TaxTMI 
TaxTMI 
2015 (11) TMI 587
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....the assessment, a sum of Rs. 20 lacs was treated as income u/s 68 and depreciation of earlier years was not allowed to be set off. However it was noticed that unabsorbed depreciation of earlier years was allowed to be set off against income of Rs. 1,22,50,000/- offered against cash deposits made in the account of Axis bank account of Franch Globusus. This amount of Rs. 1,22,50,000/- is taxable u/s 68B and therefore the excess depreciation allowed has not suffered tax. 2.1 The assesse has filed the following objections before the AO: "a. The assessee by his reply dated October 24, 2012 has objected to assumption of jurisdiction u/s 147 of the Act without showing tangible materials on the escapement of income. It has replied as under: "b. We have received a notice u/s 148 of the Act dated 11.09.2012 on 13.09.2012 for the above assessment year and in this regard we strongly object to the assumption of jurisdiction u/s 147 of the Act without showing tangible materials on the escapement of Income. c. The reopening of the proceedings u/s 147 in such circumstances are bad in law and in this regard the decision of the (Hon'ble) Supreme court reported in 320 ITR 561 is relevant ....
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....Globusus very much with the AO and he cannot reopen the concluded assessment to withdraw set off of depreciation, which was allowed in earlier occasion. 4. The ld. DR relied on the orders of the lower authorities. 5. We have heard both the parties and perused the material on record. In this case, the contention of the assessee's counsel is that reassessment notice has been given to the assessee for the purpose of reviewing of earlier assessment. According to the assessee's counsel, the assessee provided all informations for the purpose of assessment and the reassessment was done only on the basis of same set of facts and without any fresh material and it is nothing but a change of opinion. After arguing on the reasons recorded for the reopening, to substantiate his argument, he placed reliance on the decision of the Gujarat High Court in the case of General Motors India (P) Ltd. (257 CTR 123), which is kept on record. 6. We have carefully gone through the reasons recorded for reopening i.e. to withdraw the set off unabsorbed depreciation against the income of Rs. 1,22,50,000/- offered as unexplained cash deposit made in the account of axis bank . This amount of Rs. 1,22,50....
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....valid cognizance u/s 147 of the Act. The reasons recorded by the Assessing Officer clearly speak for the under assessment of tax hence, the conditions laid above stand fulfilled in so far as re-assessment proceedings are concerned. In so far as the reasons recorded, we are satisfied that the Assessing Officer has 'reason to believe' that income has escaped assessment. This fact confers jurisdiction on him to reopen the assessment. The power to re-assess post 1st April, 1989 are much wider than these used to be before. But still the schematic interpretation of the words 'reason to believe' failing which section 147 would give arbitrarily powers to the Assessing Officer to reopen the assessment on the basis of mere change of opinion, which cannot be, per se a reason to reopen the case. The Act has not given power to the Assessing Officer to review but has only given power to re-assess. There is a conceptual difference between the two aspects as the Assessing Officer has no power at all to review the assessment. The reassessment, as stated above, has to be based on fulfillment of certain preconditions but the concept 'change of opinion' has to be taken into consideration otherwise it ....
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....sec.147 which reads as under: "Production before the Assessing Officer of accounts books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso". Accordingly, we are inclined to reject this ground of appeal relating to reopening of assessment. 9. The ld. AR raised another ground that the CIT(Appeals) erred in confirming the assessment of cash deposits u/s.69B of the Act separately without the benefit of set off of carried forward unabsorbed depreciation in the computation of taxable total income without assigning proper reasons and justification. 10. The ld. AR submitted that the judgment of the Gujarat High Court in the case of General Motors India (P) Ltd. v. DCIT (257 CTR 123) cannot be applied to the assessee's case. He relied on the decision of the Tribunal in the case of Shri P. Subramanian v. ITO in ITA No.1363/Mds/2010 dated 26.7.2012, Wherein it was held as under : "5. The counsel for the assessee submits that the Assessing Officer computed the total income of the assessee at Rs. 31,98,212/- without allowing int....
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....56(1), income which is not otherwise chargeable under heads specified in A to E of section 14 shall be chargeable under the head "income from other sources". The counsel for the assessee relied on the decision of the Hon'ble Supreme Court in the case of CIT v. D. P. Sandu Bros. Chembur P. Ltd.[273 ITR 1] in support his contention that income assessed under section 68/69 shall, for the purpose of charge of income and computation shall fall under any one of the heads of income as specified in section 14 of the Act. The counsel submits that the decision of the Hon'ble Gujarat High Court in the case of Fakir Mohammed Haji Hasan vs. CIT (supra) relied on by the Assessing Officer/Commissioner of Income Tax (Appeals) is impliedly overruled by the Hon'ble Supreme Court in the case of CIT vs. D.P. Sandu Bros. Chembur (P) Ltd. (supra). The counsel further submitted that the unexplained cash deposits into SB account deemed as income under section 68/69 is also income chargeable to tax and shall form part of total income. Therefore, he submits that such deemed income also shall be assessed under any one of the five heads specified under section 14 of the Act. He submits that if the assessee is....
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....the Act does not permit set off of accumulated losses and unabsorbed depreciation against any other head of income other than the income from "profits and gains of business or profession". Being so, the above order of the Tribunal has no application to the facts of the present case. 13. In the case of Chandra Kumar v. ACIT (5 ITR (Trib) 540) (Chennai), it was held by the Tribunal as under : "Section 72 of the Income-tax Act, 1961, stipulates conditions regarding carry forward and set off of business loss year to year. Section 71 of the Act deals with inter-head set off. Section 32(2) of the Act, stipulates a special treatment to be given to unabsorbed depreciation where it is not absorbed in any given year, but this would not take it out of the head "Profits and gains of business or profession". Sections 32(2), 71 and 72 of the Act deal with difference aspects regarding set off and carry forward and have to harmoniously interpreted so that application of one of such sections would not negate the other. According to section 71(2A) of the Act, if the net result of computation of income under the head "Profits and gains of business or profession" is a loss, then a set-off of suc....