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2015 (2) TMI 208 - HC - Income TaxReopening of assessment - depreciation claimed on Goodwill and Non-compete fees at 25% cannot be allowed as they are not listed amongst the intangible assets set out in Appendix to the Income Tax Rules, 1961 - Held that:- In this case, the assessment sought to be re-opened is less than four years from the end of the relevant Assessment Year. In such a case also, the primary conditions for invoking jurisdiction under Section 147/148 of the Act has to be satisfied, i.e. one there must be reason to believe and two - income chargeable to tax must have escaped assessment. In the present case in the return of income filed for the Assessment Year 2002-03, the Petitioner had in the computation of income, disclosed the claim for depreciation made on intangible assets including the Non-compete fees. During the course of assessment proceedings, various queries were raised by the Assessing Officer including seeking a detailed working of the depreciation claimed. By letter dated 11th January, 2004, the Petitioner had supplied the necessary details and the Assessing Officer by an order dated 28th January, 2005 passed under Section 143(3) of the Act in regular assessment proceedings allowed the claim for depreciation on Non-compete fees. In fact, the order dated 28th January, 2005 passed in regular assessment proceedings specifically discusses the Petitioner's claim for depreciation and disallows the excess depreciation claimed on buildings at 10% to the extent it is in excess of the prescribed 5%. This would be further evidence of the Assessing Officer having applied his mind to the depreciation claimed by the Petitioner in respect of its block of assets. Hence, it is clear that the reason recorded in support of the impugned notice seeking to deny depreciation on Non-compete fees has been issued on account of change of opinion. Thus, it lacks reasonable belief. Consequently, the impugned notice is not sustainable. There has been a change of opinion, is evident from the fact that for earlier assessment years as well as for subsequent assessment years, the depreciation has been allowed in respect of Non-compete fees as a part of block of assets, claiming depreciation at 25%. Where facts and law are identical over different years, then the principle of consistency sets in and the Revenue is not permitted to change its stand from year to year when there is no change in the facts and the law. In these circumstances, we find that the Assessing Officer had no reason to believe that income chargeable to tax has escaped assessment on account of depreciation being claimed on Non-compete fees. - Decided in favour of assessee.
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