TMI Blog2015 (8) TMI 1350X X X X Extracts X X X X X X X X Extracts X X X X ..... re not separable. Therefore, depreciation on these structures/fittings have to be applied at the same rate, as is available to the principle asset i.e. windmill. For this proposition, he relied on the decision of Hon’ble Bombay High Court in the case of CIT vs. Cooper Foundary Pvt. Ltd. [2011 (6) TMI 837 - BOMBAY HIGH COURT ]. It was held by the Hon’ble High Court in that case that findings recorded by the Tribunal that RCC foundation forms integral part of the windmill is a finding of fact and no question of law arises from the same. Thus, on merits as well the assessee has prima facie case in its favour. Since the appeal of the Revenue is dismissed on the issue of jurisdiction assumed by the Assessing Officer under section 147, the issue on merit has become academic. - ITA No.2065/PN/2013 - - - Dated:- 12-8-2015 - SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM Department by : Shri S. K. Rastogi, CIT Appellant by : Shri Nikhil Pathak ORDER PER VIKAS AWASTHY, JM : This appeal filed by the Revenue is directed against the order of CIT(A)-III, Pune dated 17.09.2013 relating to assessment year 2007-08. 2. The grounds raised by the Revenue in appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aimed accelerated depreciation of 80% on the above referred windmills. The higher rate of depreciation was also claimed on incidental civil construction work and electrical fittings connected to the windmills. After the completion of the assessment under section 143(3) of the Act, the Assessing Officer found error in the allowability of the depreciation claimed. He frowned upon the allowability of depreciation at a higher rate of 80% on civil construction work and electrical installations. The Assessing Officer, therefore, issued notice under section 154/155 of the Act dated 09.12.2011 directing the assessee to show-cause for the correction of the purported mistake which is apparent from the record and sought to disallow the excess depreciation allowed in the assessment on civil construction work and electrical work aggregating to ₹ 6,47,71,477/-. In response thereto, the assessee filed reply dated Nil. The same is placed at page No.46 47 of the Paper Book. The proceedings under section 154 of the Act were dropped. Thereafter, the Assessing Officer proceeded to issue notice under section 148 of the Act dated 30.03.2012. 5. The reasons recorded by the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77/ - as above which has escaped assessment. In view of the above, I have reason to believe that income chargeable to tax to the extent of ₹ 6,47,71,477/ - has escaped assessment within the meaning of clause (a) under Explanation (2) to section 147 of the Act. Issue notice under section 148 of the I.T. Act, 1961. 6. After issuance of notice under section 148 of the Act and providing the reasons for doing so as noted above, the assessment order dated 12.09.2012 was framed under section 143(3) r.w.s. 148 of the Act disallowing the alleged excess depreciation claim of ₹ 6,47,71,477/- on civil construction work and electrical work etc.. 7. In appeal, the CIT(A) held reopening under section 147/148 and consequential assessment thereunder legally unsustainable. The CIT(A) found that the action of the Assessing Officer is on the basis of change of opinion which is not permissible for usurping jurisdiction under section 147 of the Act. The CIT(A) further observed that the entire facts concerning the claim of impugned depreciation was placed before the Assessing Officer in filing form of Audited Annual Accounts, Tax Audit Report, Invoices and other details. After exa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 47 [which places fetters on the Assessing Officer to reopen an assessment already completed u/s 143(3) or 147, unless income has escaped assessment by reason of the failure on the part of the assessee to make a return u/s 139 or in response to notice issued under sec. 142(1) or 148 or to disclosed fully and truly all material facts necessary for assessment for that assessment year] does not apply. 3.3. However, it is seen that the reassessment amounts to 'change of opinion' since it is only after application of mind and review of the audited annual account, tax audit report, invoices and other details filed vide letter dated 18.11.2009 (referred to in para 3 supra) that the Assessing Officer allowed depreciation @80% on the cost of 11 windmills and @40% on one windmill in the original assessment order, since the Assessing Officer had recorded at para 4 of the impugned order that the appellant company has installed 12 windmills of 1250 KW at Dist. Dhule during the year under assessment. The appellant has relied upon the Delhi High Court decision in the case of CIT v Kelvinator of India reported in 256 ITR 1 (FB), which was subsequently affirmed by the Hon'ble Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned Assessing Officer issued notice u/s 148 on 30.03.2012. The appellant has claimed that the jurisdictional Bombay High Court in the case of ICICI Home Finance Co. Ltd. vs. ACIT in Writ Petition No. 430 of 2012 has held that the power to reopen a completed assessment has been bestowed on the Assessing Officer, based on his reasonable belief that income chargeable to tax has escaped assessment and it cannot be an opinion and/or belief of some other authority. The Bombay High Court held that the Assessing Officer cannot blindly follow the opinion of an audit authority for the purposes of arriving at a belief that income has escaped assessment. The Bombay High Court also followed the Supreme Court decision in the case of Kelvinator India Ltd. to hold that even though the power of reopening before the expiry of 04 years from end of the relevant assessment years, is very wide, even then such a power would not justify a review of the assessment order already passed. 3.5. Following the decisions cited supra. It is therefore, held that the reopening of the completed assessment amounts to 'change of opinion' which is not permissible in law. Ground nos. 1 and 2 are allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded that the order of the CIT(A) is passed on legally sound basis and no interference is called for. To support his case that the reopening is not permissible on the basis of mere change of opinion and for the purposes of review of his own order, he relied on the decision of the Hon ble Delhi High Court in the case of Kelvinator of India (supra) as approved by the Hon ble Apex Court. He further relied on a recent decision of the Hon ble Bombay High Court in the case of CIT vs. M/s. Jet Speed Audio Pvt. Ltd. in Income Tax Appeal No.285 of 2013 decided on 28th January, 2015 to reaffirm the proposition that in the absence of any tangible material, reopening is not permissible on a mere change of opinion. 10. We have heard the submissions of rival sides and perused the orders of authorities below. We have considered legal objection on applicability of section 147 of the Act in the facts of the case dispassionately. It is seen from the original assessment order under section 143(3) of the Act that the Assessing Officer has taken due note of the fact that the assessee has installed 12 windmills. It is also evident from the material placed before us that the relevant invoices and detai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. We are also guided by decision of the Hon ble Jurisdictional High Court in the case of (i) NDT Systems vs. ITO reported in (2013) 255 CTR 113 (Bom.); (ii) Ms. Parveen P. Bharucha vs. DCIT reported in (2013) 348 ITR 325 (Bom.); and, (iii) Siemens Information Systems Ltd. vs. ACIT reported in 214 CTR 16 (Bom.) for the proposition that fresh application of mind on the same set of facts amounts to change of opinion and reopening is not warranted on change of opinion. In the present case, the relevant facts and material concerning the depreciation on windmills etc. was admittedly placed before the Assessing Officer in the original assessment proceedings and the Assessing Officer after due indulgence passed the assessment order. The only reason for reopening is audit objection received by the Assessing Officer which led to issuance of notice under section 154 initially, followed by notice under section 148 of the Act. The Hon ble Bombay High Court in the case of M/s Jet Speed Audio Pvt. Ltd. (supra) affirming the order of the Tribunal held that re-assessment without mention of any tangible material in the reasons recorded is unjustified. 12. The Ld. Departmental Representative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer is merely seeking review of his original assessment order on some set of facts, which is not permissible in law. 13. In the light of the aforesaid facts, we find no merit in the grounds challenging the order of the CIT(A) in quashing the reassessment proceedings. The order of CIT(A) cannot be faulted in law. Thus, the ground No.2 in the Revenue s appeal relating to legality of reassessment proceedings is dismissed. 14. On merits, the Ld. Authorized Representative for the assessee contended that the civil construction work and electrical installation is vital and integral part of the windmills and cannot be isolated. The civil construction and electrical work are specifically designed for operation of the windmills and are not separable. Therefore, depreciation on these structures/fittings have to be applied at the same rate, as is available to the principle asset i.e. windmill. For this proposition, he relied on the decision of Hon ble Bombay High Court in the case of CIT vs. Cooper Foundary Pvt. Ltd. in Income Tax Appeal No.1326 of 2010 decided on 14th June, 2011. It was held by the Hon ble High Court in that case that findings recorded by the Tribunal th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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