TMI Blog2011 (7) TMI 1255X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 2,77,36,266/- on intangible assets. 3. That in any case and in any view of the matter action of ld. CIT(A) in not reversing the action of ld. AO in making disallowance of ₹ 2,77,36,266/- and in framing the impugned assessment order is bad in law and against the facts and circumstances of the case, void ab initio, beyond jurisdiction and the same is not sustainable on various legal and factual grounds. 4. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other. 2. The return of income originally was filed on 31.10.2004 declaring loss of ₹ 2,14,74,490/- and the said loss was accepted by way of order dated 10.11.2006 passed u/s 143(3) of the Act. 3. Subsequently notice u/s 148 was issued on 11.06.2008 after recording the following reasons: - Assessment in this case was completed u/s 143(3) on 10/11/2006 at a loss of ₹ 2,14,74,490/-. It has now been noticed that the assessee had claimed depreciation of ₹ 2,77,36,266/- on goodwill treating it as an intangible assets. Since, goodwill is not covered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. CIT(A) the assessee is aggrieved, hence in appeal. 5. After narration of the facts, it is the main case of ld. AR that the department has not followed the principles of consistency as the AO himself has dropped the initiation of reassessment proceedings in the immediate preceding and immediate proceeding assessment years. He in this regard, refer to the order passed by AO u/s 152(2) of the I.T. Act, 1961 dated 30.12.2008 in respect of A.Y. 2003-04 copy of which is placed at page 403 of the paper book, wherein the AO has dropped the proceedings u/s 148 for A.Y. 2003-04 with the observations the proceedings u/s 148 of the Income Tax Act, 1961 are dropped herewith . 6. He submitted that copy of the reasons for reopening of assessment for A.Y. 2003-04 as recorded on 11.01.2008 are placed at page 412 of the paper book which reads as under: - 11/01/2008 Reasons for issue of notice u/s 148 in the Case of M/s Spectris Technologies (P) Ltd., Asstt. Year 2003-04 Assessment in this case was completed u/s 143(3)at a loss of ₹ 1,31,06,138/- on 31/01/2006. It has now been noticed that the assessee had claimed depreciation @ 25% on goodwill and noncompete fee amounting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proceedings by passing order u/s 152(2) of the Income Tax Act, 1961 with the similar observations as were made for A.Y. 2003-04 and copy of such order is placed at page 389 of the paper book. 10. Thus, it is the case of ld. AR that without any difference in facts and circumstances of the case department has deviated from the stand taken by it in the immediate preceding year and in the immediate proceeding year which is not permissible in law as principle of consistency has to be maintained as per decision of Hon ble Supreme Court in the case of Radhasoami Satsang Vs. CIT 193 ITR 321 (SC). 11. On merits also, it is the case of ld. AR that goodwill is an asset, hence, eligible for depreciation and according to him, this position of law has been accepted recently by the Delhi High Court in the case of CIT Vs. Hindustan Coca-Cola Beverages Pvt. Ltd. 238 CTR 1 and he has placed reliance upon para 23 24 of the said decision. 12. It is also the case of ld. AR that, in any case, these are the reassessment proceedings based on change of opinion which according to decision of Hon ble Supreme Court in the case of CIT Vs. Kelvinator of India 320 ITR 561 (SC) is not permissible. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised at the hearing was that, in the absence of any change in the circumstances, the revenue should have felt bound by the previous decisions and no attempt should have been made to reopen the question. He relied upon some authorities in support of his stand. A Full Bench of the Madras High Court considered this question in T.M.M. Sankaralinga Nadar and Bros. Vs. CIT [1929] 4 ITC 226. After dealing with the contention, the Full Bench expressed the following opinion (p. 242): The principle to be deduced from these two case is that where the question relating to assessment does not vary with the income every year but depends on the nature of the property or any other question on which the rights of the parties to be taxed are based, e.g., whether a certain property is trust property or not, it has nothing to do with the fluctuations in the income; such questions, if decided by a court on a reference made to it would be res judicata in that the same question cannot be subsequently agitated. One of the decisions referred to by the Full Bench was the case of Hoystead Vs. Commissioner of Taxation [1926] AC 155 (PC). Speaking for the Judicial Committee, Lord Shaw stated (p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income-tax in the earlier proceedings, a different and contradictory stand should have been taken. We are, therefore, of the view that these appeals should be allowed and the question should be answered in the affirmative, namely, that the Tribunal was justified in holding that the income derived by the Radhasoami Satsang was entitled to exemption under sections 11 12 of the Income-tax Act of 1961. 16. From the above observations of Hon ble Supreme Court, it is clear that though principle of res judicata are not applicable to Income Tax proceedings, and each assessment year is a unit and what is decided in one year may not apply in the following year but where a fundamental aspect pre-meeting through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the decision to be changed in a subsequent year particularly in absence of any material change justifying the revenue to take a different view of the matter and if there is no change, and it was in support of the assessee, it will not be appropriate to re-open the issue a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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