INCOME TAX ACT, 1961

Section 147 Section 32(1)(iia)

Reassessment - Change of opinion - Disallowance of additional depreciation on new wind mills and plant and machinery acquired and installed -

Assessee was engaged in the business of manufacturing and sales of textiles (yarn and fabrics) and generation of power. The assessment was completed under section 143(3). Thereafter, the AO issued notice under section 148 dt. 15-11-2016 by recording the reasons that on going through the records, it was noticed that assessee had made additions under the head wind mills at wind power generation unit in the depreciation chart and claimed additional depreciation of 20% (10% for less than 180 days) thereupon. Assessee was allowed additional depreciation on new machinery. AO completed the assessment under section 147 by disallowing the claim of additional depreciation. CIT(A) had upheld the validity of reassessment and disallowance of additional depreciation.Held: As far as additional depreciation on windmills capitalized under the head 'wind mills at wind power generation unit' during the year under consideration was concerned and which was the subject matter of dispute, there was no specific query raised by the AO during the course of original assessment proceedings as part of notice under section 142(1) was concerned. On perusal of assessment Order, dated 17-3-2015, the matter under examination by the AO was limited to claim of normal depreciation. The matter relating to claim of additional depreciation was therefore not examined by the AO. Where the matter had not been examined by the AO, there is no question of change of opinion as there was no formation of opinion at first place. Therefore, the contentions so advanced by the AR that it was a case of change of opinion and reassessment proceedings cannot be sustained on such change of opinion was not accepted. Further, in the reasons so recorded by the AO, he had stated that by virtue of amendment brought-in by the Finance Act, 2012, the claim of additional depreciation under section 32(1)(iia) was allowable with effect from 1-4-2013 relevant to assessment year 2013-14 which ex facie suggest that such claim had been wrongly claimed and allowed in the original assessment proceedings without examination was clearly a case of excess claim of depreciation and jurisdiction had been rightly invoked by the AO under section 147.

REFERRED : CIT v. Hindustan Zinc Ltd. (2016) 241 Taxman 392 (Raj.-HC) : 2016 TaxPub(DT) 3051 (Raj-HC), ITO v. Techspan India (P) Ltd. & Anr. (2018) 255 Taxman 152 (SC) : 2018 TaxPub(DT) 1991 (SC) and Pr. CIT v. Tupperware India Pvt. Ltd. (2015) 127 DTR 161 (Del-HC) : 2015 TaxPub(DT) 3491 (Del-HC).

FAVOUR : Against the assessee.

A.Y. : 2012-13

INCOME TAX ACT, 1961

Section 32(1)(iia)

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