TaxTMI 
TaxTMI 
TaxTMI 
2017 (7) TMI 746
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.... in the circumstances of the case?" 3. ITA Nos. 707/2016 and 731/2016 are by the Assessee against the same impugned order dated 10th March, 2016 passed by the ITAT in ITA Nos. 4809/Del/2012 for the AY 2009-2010 and 4810/Del/2012 for the AY 2010-2011 respectively. 4. While admitting these appeals on the same date, i.e., 27th January, 2017, this Court inadvertently framed the same question of law that was framed for AY 2008-09. However, both the counsel agree that the question that ought to be framed in both these appeals is: "Whether in the facts and circumstances of the case the ITAT was correct in law in confirming the addition on account of the claim of depreciation on software?" Background facts 5. The facts in brief relevant to AY 2008-09 are that the Appellant/Assessee is engaged in the business of horticulture, agriculture and real estate. For AY 2008-09, the Assessee filed its return of income on 28th October, 2008. The Assessee maintains that for this particular AY 2008-09 no notice was received by it under Section 143(2) or 142(1) of the Act. The period of issuing such notice expired on 30th September, 2009. 6. A search and seizure operation under Section 132(1) of t....
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....ing project. Later the software was handed over to Sobha for joint use of development and marketing consequent to entering into a Joint Development Agreement dated 25th September, 2008 for 32 acres of land for group housing projects. The Assessee claimed that the project stood cancelled by a subsequent agreement dated 8th November, 2011 and that the Assessee was informed that the software had been damaged/destroyed with Sobha and cannot be returned. Accordingly the Assessee had debited the purchases in the computer software account and claimed depreciation thereon. 11. The AO concluded that the Assessee had not offered any satisfactory explanation. No documentary evidence had been produced to show that the software had been handed over to Sobha Developers. Even in respect of software destroyed no document had been produced. It was concluded that bogus purchase bills of software in the sum of over Rs. 4.24 crore had been obtained from MIL for which they had issued cheques and taken back cash from Mr. Goyal after payment of commission. By claiming depreciation on the software the Assessee had inflated its expenditure and reduced its income. MIL was held to be a non-descript company,....
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....rified the legal position that when there was a failure to issue a notice to an Assessee under Section 143(2) of the Act within six months from the end of the month in which the return is furnished or during the financial year in which the return is furnished, whichever is later, then the Assessee "can take it that the return filed by him has become final and no scrutiny proceedings are to be started in respect of that return." This CBDT circular was referred to and clarified by the Punjab and Haryana High Court in Vipan Khanna v. Commissioner of Income Tax (2002) 255 ITR 220 (P&H). 16. Mr Syali referred to the decision in Assistant Commissioner of Income Tax v. Hotel Blue Moon (2010) 321 ITR 362 (SC) to urge that the notice under Section 143(2) of the Act was a sine qua non for proceeding with an assessment under Section 153A of the Act. Reference was also made to the decisions in Commissioner of Income Tax v. Kabul Chawla (2016) 380 ITR 573 (Del) and Indu Lata Rangwala v. Deputy Commissioner of Income Tax (2016) 384 ITR 337. 17. On merits of the addition, Mr. Syali submitted that the statement recorded of Mr. Goyal behind the back of the Assessee was never furnished to the Asse....
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....anna v. Commissioner of Income Tax (supra), the Punjab and Haryana High Court referred to the same circular and observed that in case where the AO chose to verify the return and frame an assessment he has to issue a notice under Section 143(2) of the Act requiring the Assessee to produce his books of accounts and other material in support of his return. The High Court proceeded to observe: "....Thereafter he can make an assessment under sub-section (3) of section 143 of the Act. Another important change incorporated in sub-section (2) of section 143 of the Act is that the notice under this sub-section cannot be served on an assessee after the expiry of 12 months from the end of the month in which the return is furnished. Therefore, in a case where a return is filed and is processed under section 143(1)(a) of the Act and no notice under sub-section (2) of section 143 of the Act thereafter is served on the assessee within the stipulated period of 12 months, the assessment proceedings under section 143 come to an end and the matter becomes final. Thus, although technically no assessment is framed in such a case, yet the proceedings for assessment stand terminated." 21. In the presen....