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2015 (9) TMI 649 - ITAT AHMEDABAD

2015 (9) TMI 649 - ITAT AHMEDABAD - TMI - Reopening of assessment - CIT(A) restricting depreciation rate @15% instead of 20% on dumper vehicle thereby resulting in the impugned disallowance on merits - Held that:- Revenue strongly supports the impugned reopening action. However, it fails to rebut the factual position that the Assessing Officer has not decided assessee’s stated objection. We are of the view in this backdrop of facts that such a course of action is mandatory on an Assessing Office .....

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dara, JJ. For The Appellant : Shri P. B. Parmar, A.R. For The Respondent : Shri Vilas Shinde, Sr. D.R. ORDER PER S.S. GODARA, JUDICIAL MEMBER This assessee s appeal for assessment year A.Y. 2006-07 arises from order dated 21-03-2011 passed by the CIT(A)-XX, Ahmedabad in Appeal No. CIT(A)-XX/482/10-11, in proceedings under section 143(3) r.w.s. 147 of the Income Tax Act, 1961, in short the Act. 2. The assessee s pleading raise two folded grounds. The first one challenges the CIT(A) s action in up .....

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first for adjudication. 4. The assessee firm undertakes civil contracts. It filed its return of income on 31.12.2006 acknowledging nil income. The Assessing Officer completed a regular assessment on 26.12.2008 adding disallowance of depreciation to the tune of ₹ 50,300/- and reduced the broad forward losses and unabsorbed depreciation resulting in net taxable income. Thereafter, he issued reopening notice under section 148 dated 31.12.2009 forming reasons to believe that assessee s income .....

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s observed from assessment records of the assessee that the assessee had claimed depreciation on 'Dumpers' @20% during the previous year. The written down value of dumpers was ₹ 29630228/- as on 1/04/2005. As the business of the assessee during the previous year was 'Civil contract'. The assets Dumper' would fall under Plant and Machinery for which allowable rate of depreciation for A.Y. 2006-07 was 15%. The scrutiny assessment was completed 26/12/2008 without considera .....

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ing it as a change of opinion as under: We are in receipt of the reasons recorded for reopening of the assessment for assessment year 2006-07 under the cover of your letter under reference. On going through the contents of the recorded reasons for reopening of the assessment u/s. 147 of the Act, it transpires that the Assessing Officer has observed that "the business of the assessee during the previous year was civil contract' hence the assets 'Dumper' would fall under Plant and .....

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e and as such we are entitled to claim depreciation @30% as against which we have claimed depreciation @20% which is below the rate of admissible rate. Apart from the facts mentioned in the preceding paragraphs, we file our preliminary objections against the reopening of assessment for assessment year 2006-07 which is mentioned and discussed in the ensuing paragraphs. In this regard, it is to be stated that the assessment for the assessment year 2006-07 has been completed u/s. 143[3] of the Act .....

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oceedings and he was satisfied himself that there was no point to draw any adverse inference on the point of rate of depreciation claimed on dumpers. Hence, the Assessing Officer has, after his satisfaction, made the assessment order for assessment year 2006-07 allowing the claim of depreciation @20% made on dumpers. However, without prejudice to the facts mentioned in preceding paragraph, we would like to state the brief facts of the case that the assessee had undertaken sub-contract from M/s. .....

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sessee was long lasting and main work was to lift Pond ash and soil from far distances, the assessee purchased the vehicles at its own in U.P. for smooth and speedy work and claimed depreciation @20% in the return of income for assessment year 2006-07 keeping in view Board's Circular No.652 dated 14/06/1993 which has been followed by the Hon'ble High Court of Bombay in the case of CIT V/s. S. C. Thakur & Bros/. 221 CTR 779 where in the Hon'ble High Court has held that in view of .....

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mpers. Further, the assessee has shown the receipts from contractor viz. M/s. KMC Construction Limited for the work done was inclusive of transportation charges. Hence the facts and circumstances of the case cited supra are identical and squarely applicable to the facts and circumstances of the case of the appellant and as such the appellant is entitled to claim depreciation @20% which is less than the allowable rate of depreciation on dumpers. We would like to draw your kind attention to the fo .....

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Supreme Court in the case of GKN Drive Shafts (India) Ltd. vs. ITO reported at 179 CTR 11. 4. We find from the case record that the Assessing Officer did not decide the above stated objections and framed reassessment in order dated 13.12.2010 restricting depreciation claim on dumper vehicle in question from 20% to 15% only thereby resulting in consequential disallowance/addition @ 5% on WDV thereof amounting to ₹ 14,81,512/-. 5. The assessee preferred appeal inter alia challenging validity .....

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