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TMI Blog2011 (10) TMI 229X X X X Extracts X X X X X X X X Extracts X X X X ..... order of assessment under Section 143(3). The assessee had declared a loss of Rs. 2.10 Crores. Depreciation in the amount of Rs.2.11 Crores was claimed by the assessee on fixed assets. The Assessing Officer made a general disallowance on the depreciation claimed by the assessee in the amount of Rs.20 lacs on the following grounds : "On perusal of records and details furnished during the course of assessment proceedings, it is seen that the assessee has claimed depreciation of Rs.2,11,77,238/- on fixed assets. The assessee has furnished the copies of bills of purchase of assets. It is seen that many of the capital assets are purchased at the fag end of the year. The installation and use thereof is not proved. The assessee was asked to produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchase. 4. During the course of the assessment proceedings for Assessment Year 2008-09 the assessee claimed depreciation in the amount of Rs. 81.67 lacs at 100% of the cost of an asset described as an Effluent Treatment Plant (ETP) system. The assessee, by a notice dated 11 October 2010, was requested to justify the claim and produce documents in support of evidence. In response, the assessee by a letter dated 30 October 2010 produced a copy of a bill pertaining to the purchase of equipment. The bill indicated that the asset was supplied to the assessee by a company by the name of M/s. Praneet Enviroquips Private Limited at Mohali. The Assessing Officer issued a communication dated 29 November 2010 to the alleged vendor under Section 133( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to the purchase of the said equipment. The copy of the bill indicated that the said asset was supplied to the assessee by M/s. Praneet Enviroquips Private Limited having address at D169, Industrial area, Phase 7, Mohali (PB) 160055. On an enquiry under the provisions of section 133(6) of the Act, this company denied having any transaction with the assessee during A.Y. 2008-09. The assessee could not furnish any satisfactory explanation in respect of the claim and the claim of depreciation of Rs.81,67,860/- was disallowed and added back to the income of the assessee holding it to be a bogus claim." The reasons further state that on perusal of the details of additions to fixed assets, filed during assessment proceedings for the year under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there must be a failure on the part of the assessee to fully and truly disclose all the material facts necessary for the assessment for that assessment year; (iii) The jurisdictional condition is absent in the present case and the assessment is sought to be reopened to circumvent the order passed by the CIT (Appeals). 7. On the other hand, it has been urged on behalf of the Revenue by the learned counsel that in the order of assessment for Assessment Year 2004-05, the Assessing Officer had made an ad hoc disallowance of Rs. 20 lacs on account of depreciation claimed on fixed assets. In appeal, the CIT (Appeals) held that the ad hoc disallowance of Rs.20 lacs was not warranted since the assets were either put to use or were not put to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich for Assessment Year 2008-09 has confirmed that the bills were bogus, that no supplies were effected and that no payments were received from the assessee. 8. The assessment in the present case is sought to be reopened beyond a period of four years of the end of the relevant assessment year. The powers of the Assessing Officer in such a case are more restricted than when he seeks to reopen an assessment within a period of four years. When an assessment is sought to be reopened within a period of four years, the test to be applied is as to whether there is tangible material before the Assessing Officer to come to the conclusion that the income has escaped assessment. Beyond the period of for years, the law is more stringent in the sense ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the subject matter of further investigation once the assessment proceedings for Assessment Year 2004-05 are reopened. The exercise of the power to reopen the assessment, though beyond a period of four years, is therefore not in excess of jurisdiction so as to warrant the issuance of a writ of certiorari. 9. A Division Bench of this Court presided over by Hon'ble Mr. Justice S.H. Kapadia (as the learned Chief Justice of India then was) held in Dr. Amin's Pathology Laboratory v. P.N. Prasad, Joint Commissioner of Income Tax (2001) 252 ITR 673 (BOM). that the test that must be applied is whether a prudent Assessing Officer has reason to believe that income had escaped assessment. Applying that test and on the basis of the material which has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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