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MUNDRA INTERNATIONAL CONTAINER TERMINAL PVT LTD Versus DEPUTY COMMISSIONER OF INCOME TAX CIRCLE - 2 (1)

2016 (1) TMI 1107 - GUJARAT HIGH COURT

Reopening of assessment - reliance on audit party report - Held that:- It emerges from the recorded portion of the noting of the Assessing Officer that she had not accepted the point of view of audit party at all. She in fact, recorded that the objections raised by the Revenue's audit party is not acceptable. However, for some strange reasons, later on proceeded to issue the notice for reopening on the ground that action is getting time barred and that remedial action is being initiated within f .....

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issuing notice for reopening was simply not permissible. We may refer to the decision of the Supreme Court in case of Indian and Eastern Newspaper Society v. Commissioner of Incometax, New Delhi reported in [1979 (8) TMI 1 - SUPREME Court ] . - Decided in favour of assessee. - SPECIAL CIVIL APPLICATION NO. 15463 of 2015 - Dated:- 11-1-2016 - MR. AKIL KURESHI AND MR. MOHINDER PAL, JJ MR B S SOPARKAR, ADVOCATE for the Petitioner(s) No. 1 MRS MAUNA M BHATT, ADVOCATE for the Respondent(s) No. 1 ORA .....

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Officer has issued the said notice. At the request of the petitioner, the Assessing Officer supplied the reasons recorded by her for issuing the notice which read as under : In this case, the assessee company engaged in the business of operating container handling terminal and container freight station operations, software services and related business filed its return of inocme declaring loss at ₹ 11,78,38,140/. The case was selected for scrutinyand the assessment was finalised u/s.143(3 .....

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assessee, the depreciation allowed on Infrastructure Usage Facility was not in order on the following grounds : The expenditure incurred by the assessee for usage of infrastructure facility was undoubtedly capital in nature as the assessee is deriving enduring benefits out of it. However, the right of usage of the same is not similar to knowhow, patents copyrights, trademarks, licenses, franchises or any other business or commercial rights where the asset is acquired and the payee becomes the ow .....

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Act, and hence not eligible for any depreciation. The assessee is allowed to use the infrastructure facility only, but he is not the owner of the infrastructure. Ownership is one of the conditions for admissibility of depreciation allowance. The assessee has no business or commercial right on the infrastructure facility since the assessee has no right to transfer this facility to others. Transfer can be made by owner of infrastructure only. In view of the above, I have reasons to believe that t .....

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s to the notice for reopening which were dismissed by the Assessing Officer, hence this petition. 4. Learned counsel Shri Soparkar for the petitioner raised the following contentions : 1) That the Assessing Officer was compelled to issue the notice at the instance of Revenue audit party though she herself was not convinced about the fact that income chargeable to tax had escaped assessment. 2) For the assessment year 2007-2008, this very issue of depreciation on the right to use knowhow came up .....

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ted, her premise that the expenditure is capital in nature would stand falsified. In other words, if the depreciation is to be denied, he petitioner would be eligible for entire deduction as the expenditure being in the nature of revenue expenditure. 5. Learned counsel Ms. Bhatt for the Revenue opposed the petition. She had made available the original file of assessment to enable us to decide the petitioner's first contention regarding the audit objection. 6. In this respect, we have noticed .....

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tion, action u/s. 147 has been initiated and accordingly in AY 200708 notice u/s.148 has been issued on 23.01.2014. The assessee has challenged the impugned notice issued u/s 148 dated 23.01.2014 for reopening the assessment before the honourable High Court of Gujarat. The Honourable High Court of Gujarat vide order dated 11/12/2014 has quashed the notice u/s. 148 for A.Y. 2007-08 and review petition has been filed. The objection raised by the Revenue Audit Party for the A.Y. 20010-11 is also no .....

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