TMI Blog2001 (4) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... its concerning the depreciation allowable on earthmoving machinery. Considering the common issues involved, the appeals were grouped and heard together and are disposed of by this common order. 2. Mr. Ramachandran, the learned counsel for the appellant firm contended that the challenge of invoking of the jurisdiction by the CIT as barred by limitation is clearly borne out of his order. He contended that CIT refers to the order made by the Assessing Officer [AO for short] dated 31-7-1989 and states that he proposes to revise the said order. The purpose of revising the order was to withdraw the depreciation allowed on earthmoving machinery because it was used in the construction of a hotel. He pointed out that the order of Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contract for construction of a hotel, it was used to excavate the earth and move the earth so excavated for laying of foundation for construction of a multi-storied hotel building. He contended that the machinery was put to use for which it was intended and hence is entitled to depreciation as earthmoving machinery. 3. The learned Senior Departmental Representative Mr. Ravi strongly opposed the pleas raised by the counsel for the appellant firm. He contended that section 263 has undergone an amendment that is effective from 1-6-1988 and this amendment gives the CIT full powers of revision of an order made by Assessing Officer on that part that was not the subject matter of appeal before Commissioner (Appeals). He drew our attention to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. [Explanation.- For the removal of doubts, it is hereby declared that, for the purposes of this sub-section,- (a) an order passed on or before or after the 1-6-1988 by the Assessing Officer shall include- (i) an order of assessment made by the Assistant Commissioner or Deputy Commissioner or the Income tax Officer on the basis of the directions issued by the Joint Commissioner under section 144A; (ii) an order made by the Joint Commissioner in exercise of the powers or in the performance of the functions of an Assessing Officer conferred on, or assigned to, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction of any court shall be excluded. 5. The section 263 of the Act underwent a modification that was made effective from 1-6-1988 to get away from the view of Courts that the order of Assessing Officer merges into the order passed by Commissioner (Appeals) and therefore CIT could not revise the order of Assessing Officer. The theory of merger of the orders, the lawmakers felt required a review, and accordingly came with the amendment and introduced an explanation. By this amendment and explanation, the lawmaker made it clear that, the part or portion of the order of Assessing Officer that was not considered by Commissioner (Appeals) in appeal that is filed either before 1-6-1988 or after that date, is open for revision by CIT. The orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment that is initially made by Assessing Officer whether appealed against or not that all subsequent proceedings under the Act are related with in so far as it relates to determination of income under the Act. It is this assessment that gets modified consequent to the order of Commissioner (Appeals) and with reference to which the Assessing Officer passes the consequential order stating it as 'under section 251 read with section 143(3) of the Act'. The regular assessment that is not the subject matter of appeal before Commissioner (Appeals) could be reviewed by CIT under section 263 of the Act and this review is permissible within a period of two years from the end of the financial year in which the regular assessment is made. The power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eals) as observed earlier did not require the Assessing Officer to re-examine the claim of depreciation and the said order did not contain any discussion about depreciation at all. No doubt that the starting point in the modified order is the income as computed earlier but it is only to suggest that after consideration of various issues the computation of income was made and such income is undergoing change because of issues as directed by Commissioner (Appeals) in his order and therefore, could not be treated as fresh examination of all the aspects by Assessing Officer. In the instant case for both the assessment years, CIT had initiated the proceedings under section 263 of the Act in September 1991 and made his order on 25-2-1992. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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