2016 (7) TMI 1528

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....edings are bad in law.  Without prejudice to that, Revenue is also contesting that CIT(A) erred in directing depreciation at 40% on wheel loaders and wheel graders as against depreciation at 25% allowed by the AO. None appeared for assessee. The appeal was disposed off after considering the submissions of Ld. DR exparte assessee-respondent.   2. In the assessment of assessee originally completed u/s. 143(3), the AO has allowed the depreciation as claimed by assessee on wheel loaders and wheel graders at 40%.  After completion of the assessment, the subsequent AO noticed that these two items require depreciation only at 25% under the head 'Machinery and Plant' and allowance of depreciation at 40% as motor-vehicle as result ....

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....mself has recorded at para 2.1 of assessment order that, "from the assessment record it was noticed that ...................................................", which shows that the material relied on by the Assessing Officer to initiate reopening proceedings were already on record and reassessment proceedings were initiated only on the basis of change of opinion.  Since no new material is on record nor relied on by the Assessing Officer to initiate the reassessment proceedings, the same cannot be said to be validly initiated.  In view of the above and also respectfully following the ratios laid down by the Hon'ble Supreme Court in the case of Kelvinator India Pvt. Ltd., Vs. CIT (2010) in 32 ITR 561 (SC), the reassessment procee....

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....holding that the motor vehicles designed for special services are to be treated as motor vehicles, the appellant is eligible for depreciation @ 40% as claimed.  Reliance is specially placed on the decisions of Hon'ble Karnataka Tribunal in the case of Bothra Shipping Services Vs. CIT (ITA No. 586/Kol/2010) and CIT Vs. Gaylord Construction (2010) 190 Taxmann 406 (Ker).  Accordingly, the ground of appeal is allowed".   6. After considering the detailed submissions of the DR and perusing the Paper Book placed on record, I am of the opinion that there is no merit in Revenue's contentions.  As seen from the assessment order passed u/s. 143(3) originally, AO has considered the claim of depreciation and made certain disa....