TMI Blog2015 (10) TMI 1710X X X X Extracts X X X X X X X X Extracts X X X X ..... merely a change of opinion which is not permissible under the law as well as according to the various decisions rendered by the Hon’ble Supreme Court of India in the case of CIT vs. Kelvinator of India Limited [2010 (1) TMI 11 - SUPREME COURT OF INDIA] and Usha International Ltd. [2012 (9) TMI 767 - DELHI HIGH COURT] the reassessment is invalid on the part of the AO and also on confirming the same on the part of the Ld. CIT(A). By these judgments the 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. (2007 (5) TMI 197 - SUPREME Court) which the AO as well a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter, 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 assessment U/S 147/148 of the Income Tax Act. 2. That the ClT(A) has grossly erred in low in holding that the reopening by the AO u/s 147 was justified and that the A.O. had applied his mind. 3. That the ClT(A) ought to have held that there was no failure on the port of the Appellate in furnishing the fully and truly all the material facts necessary for the computation of the Income and that proviso u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s come to the notice that the assessee has the following expenses: 1) The assessee has claimed ₹ 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 amounting to ₹ 1,23,66,127/-. The rate allowable is 25% as the assets fall in the Plant and Machinery block. Therefore an excess claim of ₹ 61,25,299/- as depreciation was claimed by the assessee. 3. The assessee has also claimed ₹ 57,57,625/- on account of TPM Expenses / ISO 9000 expenses as revenue n nature. The TPM expenditure pertains to expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 identified by the AO in his notice u/s. 147/148 of the Income Tax Act. 3. It was specifically pointed out that with regard to the expenditure on total productivity maintenance/ISO 9001, the assessee vide its letter dated 21st November, 2005 had explained the nature of these expenses in response to the query by the AO. 4. Similarly it ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 parties and perused the relevant records, especially the orders passed by the Revenue Authorities, Written Synopsis filed by the assessee. For the sake of convenience, first we would like to decide the legal issue challenging the reopening proceedings raised in the Cross Objection filed by the assessee. 9.1 We have gone t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 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 established that that in the present case the issue reopening of assessment is incorrect and invalid. Therefore, we quash the orders of the authorities below on this legal issue is decide the same in favor of the assessee and against the revenue by allowing the Cross Objection filed by the assessee. 9.3 Since we have already ..... X X X X Extracts X X X X X X X X Extracts X X X X
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