2013 (5) TMI 361

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.... 3. Petition arises in following factual background:- 3.1 The petitioner is a company registered under the Companies Act. For the Assessment Year 2006-07, the petitioner had filed its return of income on 26.12.2006 declaring total income of Rs.61.98 crores (rounded off). Such return was taken in scrutiny. The Assessing Officer passed an order under section 143(3) of the Act on 26.12.2008. It is this scrutiny assessment that the respondent seeks to reopen for which impugned notice has been issued. 4. At the request of the petitioner, the Assessing Officer supplied the reasons recorded by him for issuing such a notice. Such reasons read as under:- "3. Reasons for re-opening assessment under section 147 of the I.T. Act, 1961 in your ....

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.... u/s. 14A of the Act to the extent of Rs.2,46,083/-. (iii) On verification of depreciation claimed by the assessee and allowed during the assessment, it is noticed that the assessee has claimed an additional depreciation of Rs.33,15,561/- @ 7.5% on Rs.4,42,07,480/- cost of plant and machinery) which has been installed in FY 2004-05 relevant to AY 2005-06. The assessee has not explained further on this issue. The deprecation in AY 2006-07 is allowable on WDV of the machinery installed in FY 2004-05, even though depreciation in that year had not been claimed. Therefore, Rs.33,14,561/- requires to be disallowed and added back into total income of the assessee. (iv) On verification of the details, it is noticed that the assessee has incur....

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....isions of section 14A of the Act and such disallowance had to be determined under rule 8D of the Income Tax Rules, 1962. (3) It was noticed that the assessee had claimed additional depreciation of Rs.33,15,561/- at the rate of 7.5% on a sum of Rs.4,42,07,480/- expended towards cost of plant and machinery, which was installed in the Financial Year 2004-05. The Assessing Officer believed that the claim of depreciation of the assessee on such machinery for the Assessment Year 2006-07 had to be worked out on the written down value of such machinery though the depreciation may not have been claimed in the earlier year. (4) It was further noticed that the assessee had made provision to which section 195 of the Act was applicable. The assess....