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2016 (6) TMI 703 - GUJARAT HIGH COURT

2016 (6) TMI 703 - GUJARAT HIGH COURT - TMI - Reopening of assessment - report of audit party relied upon - Held that:- Identical circumstances, in case of this very assessee for the assessment year 2010-2011 wherein held that the recorded portion of the noting of the Assessing Officer shows as not accepted the point of view of audit party at all. AO in fact, recorded that the objections raised by the Revenue's audit party is not acceptable. However, for some strange reasons, later on proceeded .....

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h might have escaped her notice, nevertheless, once she was convinced that the objection of the revenue party was not valid, her act of issuing notice for reopening was simply not permissible. - Decided in favour of assessee. - SPECIAL CIVIL APPLICATION NO. 822 of 2016 - Dated:- 14-6-2016 - MR. AKIL KURESHI AND MR. A.J. SHASTRI, JJ. FOR THE PETITIONER : MR B S SOPARKAR, ADVOCATE FOR THE RESPONDENT : MRS MAUNA M BHATT, ADVOCATE ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. The petition .....

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by an order dated 11.1.2016 in Special Civil Application No.15463/2015 making following observations : 1. The petitioner has challenged a notice for reopening the assessment previously framed after scrutiny. Brief facts are as under : 2. The petitioner is a company registered under the Companies Act. For the assessment year 2010-2011, the petitioner had filed return of income on 27.9.2010 declaring loss of 11.78 crores (rounded off). Return was taken in scrutiny. Scrutiny assessment was framed .....

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for scrutinyand the assessment was finalised u/s.143(3) rws 144C of the Act on 28.02.2014 determining the income at Rs. (-) 11,43,38,140/-. In the assessment order the assessee was allowed depreciation of ₹ 18,01,30,162/-on Infrastructure Usage Facility @ 25% on WDV of ₹ 72,05,22,447/- as on 31.03.2010 treating the same as intangible asset. On perusal of assessment records it is noticed that the assessee has been using infrastructure developed by Mundra Port and Special Economic Zon .....

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ts where the asset is acquired and the payee becomes the owner. Unlike this, in the case of leasing, the lesseee does not become the owner of the leased property. Any business or commercial right of similar nature mentioned above covers only right to use the intangible assets like technical knowhow, trade mark, pattern etc. But in this case, the deemed right received is to use a tangible asset I.e infrastructure. Thus, it is clear that the 'right to use infrastructure facility is not similar .....

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nly. In view of the above, I have reasons to believe that the depreciation allowed on the infrastructure Usage Facility was not in order. The irregular allowance of depreciation in A.Y. 2010-11 of ₹ 18,01,30,162/- has led to escapement of income on account of failure on the part of assessee to disclose fully and truly all material facts pertaining to A.Y. 2010-11. In view of the above, I am of the opinion that this is a fit case for reassessment by invoking the provisions of section 147 of .....

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ry issue of depreciation on the right to use knowhow came up for consideration, at which time, the assessment for the assessment year 2010-2011 was not yet completed which was completed without making additions. According to the counsel, therefore, the Assessing Officer even during the original assessment was convinced that no additions could be made. She had thus formed a belief which cannot now be allowed to be changed. 3) In any case, reasons are selfcontradictory. If the Assessing Officer be .....

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ding the audit objection. 6. In this respect, we have noticed a letter dated 30.3.2015 written by the Assessing Officer to the Commissioner of Income Tax in which after referring to audit objections regarding 25% depreciation on the infrastructure usage facility, she noted as under : Comments of the AO 4. The similar issue was raised in A.Y. 2007-08 & 2008-09. This office has submitted detailed replies and stated that the objection is not acceptable. However, the Revenue Audit has not consid .....

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d by the Revenue Audit Party for the A.Y. 20010-11 is also not acceptable. Since the action getting barred by the limitation by 31.03.2007, as this AY 2010-11 falls in within four years remedial action is being initiated. Therefore, in order to settle the objections, remedial action is being taken. Considering the facts of the case, the most suitable remedial action for the issues would be reopening of assessment u/s.147 of the IT Act. The approval for the same may kindly be granted. 7. Two thin .....

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