the business of running them on hire. We also draw your kind attention that, the re is no requirement in Section 32 or in the rules there under that the owner of the commercial vehicles shall use the vehicle himself for the business of hire. We rely on following decisions ....." 9. Thus full facts were laid before the Assessing Officer in context of the petitioner company's claim for depreciation at the higher rate on commercial use for running on hire. The petitioner in fact firmly asserted that though such vehicles were leased out, the lessee had used such vehicles for the business of running them on hire and that therefore, as per the statutory provisions and the decisions of the Courts, the company would still be entitled to higher rate of depreciation. As already recorded, we are not concerned with the validity of company's legal submissions in this respect. We are only drawing a firm conclusion that....