TaxTMI 
TaxTMI 
2012 (10) TMI 611
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....nion. It is submitted that reopening based on change of opinion is not permissible under the income tax law. It is submitted it be so held now. 3. The ld. CIT(A) has erred in disallowing depreciation of Rs.1,19,42,051 on cost incurred for acquiring limited Rights to use land for laying down the pipeline underneath the land as a part of the cost of pipeline (plant & machinery). It is submitted that it be so held now. 3.1 The ld. CIT(A) failed to appreciate that acquiring the right to use the land does not tantamount to acquisition of land. Factually appellant has not acquired any ownership in land but has paid compensation to obtain limited right to use land for laying pipeline which did not amount to acquisition of land. It is submitted it be so held now. 3.1.1 The ld. CIT(A) has erred in holding that appellant has acquired ownership rights in the land. Under the R.O.U. Act only limited Right of use is acquired by the Government of Gujarat and then it is vested in the Appellant. The Government of Gujarat itself does not acquire any ownership rights in the land but it acquires only right to use. As Government of Gujarat its....
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....essing Officer, the appellant's stand is that the original assessment had been completed u/s 143(3) when the entire information was available to the Assessing Officer. This particular treatment of expenses stood duly mentioned in the Notes to Accounts in the appellant's audited accounts. Since no disallowance had been made in the original assessment, taking a different view now tantamounts to review of the original assessment. It was further stated that such reassessment is invalid even within the period of four years in the absence of any tangible material found, as otherwise it would be change of opinion and hence not valid. Reliance was placed on Supreme Court decision in the case of Commissioner of Income-tax, Delhi, Appellants V. M/s Kelvinator of India Limited (2010-(ITR)-GJX-0011-SC) wherein the Delhi High Court decision in that assessee's case had been upheld. Reliance was also placed in the case of ICICI Prudential Life Insurance Company Limited Vs. ACIT, Mumbai and Rallis India Ltd. Vs. ACIT, Mumbai (2010-(ITR)-GJX-0080-BOM) as also that of Garden Silk Mils Vs. DCIT 237 ITR 668 (Guj). Also relied on the CBDT circular No.549 dated 31st October 1989 to press its points. &n....
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....ial found by the A.O. subsequently, the re-assessment proceedings initiated by the A.O. are invalid as it amounts to change of opinion on the part of the A.O. which is not permissible in law. For making this submission reliance was placed on Hon'ble Delhi High Court decision in the case of CIT Vs. Kelvinator 256 ITR 1 (Delhi) which was affirmed by Hon'ble Apex Court. Reliance was also placed on the following case laws:- 1. CIT vs. M/s Kelvinator of India Ltd. SC-IT 2. CIT vs. Kelvinator of India Ltd. [256 ITR 1 (Del)] 3. ICICI Prudential Life Insurance Company Ltd. Vs. ACIT Mumbai 4. Rallis India Ltd. Vs. ACIT, Mumbai [323 ITR 54] 5. Garden Silk Mills Vs. DCIT [237 ITR 668 (Guj)] 6. CBDT Circular No.549 dated 31st October, 1989. 7. Ritu INvestents (P) Ltd. Vs. DCIT HC-DEL-IT 8. Lucky Valley Investments & Holdings Ltd. Vs. DCIT 9. Le Passage to India Tours & Travels (P) Ltd. 10. Raj Kumar Mahajan Vs. CIT HC-DEL-IT 11. Parixit Industries (P) Ltd. HC-AHM-IT &nbs....
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..... Equipments ltd. Vs. DCIT & Ors. (Mad) 241 ITR 856 3. Claggett Brachi Co. Ltd. Vs. CIT (SC) 177 ITR 409 4. Kalyanji Mavji & Co. Vs. CIT (SC) 102 ITR 287 5. Anusandhan Investments Ltd. Vs. M.R. Singh (Bom) 287 ITR 482 Coming to the argument advanced by ld. counsel of the assessee that Revenue was not without remedy as it could have initiated 263 proceeding in this case, it was submitted by the ld. D.R. that other provisions of the act were not relevant for deciding validity of re-assessment proceedings u/s 147 of the Act. For making this submission reliance was placed on the following case laws:- 1. Honda Siel Power Products Ltd. Vs. DICT (Del) 52 DTR 353 SLP dismissed 2. CIT Vs. First Leasing Co. of India Ltd. (Mad) 241 ITR 248 3. Salem Provident Fund Society Ltd. Vs. CIT (Mad) 42 ITR 547 4. CIT Vs. India Sea Foods (Ker) 332 ITR 424. Concluding his argument ld. D.R. prayed that the re-assessment proceedings u/s 147 may kindly be held to be valid in this case and the ground taken by the assessee in this respect may kindly be dismissed. 8. Af....
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....bsp; "The mere fact that the case of the assessee was accepted as correct in the original assessment for an assessment year, does not preclude the Income tax Officer from reopening that assessment under section 147(a) of the Income tax Act, 1961, on the basis of his findings of fact made on the basis of fresh materials obtained in the course of assessment for the next assessment year." 9. In view of the above, we feel no need to interfere with the order passed by ld. CIT(A) and the same is hereby upheld. 10. In view of the above, ground Nos.1 and 2 of the assessee's appeal are dismissed. 11. In the result, both the appeals filed by the assessee are dismissed. ITA Nos.2633 & 2634/Ahd/2010 12. The common ground taken in both the appeals by the Revenue are as under:- "1. The ld. CIT(A) has erred in law and on facts in holding that cost of crop compensation shall go to enhance the value of plant & machinery and shall be eligible for depreciation at the rates claimed. 2. The ld. CIT(A) has erred in law and on facts in holding that expenditure incurred towards obtaining Right of Way (ROW), to the extent it is not in the form of security deposi....
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....f compensations has only resulted in the assessee's rights in lands only on which no depreciation is allowable and therefore he disallowed the entire claim of Rs.3,46,44,355/- for assessment year 2004-05 and Rs.7,49,41,177/- for assessment year 2005-06. In the appellate proceedings, the assessee has in turn, relied entirely on the submissions made during the assessment year 2006-07, as the facts are claimed to be identical. It was specifically pointed out that while the Assessing Officer claims to have followed CIT(A)'s order for assessment year 2006-07 but diverging from that order, he has disallowed the depreciation claim pertaining to crop compensation, which had been allowed at the first appellate stage. Besides the above, the Authorised Representative has also raised an alternative submission that without prejudice to its main stand the issue could also be viewed in terms of commercial rights of intangible nature by virtue of cost incurred by the appellant towards payment of compensation to owners/Government and therefore such intangible rights will be eligible for depreciation as a separate asset. The matter has been....
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....use of land, 2nd is crop compensation and 3rd is right of way. Ld. CIT(A) has decided that no depreciation is allowable to the assessee in respect of right to use land. Regarding right of way, it was decided by the Ld. CIT(A) that depreciation can be allowed but the revenue is in appeal. It was submitted by the Ld. counsel for the assessee that the order of CIT(A) on this aspect may be reversed and that of the A.O. can be restored. The 3rd aspect is regarding the claim of the assessee of depreciation on crop compensation. We find that crop compensation is payable only to those land owners on whose land there was any standing crop or standing trees. For the purpose of laying of pipeline, the assessee is acquiring the land and not the crop and trees which were standing on the land. But in the process of laying down the pipeline by using the land acquired by the assessee, the crop and trees standing on such land get destroyed and hence, the assessee was required to compensate the land owner in respect of such crop or trees standing on the land in addition to the land compensation. In our considered opinion, compensation for such damage to the land owner cannot be added to the cost of ....