TaxTMI 
TaxTMI 
2022 (7) TMI 994
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....uch order u/s 263 was warranted. It is submitted that it be so held now and order passed u/s 263 be quashed. 2.0 Without prejudice to above, the learned CIT erred in law and on facts in passing order u/s 263 when necessary enquiries relating to the issue under consideration were already made by the learned A.O. during the course of original assessment proceedings and thereafter an order u/s 143 (3) was passed by him. It is submitted that it be so held now. In the facts and circumstances of the case it cannot be said that there were no enquiry or the lack of enquiry on the part of the learned A.O. while framing original assessment so as to consider the order passed by him as erroneous and prejudicious to the interest of the revenue. Under the circumstances, the order passed u/s 263 be held as bad in law and liable to be quashed. It is submitted that it be so held now. Your appellant prays for leave to add, alter and/or amend all or any of the grounds before the final hearing of appeal." 3. The brief facts of the case are that the assessee filed its return of income for assessment year 2014-15 declaring total income of Rs. 25,31,420/-. The assessment u/s 143 (3) of the Income....
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.... on trucks owned by the assessee, it was imperative on the part of the A.O. to conduct enquiries to ensure whether these trucks are used by the assessee running them on hire separately from the business of trading in potatoes and whether they are eligible for depreciation @ 30%. However, the A.O. has not done any such enquiry while completing the assessment. The assessee has also during the present proceedings made various fresh submissions to substantiate its claim which was not made before the A.O. while completing the assessment. Hence, it is evident the A.O. failed to do necessary enquiries before depreciation @ 30% was allowed. The assessee has not produced any evidence to show that trucks were used for running on hire in an independent business of transportation. As submitted, they were used for delivery of potatoes to the customers but it cannot be called a business of trucks running on hire or a transportation of goods business. In any case, the A.O. has not examined whether the assessee has any business of running trucks on hire. Therefore, the assessment has been completed without conducting necessary enquires and investigations and therefore it is erroneous and also prej....
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.... whether the trucks were used for the purpose of letting out on hire. He drew our attention to page 44 of the paper book to point out that no income was earned by the assessee by way of plying the trucks on hire basis. A perusal of the financial statements would show that primarily the assessee earned income from sale of potatoes, seeds etc. but no income was earned by the assessee by plying the trucks on hire. The Ld. Departmental Representative then drew our attention to page 49 of the paper book (Form Number 3CD) at 8 (a) to point out that the assessee was in the business of "trading in potatoes". He further drew our attention to pages 58-74 of the paper book (freight earnings) to point out that the assessee earned income from potato sale only and not from letting on trucks for hire, which is a prerequisite for claim of depreciation on trucks at a higher rate of 30%. The Ld. Departmental Representative further drew attention to submission of the assessee dated 04-01-2019 at page 6 of the paper book at para 1 to point out that as per assessee's own submission, trucks are used for delivery of potatoes and related freight income is also booked in respect thereof for past many years....
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.... the course of assessment proceedings . We are somehow not persuaded to agree with the contention of the counsel for the assessee that if an incorrect/higher claim of depreciation has been allowed to the assessee in a previous year, the same shall be allowed to the assessee in the following years as well, simply for the reason that the asset was forming part of the block of assets on which higher depreciation has been allowed (albeit incorrectly) in the previous year. The Agra Tribunal in the case of Meeraj Estate & Developers v. DCIT [2014] 44 taxmann.com 431 (Agra - Trib.) held that principle of res judicata is not applicable to decision of revenue authorities and, therefore, decisions given in an assessment for an earlier year are not binding either on assessee or on department in a subsequent year. This case was affirmed by the Allahabad High Court in Meeraj Estate & Developers v. CIT [2020] 113 taxmann.com 231 (Allahabad), wherein the High Court made the following relevant observations in this context: 21. From the reading of the judgment of the Apex Court, it is clear that the judgment relied by the assessee in case of Radhasaomi Satsang (supra) was dealt by the Apex Court ....