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2022 (4) TMI 636 - HC - Income TaxReopening of assessment u/s 147 - Notice after expiry of four years from the end of the relevant assessment year - change of opinion - Depreciation on computer software - HELD THAT:- Coming to the reasons, the reasons recorded clearly indicate that re-opening is proposed on the basis of change of opinion which is not permissible and the reasons do not disclose that there were non disclosure of material fact by petitioner though there is general statement made that petitioner’s income has escaped assessment on account of failure on the part of petitioner to disclose truly and fully all material facts. In our view, it is only made with an attempt to overcome restrictions in re-opening as per proviso to Section 147 of the Act. AO admits that in the Note 8 list of fixed assets show that during the year computer software was added and classified under the category intangible asset. According to the AO because it is intangible asset, assessee could have claimed depreciation only at 25% and not 60%. We ask ourselves what is not disclosed? - AO states it has been disclosed in the note to the Balance Sheet and it has been shown as intangible asset and after considering allowed depreciation during the original assessment proceeding at 60%. During the assessment proceedings petitioner even provided, vide letter dated 1st July, 2014, details of addition to fix assets with copies of invoices for the purchase of fixed assets. The details include the software which is the subject matter of the re-opening. Once all the primary facts are before the assessing authority, he requires further assistance by way of disclosure. It is for him to decide what inferences of facts can be reasonably drawn and what legal inferences have ultimately to be drawn. If from primary facts more inferences than one could be drawn, it would not be possible to say that the assessee should have drawn any particular inference and communicated it to the assessing authority. The explanation does not have the effect of enlarging the section, by casting a duty on the assessee to disclose inferences, to draw proper inferences being the duty imposed on the Income Tax Officer. Therefore, since the details of computer software has been disclosed and classified under the category of intangible asset in the note to Balance Sheet, it can be reasonably concluded that the duty of the assessee to disclose fully and truly all primary relevant facts has been met and it cannot extend beyond that. Once the details have been provided to the Assessing Officer during the assessment proceedings, certainly it has to be taken as having been subject of consideration during the assessment proceedings. In any case from the reasons recorded itself we are satisfied that there has been no failure on the part of assessee to disclose material facts. Reasons recorded the Assessing Officer admits that it is his change of opinion based on the same primary facts which have been considered by the Assessing Officer to complete original assessment and we say this because in paragraph no.4 of the reasons it is stated “Assessee has claimed and department allowed depreciation @ 60 percent - Decided in favour of assessee.
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