TaxTMI 
TaxTMI 
2014 (5) TMI 481
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....'the Act' for short). Under such notice, the respondent desired to reopen the assessment of the petitioner for the assessment year 2000-01. Brief facts are that the petitioner is a company registered under the Companies Act. For the assessment year 2000-01, the petitioner filed its return of income on 30.11.2000. In such return,the petitioner had declared nil income. The petitioner had carried forward business loss of Rs.5.72 crores (rounded off). The petitioner did not claim any depreciation of the current year in the return filed. This return was not taken in scrutiny. Intimation under section 143(1) was issued on 31.12.01. To reopen such assessment, the Assessing Officer issued the impugned notice. The reasons recorded by him for issuin....
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....eciation and unabsorbed business loss, depreciation is given hereunder: B/f A.Y. Business Profit/loss Current year Depreciation Investment allowance Business loss Current year Depreciation Investment allowance 1989-90 0 0 -1854364 0 0 -1854364 1990-91 0 0 -470451 0 0 -2324815 1996-97 -79434515 0 0 -79434515 0 -234815 1997-98 -87388064 0 0 -166822579 0 -470451 1998-99 3244063 -3244063 0 -166822579 0 0 1999-00 19006895 0 0 -147815684 0 0 2000-01 18824857 0 0 -128990027 0 0 2001-02 -6965248 0 0 -135956075 0 0 2002-03 -14331074 -329754742 0 -150287149 -329754742 0 2003-04 -19356039 -251427427 -169643188 -581182169 ....
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.... the Supreme Court in the case of Asst. CIT v. Rajesh Jhaveri Stock Brokers P. Ltd. 291 ITR 500 (SC) , the department would have considerable latitude to reopen the assessment. (2) That the Supreme Court in the case of CIT v. Mother India Refrigeration Indus. P. Ltd., 155 ITR 711, held that set off of unabsorbed business loss of the earlier years would be available only after depreciation of current year is exhausted. We are conscious that the original assessment was not made after scrutiny. It was a case of acceptance of return under section 143(1) of the Act. Under the circumstances, as held by the Supreme Court in the case of Rajesh Jhaveri Stock Brokers P. Ltd (supra), Revenue would have considerable latitude in reopening the assessme....
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....t would, thus, emerge that even in case of reopening of an assessment which was previously accepted under section 143(1) of the Act without scrutiny, the Assessing Officer would have power to reopen the assessment, provided he had some tangible material on the basis of which he could form a reason to believe that income chargeable to tax had escaped assessment. However, as held by the Apex Court in the case of Assistant Commissioner of Income Tax v. Rajesh Jhaveri Stock Brokers P. Ltd., (supra) and several other decisions, such reason to believe need not necessarily be a firm final decision of the Assessing Officer." As per the Assessing Officer, the petitioner was required to first claim the depreciation of the current year before claimin....
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....ake effect from 1.4.2002. Accordingly, when the assessee had not made claim for depreciation for the assessment year 1989-90, it was held that the Assessing Officer was not justified in allowing such deduction. In the case of CIT v. Sree Senha Valli Textiles P. Ltd. 259 ITR 77, similar view was adopted by the Madras High Court. For the assessment year 1998-99, the assessee had filed a revised return withdrawing the claim will not be applicable to prim for depreciation made earlier. Revenue had contested the same on the basis of explanation 5 to section 32(1). The High Court held that such explanation would take effect only from 1.4.2002 and will not be applicable to prior years. For the assessment year 1998-99, no deprecation was required ....