TMI Blog2014 (2) TMI 362X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961 treating the same as bad in law. 2. The assessee in the present case is a company which is engaged in the business of manufacturing and marketing of fast moving consumer goods. The return of income for the year under consideration was originally filed by it on 23-11-2009 declaring total income at nil under the normal provisions of the Act and book profit at Rs. 106.20 crores. In the assessment originally completed u/s 143(3) of the Act vide an order dated 29-12-2009, total income of the assessee was computed by the A.O. at nil under the normal provisions of the Act and book profit at Rs. 106.20 crores u/s 115 JB of the Act after making some additions. Thereafter, the A.O. noticed that depreciation of Rs.12,52,86,830/- claimed by the assessee on trade mark Nihar acquired was wrongly allowed in the assessment originally completed u/s 143(3) of the Act as the said trade mark was not registered in the name of the assessee. He also noticed that the claim of the assessee for depreciation amounting to Rs. 25,80,878/- on the amount paid to Hindustan Lever Limited towards non-compete fees @ 25% was wrongly allowed as the expenditure incurred on payment of non-compete fees shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lever Limited. Further, in the tax audit report the above acquisition was shown as addition to Intangible Assets and depreciation thereon was claimed in the return of income. b) During the course of assessment proceedings Assessing Officer has examined the issue of allowability of depreciation on the Nihar trademark (Nihar IPR). c) Vide letter 18.12.2009, assessee submitted a detailed note on why depreciation on trademark Nihar acquired by it should be allowed. In support of user of the intangible, the appellant submitted specimen copied of sales invoice of the product sold under IPR Nihar in A.Y.2006-07. It was also pointed out during the course of assessment that the trademark acquired by the assessee was unregistered . d) The Assessing Officer after due consideration of appellant s submission and after due application of mind has allowed the depreciation of Rs.12,52,86,830/- e) The only reason given by the Assessing Officer while reopening the assessment is that since trademark which is acquired by the assessee from Hindustan Lever Ltd. Is unregistered trademark, allowance of depreciation is not in order. f) The above reason could not have led the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s view is in conformity with decision of Chennai Bench of ITAT in the case of Real Image Tech Pvt. Ltd. (120 TTJ 983) and Medicorp Technologies India Ltd. -122 TTJ 394. 5. On the basis of above submission, it was contended on behalf of the assessee before the ld. CIT(A) that the original assessment u/s 143(3) of the Act was passed by the A.O. after due consideration of both the issues noted in the reasons recorded for reopening the assessment and since there was no new material coming to the possession of the A.O. which would lead to the conclusion that the income chargeable to tax had escaped assessment, the reopening was based merely on a change of opinion. Reliance was placed on behalf of the assessee on the following judgments of the Hon ble Bombay High Court to contend that the mere change of opinion in the absence of any tangible material was not sufficient to assume jurisdiction u/s 147 r.w.s. 148 of the Act: i) CIT vs. Shri Amitabh Bachchan in ITA No. 4646 of 2010 vide order dated 05-07-2012. ii) M/s Rabo India Finance Limited vs. DCIT, Circle 1(3), Mumbai Ors. In Writ Petition No. 870 of 2012 vide order dated 09-07-2012. iii) ICICI Home Finance Compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s claim for depreciation on trade mark Nihar as well as depreciation on non-compete fees. He contended that such non-application of mind by the A.O. resulted in allowing wrong claim made by the assessee and escapement of income of the assessee to that extent from assessment. He contended that such non-application of mind by the A.O. itself was a tangible material to form the reason to believe that the income of the assessee has escaped assessment and the reopening of assessment by the A.O. therefore was in accordance with law. In support of this contention, he relied on the decision of Hon ble Bombay High Court in the case of Export Credit Guarantee Corporation of India Limited vs. Addl. CIT (Writ Petition No. 502 of 2012 dtd. January 10/11, 2013. 9. The ld. Counsel for the assessee, on the other hand, strongly supported the impugned order of the ld. CIT(A) cancelling the assessment made by the A.O. u/s 143(3) r.w.s. 147 of the Act treating the same as bad in law. He submitted that both the issues raised by the A.O. in the reasons for reopening had been duly examined in the original assessment proceeding u/s 143(3) of the Act. He invited our attention to the submissions made be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowance of depreciation of Rs. 25,80,878/-. A perusal of the reasons recorded by the A.O. shows that the assessment was reopened by him on two issues relating to assessee s claim for depreciation on Trade-mark nihar and non-compete fees paid to Hindustan Lever Limited which, according to the A.O., were wrongly allowed in the original assessment. The assessee s case is that both these issues were properly examined by the A.O. during the course of original assessment proceeding u/s 143(3) of the Act and on such examination, the same were allowed by the A.O. after applying his mind. In this regard, a written submission was made on behalf of the assessee before the ld. CIT(A) to show how both these issues were examined by the A.O. during the course of assessment proceeding u/s 143(3) of the Act and the same has already been extracted by us hereinabove from the impugned order of the ld. CIT(A). The ld. Counsel for the assessee has also placed on record before us a copy of letter dated 18-12-2009 filed with the A.O. during the course of assessment proceeding u/s 143(3) of the Act and a perusal of the same shows that a detailed note was filed by the assessee justifying its claim for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issues was wrongly allowed in the original assessment resulting in escapement of income from the assessment. In this regard, it is observed from the perusal of the reasons recorded by the A.O. that there was no such tangible material coming to his possession that has been referred to or relied upon by him to form a belief about the escapement of income and even the ld. D.R. has not been able to dispute this position which is clearly evident from the reasons recorded by the A.O. It is thus clear that the assessment completed originally u/s 143(3) of the Act was reopened by the A.O. on the basis of same set of facts and same material which was available at the time of completing the assessment originally u/s 143(3) of the Act and the reopening thus was clearly based on a mere change of opinion which is not permissible in law as rightly held by the ld. CIT(A) relying on the three decision of the Hon ble Bombay High Court cited on behalf of the assessee. We, therefore, find ourselves in agreement with the ld. CIT(A) that the reopening of assessment by the A.O. on the basis of a mere change of opinion was bad in law and the assessment completed in pursuance thereof is liable to be canc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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