TaxTMI 
TaxTMI 
2017 (7) TMI 608
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....assessment under section 148 of the I.T. Act and dismissing the claim of assessee on account of depreciation claimed on warehouse building @ 25%. Briefly the facts of the case are that the assessee company filed return of income on 01.12.2003 showing income of Rs. 22,35,015/-. The case was assessed under section 143(1) of the Act at the retuned income. The case was reopened under section 148 of the Income Tax Act. The reasons are recorded in the impugned orders in which the Assessing Officer noted on perusal of the chart of the fixed assets and allowable depreciation furnished by the assessee that assessee has shown warehouse under the head 'Plant and Machinery' and claimed 25% depreciation on it amounting to Rs. 2,49,170/- i.e. 25% of Rs. ....
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.... only and disallowed by Assessing Officer, therefore, Assessing Officer reopened the case under section 148 of the Act. The assessee reiterated same submissions before ld. CIT(Appeals). It was also submitted that notice under section 154 of the Act was also issued but it was not decided till proceedings under section 148 of the Act have been initiated. It was further submitted that notice under section 148 of the Act have been issued on mere change of opinion. 4. The ld. CIT(Appeals) noted that re-opening of the assessment on the basis of an error pointed out by the Audit Party has been held valid by the Hon'ble Supreme Court in the case of CIT Vs P.V.S. Beedies Pvt. Ltd. 237 ITR 13. The ld. CIT(Appeals) also noted that in this case,....
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....ter considering rival submissions, I do not find any merit in these grounds of appeal of the assessee. It is admitted fact that return was merely processed under section 143(1) of the Act, therefore, there is no question of forming any opinion on claim of the assessee at assessment stage. Therefore, there is no change of opinion in this case. Hon'ble Delhi High Court in the case of Indu Lata Rangwala Vs DCIT 384 ITR 337 held as under : Held, dismissing the petition, that the return having been processed under section 143(1) of the Act, there was no occasion for the Assessing Officer to form an opinion on whether there was any escapement of income. The reasons to believe revealed that the Assessing Officer on going through the r....
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....was not able to explain as to how the warehouse was plant and machinery in the case of the assessee. The assessee, merely claimed before the authorities below that the apparatus of the businessman by which he is carrying on business, may be termed as 'Plant'. However, the authorities below have noted that nature of business of the assessee was running of a Container Freight Station which is an infrastructure facility only. Therefore, it was correctly held to be 'building' only. Even during the course of arguments, nothing is explained as to how warehouse in the nature of business of the assessee was plant and machinery so as to claim higher depreciation. Merely because in earlier year, warehouse was forming part of the block of asset on whi....
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....plained that while finalizing the balance sheet of the assessee company, the said amount was shown as 'unsecured loan' by an oversight instead of 'security'. Provisions of Section 2(22)(e) of the Act can be attracted to the shareholder only as is held by the Hon'ble Rajasthan High Court in the case of CIT Vs Hotel Hilltop 313 ITR 116. The Assessing Officer, however, noted that shareholders of both the companies are common and noted their share holding. The Assessing Officer did not believe the Licence Deed because it is on plain paper with the signature of authorized persons and is not registered. The Assessing Officer, accordingly, added the amount to the income of the assessee under section 2(22)(e) of the Act. The assessee reiterated....
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....concerns, would not be significant to attract the provisions of Section 2(22)(e) of the Act. The assessee explained before authorities below that the amount received is 'security' and filed copy of the Lease Agreement and copy of the rent account also which is coming up from earlier years. Therefore, there is no reason to disbelieve explanation of the assessee. Merely because licence deed was on plain paper and not registered, would not be ground to reject contention of the assessee. The factual findings shall have to be given by the authorities below whether the amount received was 'security' from this concern and whether assessee was a shareholder in the company from whom security have been received. In case of negative factual findings o....