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2023 (4) TMI 1307 - PUNJAB AND HARYANA HIGH COURTReopening of assessment u/s 147 - nature of expenses - upgradation and development of various softwares - notice issued after a period of 4 years - assessee did not provide any explanation as to why the said expenses should be considered as revenue and not capital expenditure and the assessing officer had recorded reasons - HELD THAT:- After more than 4 years, the only reason for initiating reassessment proceedings is that only 30% to 60% depreciation could be given and rest of the amount is to be taken as capital. This change of opinion cannot be made a ground for reassessment. Once, the AO had accepted the return and treated above said expenditures as revenue as these were incurred only to facilitate the business of the assessee who is engaged in the business of advertising and marketing communications. Further, the expenditures were disclosed at the time of making original assessment which were rightly treated as revenue. Thus after a period of 4 years, only on account of change of opinion, re-assessment proceedings cannot be initiated. In Kitchen Express Overseas Ltd.'s case [2017 (12) TMI 1127 - GUJARAT HIGH COURT] it has also been held that any expenditure incurred on purchase of software, software developments and services to facilitate existing infrastructure is to be taken as revenue and not capital. Thus writ petition is allowed and initiation of re-assessment proceedings are set aside on both the counts i.e. delay and merits. Decided in favour of assessee.
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