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2019 (9) TMI 977 - AT - Income TaxReopening of assessment u/s 147 - HELD THAT:- If the reasons for reopening are (a) and (b) and during fresh assessment proceedings u/s. 147 of the Act, income is found to have escaped from assessment for some other reason say (c) and (d), then, if reasons (a) and (b) do not survive and no addition can be made for such reasons, can additions be made on the basis of reasons or grounds (c) and (d). In the present case also, this is the objection of the assessee before us that reasons were recorded in respect of under invoicing and no addition has been made on that account and therefore, the reopening itself is not valid. In our considered opinion, the facts of present case are similar to the facts in the case of Shri N. Govindaraju Vs. ITO & Anr. [2015 (8) TMI 271 - KARNATAKA HIGH COURT] and hence, respectfully following this judgment of Hon'ble Karnataka High Court, we decide this issue against the assessee and hold that the reopening is valid in the present case and accordingly ground nos. 1 to 10 are rejected. Disallowance of depreciation - assessee has acquired the mining lease and license for extraction of Iron Ore and license no. 2552 was granted by the Government of Karnataka - HELD THAT:- This is true that mining lease has been obtained by the assessee but the impugned payment paid to Chief Conservator of Forests was not on account of acquiring mining lease and right for extraction of iron ore by mining lease. This payment is on account of Compensatory Afforestation in future for which present net value has been paid by assessee to State Forest department and hence, this argument has no merit. Consortium members commenced hydrocarbons operations in the Sakhalin Block and they held 40% interest in the hydrocarbon project. Later on, the assignment agreement dated 10.02.2001 was entered into and as per this agreement, 50% of their share in the Sakhalin PSA and in a joint operating agreement to OVI for a consideration of ₹ 15,590.96 million. Consequent to the acquisition of such rights and licenses, the assessee became a consortium member and the assignors were relieved from obligation under the Sakhalin PSA to that extent. The dispute in that case was regarding this that the rights and licenses acquired by that assessee, it was claimed that it is intangible asset and on it, depreciation @ 25% should be allowed. This claim was rejected by the AO and also by CIT(A) - Tribunal decided the issue in favour of the assessee on this basis that the assessee has acquired business/commercial rights of similar measure. In the present case, we have seen that the impugned expenditure is not for acquiring any intangible asset but the payment of net present value of Compensatory Afforestation in future for which deduction is allowed by the AO to the extent of 1/20 in the present year because the assessee is eligible for carrying on mining activities for 20 years - Tribunal order does not help the assessee in the present case. Various other Tribunal orders are also cited assessee. In our considered opinion, these Tribunal orders are also not applicable in the present case because the facts are different. Revision u/s 263 - amortisation u/s 35D - HELD THAT:- In the present case, once the AO held that the expenditure incurred by the assessee for obtaining the mining lease licence cannot be categorised as preliminary and preoperative expenditure and thereafter, allowing amortisation u/s 35 D is nothing but incorrect application of law. In the case of CIT vs. Sasken Communication Technologies Ltd. [2014 (11) TMI 884 - KARNATAKA HIGH COURT] , it is noted that at the relevant point of time, two views were existing on the word “profit” in section 80HHC and this section was amended eleven times and there was a great complication and hence, two views were inherently possible and hence, subsequent amendment in the year 2005 even though retrospective would not attract the provisions of section 263. In the present case, the facts are entirely different and therefore, in our considered opinion, this judgment also does not render any help to the assessee in the present case.
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