TaxTMI 
TaxTMI 
2018 (8) TMI 988
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.... * Prepayment premium on IDFC Term Loan amounting to Rs. 1,500,000 debited to P & L Account, being expenditure directly in relation to the capital base of the Company, is a capital expenditure but has not been disallowed in computing the total income. * Excess depreciation amounting to Rs. 875,240 had been claimed by the Company on Plant and Machinery. However, the same had not been disallowed in the tax computation. * Excess depreciation amounting to Rs. 2,541,250 had been allowed on the intangible asset "Brand Name" by wrongly adopting the WDV as on the first day of the year of amalgamation of the Company instead of adopting the WDV as on the last day of the year of amalgamation. 2. The learned Counsel for the assessee, concerned for the assessment year 2007-08, submits that the assessment itself was completed under Section 143(3) on 31.12.2009 by Ext.P2. Later, the assessee had filed an application for rectification under Section 154, in which an order was passed on 09.04.2010, produced at Ext.P3. The assessee, aggrieved with Ext.P3 order, filed an appeal, which was allowed as per Ext.P4. The assessee, hence, contends that there is no scope for a reassessme....
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....ed Mercantile Co. Ltd. v. Commissioner of Income Tax, Kerala]. Both these decisions were noticed with approval by a Constitution Bench of the Honourable Supreme Court in AIR 1968 SC 565 [Anandji Haridas and Co. (P) Ltd. v. S.P.Kasture and others]. 4. On facts, the learned counsel for the appellant/assessee would specifically invite our attention to Ext.P1 wherein all the specific issues that have now been sought to be re-opened was specifically put forth before the AO. In Ext.P1, paragraph No.1 refers to prior period depreciation and paragraph No.2 refers to brand addition. Paragraph No.9 speaks on depreciation Schedule as per the Income Tax Rules. Prepayment premium on IDFC term loan is referred to in paragraph No.12. It is also admitted that there was no explanation called for from the assessee at the scrutiny stage other than the notice issued. But on discussion, certain points arose which was explained by the assessee through the aforesaid communication. 5. Since the depreciation Schedule as per the IT Rules was not available, the learned Senior counsel ensured that the AO is present in Court with the assessment files. We had the benefit of the AO, who was conversant with....
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....nternational Ltd. (supra) also followed Kelvinator of India Ltd. (supra) and the principle laid down is to the effect that even with the amendment, the concept of 'change of opinion' survives and if there is an opinion formed by the AO at the earlier instance, necessarily, there cannot be a reassessment by the very same AO or a new incumbent in the office having a different opinion with respect to any of the aspects on which the assessment has already been completed. 7. Specific reference is made to Usha International Ltd. (supra) wherein Their Lordships have stated the broad principles in para 13, which is extracted herein:- "It is, therefore, clear from the aforesaid position that: (1) Reassessment proceedings can be validly initiated in case return of income is processed under Section 143(1) and no scrutiny assessment is undertaken. In such cases there is no change of opinion; (2) Reassessment proceedings will be invalid in case the assessment order itself records that the issue was raised and is decided in favour of the assessee. Reassessment proceedings in the said cases will be hit by principle of "change of opinion". (3) Reasses....
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....sue was raised and answered in favour of the assessee. There is also no query raised and there is only placed an explanatory note before the Assessing Officer; the details of which are not seen or discussed in the assessment order. Hence there cannot be found any change of opinion as found in serial numbers (2) or (3) of the above extract from Usha International Ltd. 10. It is in these circumstances that we look at the issue based on the principles as laid down in the decisions cited by the Revenue. Salem Provident Fund Society Ltd. (supra) considered the provision for escapement of income as available in the Act, wherein the reassessment proceedings required a correlation of the discovery of escapement from assessment to a definite information which had come into the possession of the ITO. Therein, there was no outside information available to the ITO and escapement was sought to be brought to tax on a reexamination of the files and from which it was discerned that the original assessment had been erroneous. We quote two paragraphs from the aforesaid judgment available at pages 564 and 565. "We should like to emphasise even at the outset that we are not dealing with a ....