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2015 (8) TMI 425 - HC - Income TaxReopening of assessment - whether allowance of 'terminal' depreciation, which allowance is not allowable under any provision of the Act tantamounts to change of opinion ? - Held that:- The term "depreciation", as ordinarily understood in the context of the Income-tax Act, 1961, has been considered in the case of I. C. D. S. Ltd. v. CIT [2013 (1) TMI 344 - SUPREME COURT ] which was concerned with the interpretation of section 32 of the Income-tax Act, 1961 that Depreciation is the monetary equivalent of the wear and tear suffered by a capital asset that is set aside to facilitate its replacement when the asset becomes dysfunctional. Applying the above interpretation of section 32 of the Act in the instant case we have no manner of doubt that the assessee had in fact claimed depreciation as contemplated under section 32 merely because it was termed as "terminal depreciation" was no reason to disallow the claim. The Tribunal has relied, and, in our view correctly, upon the decision of the hon'ble Supreme Court in the case of CIT v. Kelvinator of India Ltd. reported in [2010 (1) TMI 11 - SUPREME COURT OF INDIA] which held that the concept of change of opinion should be used as a test to check any abuse of power by the Assessing Officer. In our view, the test is correctly applied in the present case and there was no occasion for the Assessing Officer to reopen the assessment without any tangible material which formed a live link to the formation of reason to believe escapement of income. There is nothing to show that he had reason to believe that income had escaped assessment. Mere description of the depreciation claimed as "terminal depreciation" could not have justified the conclusion reached by the Assessing Officer. - Decided against revenue.
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