TaxTMI 
TaxTMI 
TaxTMI 
2016 (6) TMI 1283
X X X X Extracts X X X X
X X X X Extracts X X X X
....1) 31.03.2010* 19.11.2014 6.4.2015 16.11.2015 26.2.2016 2009-10 28.9.2009 143(3) 29.12.2011 25.11.2014 6.4.2015 18.11.2015 26.02.2016 2010-11 29.9.2010 143(1) 31.3.2012* 18.11.2014 6.4.2015 3.2.2016 26.02.2016 2011-12 28.9.2011** 143(3) 21.2.2014 18.11.2014 6.4.2015 18.11.2015 26.02.2016 2012-13 30.9.2012 . 143(3) 31.3.2015 N.A., N.A. 18.11.2015 26.02.2016 *No intimation was received in these cases, hence this is last date when the said intimation could have been received. **The said return was revised on 15.03.2012. 4. The issue involved being common in all these appeals, they are being disposed of by this composite order. The facts, for facility, are being taken from the appeal for the assessment year 2008-09. The assessee is a Limited Company engaged in the business of carrying passengers in buses on licenced routes. The buses are registered under the Motor Vehicles Act, either as stage carriages, or as contract carriages. 5. The assessee claimed depreciation on the buses @ 30% under the provisions of Para-III(3)(ii) of Appendix-1 of the Income Tax Rules, 1963. This claim of the assessee was allowed by the AO in scrutiny assessmen....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Rules, 1962, which was rightly allowed to the assessee by the AO while framing the original assessments; that the completed assessments of the assessee were reopened on this very ground, i.e., that the assessee was not entitled to depreciation @ 30%; that it was after duly considering the detailed reply filed by the assessee, that the proceedings u/s 147 of the Act were dropped; that the Pri. CIT illegally issued notices u/s 263 of the Act under the aforesaid circumstances, even though, the orders passed by the AO were well reasoned detailed orders passed after due application of mind; that the assessee filed the detailed reply before the Pri. CIT, in response to the notices u/s 263; that the Pri. CIT has taken note of these replies in the impugned orders; and that however, again illegally, the Pri. CIT has not discussed the merits of the submissions made by the assessee in its said replies, wrongly concluding that the assessee was not entitled to depreciation @ 30% and it was due to this reason, that the assessment order were erroneous and prejudicial to the interests of the revenue. 12. The Id. counsel for the assessee has placed reliance on, inter alia, the order dated 17.01.2....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Corporation' (supra) (v) 'CIT v. Madan Lal & Co.' [2002] 254 ITR 445 (vi) Order dated 16.03.2011 passed by the Bangalore Bench of the Tribunal, in IT Appeal Nos.734 & 735/Bang/2010 in the case of 'Northern Western Karnataka Road Transport Corpn. Hubli v. Dy. CIT'. (vii) 'CIT v. Bansal Credits Ltd.' [2003] 259 ITR 69 (viii) 'Asstt. CIT v. Solapur Siddheshwar Sahakari Bank Ltd.'[2015] 57 taxmann.com 183 (Pune - Trib.) 16. The AO observed that the case of the assessee was squarely covered by 'Balakrishna Transports' (supra), 'Sharma Motors Service' (supra), 'Sarojini Transports (P) Ltd.' (supra) and 'Pepsu Road Transport Corporation' (supra), as also the other decisions (supra) cited by the assessee. 17. It was on this basis, that the proceedings u/s 147 of the Act were dropped. It would be appropriate to reproduce the relevant portion of the order hereunder: "7. Having heard the assessee, it is seen that the case of the assessee on this point is squarely covered by the judgment of the Hon'ble High Court of Kerala in the case of CIT v. Balakrishna Transports as at sl. No. 1 above, as well as the Hon'ble....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on hire; and that as such, it is not necessary that a single person should take an entire bus on hire, instead of different persons paying separate fares. The entailment of depreciation was held to be 40%. 21. In 'Pepsu Road Transport Corporation' (supra), 'Sarojini Transports (P.) Ltd.' (supra), was followed. 22. The AO has duly examined the above case laws and it is only thereafter, that the reopening proceedings were dropped. The other case laws referred to by the assessee were also taken into consideration. 23. In 'Bansal Credits Ltd.' (supra), it has been held that higher rate of depreciation in respect of, inter alia, motor buses, is admissible. It is the end user of the specified percentage, which is relevant for determining the percentage of depreciation; and that there is no requirement that the assets are to be used by the assessee for the purposes 'his' business or profession. The income derived by the assessee-company engaged in the business of leasing out commercial vehicles owned by it, from such leasing, was treated as the business income of the assessee and it was observed that it could not be held that the vehicles in question wer....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t to the discretion of the person taking the thing on hire. In other words there is no interference by the owner. Judged from this yardstick the terms and conditions governing a passenger travelling by a bus are entirely different inasmuch as the passenger has no discretion whatsoever because the bus will ferry passengers between fixed points, stop at the predetermined stations without caring for the convenience of an individual passenger and will operate at the fixed time schedule only. Therefore, it is fallacious to describe this as a hiring of a bus by a passenger or a number of passengers. In fact, passengers travelling by a bus purchase only a right to travel between the fixed points as per the terms and conditions of the transporter. As against this, if the bus is hired by a person or a group of persons then the same will ply between the points determined by such persons and at the timing of their choice. This right to run the bus at convenience of the person hiring is missing when a person travels as an ordinary passenger as compared with a person hiring a bus. Apart form this, the words 'motor buses motor lorries and motor taxies used in the business of running them on ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....over, in 'Malabar Industrial Co. Ltd. (supra), the Hon'ble Supreme Court has held that when the AO adopts one of the courses permissible in law and it has resulted in loss of revenue, it cannot be treated as erroneous or prejudicial to the interests of the Revenue, unless the view taken by the AO is unsustainable in law. Here, as discussed, the view taken by the AO stands taken only by following the different judicial decisions which hitherto hold the field and as such, it cannot be said to be a view unsustainable or perverse view. 28. Then, as also held in 'Radhey Shyam Agarwal (HUF)' (supra), the contention of the assessee having been accepted by the AO after due application of mind on the material available, the Id. Pri. CIT was not justified in invoking the provisions of section 263 regarding this issue. It goes without saying that it is not permissible in law for the Pri. CIT to step into the shoes of the AO and pass fresh assessment order after reassessing the case, as held in 'Ved Parkash Contractor v. CIT' [2016] 175 TTJ (Chd) (UO) 19. As in that case, the Pri. CIT herein also has reframed the assessment, not leaving any scope for the AO to re-do th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the statutory period of two years, from the end of the previous year in which the assessment was framed, i.e., in Nov, 2015. Therefore, according to the assessee, the issue of disallowance u/s 14A of the Act ought not to have been raised by the Pri. CIT in the concerned notices, the issue of disallowance u/s 14A having not been discussed in the reassessment proceedings for all these years. For this, reliance has been placed on 'Cheminvest Ltd.' (supra) and. 'CIT v. Alagendran Finance Ltd.' [2007] 162 Taxman 465 (SC) and 'CIT v. ICICI Bank Ltd.' [2012] 343 ITR 74. 34. Concerning the assessment year 2012-13, the stand of the assessee is that the issue was discussed in detail by the AO while passing the assessment order. An inquiry letter dated 18.11.2014 (APB-78) was issued. The assessee filed reply dated 17.12.2014 (APB79 to 97). The AO made full application of mind while framing the assessment. 35. The Id. DR, on the other hand, has strongly relied on the order under appeals. 36. In this regard, the proposition settled in 'DLF Ltd.' (supra) is that the powers u/s 263 of the Act cannot be invoked for making disallowance u/s 14A of the Act. While o....