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TMI Blog2012 (12) TMI 561X X X X Extracts X X X X X X X X Extracts X X X X ..... ch reopening. 2. Short facts apropos are that assessee had filed its return for impugned Assessment Year on 31.03.2002 declaring an income of Rs.10,95,450/- and agricultural income of Rs.12,500. During the course of such assessment proceedings, assessee was required to furnish various details. Thereafter, the Assessing Officer completed the assessment on 31.03.2004 under section 143(3) of the Act making an addition of Rs.3,10,481/- to the returned income in such assessment order. Additions discussed are on interest that is to be considered in assessee's hands arising out of gifts given to his wife, income from certain property claimed by the assessee to be self-occupied and disallowance relating to expenses claimed without proper bills and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oss on sale of assets of Rs.26,34,555/- preferred by the assessee as arising out of transfer of the assets, could not be allowed. Thus, reassessment was completed making an addition of a like amount. 4. In its appeal, assessee questioned the reopening, which was initiated after expiry of four years from the impugned Assessment Year. According to assessee, original assessment proceedings were completed by Assessing Officer after considering the return of income and computation statement attached to such return which gave all details of assets disposed of, and loss arising therefrom. According to assessee, there was no failure on his part to disclose fully and truly any information. However, CIT(A) was not impressed. According to him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h details of its various claims and vide its letter dt.08.01.04 placed at pages 6 to 9 of paper book Volume -I, all the required information were furnished, which inter alia included details of the assets added and deleted during the relevant previous year. In any case, according to him, assessee had sought reasons for reopening vide its letter dt.09.08.07 placed at paper book Volume I, page-11 and Assessing Officer despite stating that reasons would be intimated vide his letter dt.28.04.08, placed at paper book Volume I page-12, had failed to do so. Therefore, according to him, the assessment not only was based on a mere change of opinion, that too after four years from the end of the impugned Assessment Year, but reasons for reopening nev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .25 Block C Furniture and Fittings 11,37,431 15,785 6,45,000 -- -- -- 11,37,431 15,785 6,45,000 Block D Vehicles Motor vehicles Marulti PY 01 1411 37,04,783 -- -- -- -- -- Maruti TN 09 Z9099 3,48,000 Zen TN 01 A3625 2,16,749 Imported cars 89,00,000 132,57,532 116,96,812 Block E Computers 3,27,204 2,05,448 2,05,000 - - - Total A+B+C+D+E 155,30,716 2,57,901 129,26,480 78,650 9,562.25 69,087.75 Ld. A.R. had also given us how the loss claimed on sale of assets was computed and this appears as under:- WDV of As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eless, there is a piquant situation arising here. In original assessment proceedings, the A.O. had applied a wrong provision of law. Assets disposed off were all business assets on which depreciation were claimed by the assessee. Assessee had worked out its depreciation for the impugned assessment year also under Sec.32(1) of the Act, which clearly gives the methodology, where assets are to be divided under various blocks. However under the column 'deletion' in the depreciation schedule, though it showed Rs.1,29,26,480/-, resulting loss was claimed as a Revenue outgo. Assessee also did not compute its short term gains or short term loss considering the provisions of Sec.50 of the Act, which applied for computation of gains in case of deprec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on'ble jurisdictional High Court in the case of K.S.Suresh Vs. DCIT in [2005] 279 ITR 61 also has held that reassessment can be made only after considering the objections filed by the assessee challenging the validity of notice; So this shows that there is fundamental requirement of providing the assessee with reasons for reopening and disposing of its objections to such reopening. This procedure has not been adhered to by the Assessing Officer in the case before us. Nevertheless, in our opinion, this, by itself, will not render whole proceedings unlawful and illegal. Hon'ble Apex Court laid down the procedure, that was mandatory to be followed when a notice under section 148 was issued. If the said procedure is not followed, orders of low ..... X X X X Extracts X X X X X X X X Extracts X X X X
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