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TMI Blog2015 (10) TMI 1710X X X X Extracts X X X X X X X X Extracts X X X X ..... hether the Ld. CIT(A) erred in law and on facts of the case in allowing the depreciation on Networking Project @80% against @25% allowed by the AO. 2. Whether Ld. CIT(A) erred in law and on facts of the case in holding that the expenditure incurred by the assesee on Total Productivity Maintenance Programmed and ISO 9001 certification is revenue expenditure. 3. The appellant craves to amend, modify, alter, add or forego any ground of appeal at any time before or during the hearing of this appeal. 3. The assessee has raised the following grounds in its Cross Objection:- 1. That the ClT(A) had grossly erred in low and on the facts and in the circumstances of the Appellate case in confirming the action of the A.O. in re-opening the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. 4.1 The assessee company is engaged in the business of manufacturing various automobile components like piston, piston rings, engine values etc. at its factory located at Ghaziabd. The reasons recorded for reopening the case is reproduced hereunder:- "The assessment was completed u/s 143(3) on 23.01.2006 at a total income of Rs. 27,42,30,520/-. Subsequently it has come to the notice that the assessee has the following expenses: 1) The assessee has claimed Rs. 92,26,993/- on account of scientific research and development as revenue in nature. This expense being of capital nature, the assessee ought to have treated it as capital expenditure. 2) The depreciation at the rate of 80% is claimed on Networking Project Expenses amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reiterated the contention raised in the Cross Objection that Ld. CIT(A) has wrongly upholding the action of the AO regarding reopening of assessment u/s. 147/148 of the Income Tax Act, 1961. In support of its contention, the assessee filed the Synopsis which read as under:- "1. The assessee has filed Cross Objection against the order of the CIT(A) upholding the action of the AO regarding reopening of assessment u/s. 147/148 of the Income Tax Act, 1961. 2. It was submitted before the CIT(A) that reopening had been done merely on change of opinion in as much as that in the original assessment made u/s. 143(3) of the Income Tax Act, the AO had apparently applied his mind and had raised queries with regard to the items which have been identi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The facts of that judgement are distinguishable from facts of assessee in appeal. 6. Therefore the cross objections raised by the assessee needs to be allowed and it is prayed that it may be held that the reopening of the case which was originally assessed under scrutiny Vis 143(3) is nothing but a change of opinion on the same set of facts and the issues have been examined in the original assessment. 7. Therefore reopening of assessment beyond 4 years was illegal in view of the following judgements: - Kelvinator of India vs. CIT 256 ITR 1 (Delhi Full Bench) duly approved by the Hon'ble Supreme Court as reported in 320 ITR 561. - Usha International Ltd. (Delhi High Court Full Bench) as reported in 348 ITR 485." 9. We have heard both the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reopening of assessment beyond 4 years was also illegal. We also find considerable cogency in the contention raised by assessee's counsel that the judgment of the Hon'ble Supreme Court in the case of Rajesh Jhaveri Stock Brokers (P) Ltd. 291 ITR 500 (SC) which the AO as well as Ld. CIT(A) has relied upon is distinguishable to the facts of the present case, as it was in different context of reopening when original assessment was not u/s. 143(3) of the I.T. Act. 9.2 In view of the aforesaid facts and circumstances, as explained above, we are of the view that both the authorities below have gone wrong in deciding the reopening as valid. However, in view of the aforesaid discussions and the precedents relied upon, as aforesaid it is establis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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