TMI Blog2014 (3) TMI 1080X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 154 at para 2.1 as observed as follows : “Since the claim of the assessee-company was in order as verified from the records an order u/s 154 of the Act was passed on 09.11.2009 wherein the income was determined at NIL after setting-off brought forward losses.” It appears, that the Assessing Officer has not examined the legal aspect of this issue. As no express opinion has been stated on this issue and we hold that the Assessing Officer has not formed an opinion in the original order passed u/s 143(3). When the Assessing Officer has not formed an opinion during the course of original assessment proceedings, reopening cannot be said to be a change of opinion. the Hon’ble Gujarat High Court has considered an identical issue in the case of General Motors India Pvt. Ltd. v. DCIT (2012 (8) TMI 714 - GUJARAT HIGH COURT) and adjudicated the matter in assessee favour stating any unabsorbed depreciation available to an assessee on 1st day of April 2002 (A.Y. 2002-03) will be dealt with in accordance with the provisions of section 32(2) as amended by Finance Act, 2001, thus once the Circular No.14 of 2001 clarified that the restriction of 8 years for carry forward and set off of unabsor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st income for A.Y.2007-08. The details of brought forward unabsorbed depreciation was follows:- Assessment Years Total in Rupees 1997-98 1,60,09,245 1998-99 1,33,70,497 1999-2000 12,32,953 2000-2001 69,40,858 2002-2003 63,90,858 2005-2006 4,43,775 Total 4,43,88,186 4. In the assessment, the A.O. did not allow set off of the carry forward unabsorbed depreciation relating to AY 1997-98 and 1998-99 for the reason that it could have been carried forward only for 8 years i.e., upto assessment year 2005-06 and 2006-07 respectively and was not eligible to be carried forward and set off against the income for AY 2007-08, in view of the legislative provision contained in sec.32(2) of IT.Act., amended by the Finance Act, 1996, according to which the unabsorbed depreciation could be carried forward upto a maximum period of 8 years from the ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng in his order as to how the decision of Hon ble Income Tax Appellate Tribunal is applicable in the facts of the Appellant s case in precedence over the decision of the Hon ble High Court of Gujarat. Hence order passed by the learned Commissioner of Income Tax (Appeals) Visakhapatnam, is ab initio void and deserves cancellation. 4. The Commissioner of Income Tax (Appeals) Visakhapatnam, is also not justified in following the decision of the Hon ble Income Tax Appellate Tribunal, Hyderabad, when there is a decision of a Higher Forum i.e., the decision of the Hon ble Gujarat High Court, which is applicable on all fours in the facts and should therefore prevail over the order of the Hon ble Income Tax Appellate Tribunal. Hence, the decision of the learned CIT(Appeals) Visakhapatnam is not in accordance with Law. The appellant, therefore, prays that the appellant company should be given the benefit of set off of unabsorbed depreciation of the Asst. Year 1997-98 and 1998-99. Hence, the appellant prays the Hon ble Bench to kindly grant relief accordingly. 5. For these and other grounds that may be urged at the time of hearing, the appellant company prays the Hon ble Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 154 and pointed out that an error that occurred while filing the return electronically on the issue of carried forward losses, was rectified and it is not a case where a conscious decision was taken keeping in view of the decision of the Special Bench of the Tribunal in the case of DCIT v. M/s.Times Guaranty Limited (supra). Thus, he submitted that there is no change in the opinion as tried to be canvassed by the learned Counsel for the assessee. On the issue of carried forward unabsorbed depreciation, he submitted that the Hyderabad Bench of the Tribunal has considered all the decisions in the case of M/s.Dharti Dredging Infrastructure Ltd. (supra). He submitted that the learned CIT(A) by following his decision has committed an error. He further pointed out that the Tribunal had considered the judgments of the Madras High Court in the case of CIT v. Pioneer Asia Packing (P) Ltd. [(2009) 310 ITR 198 (Mad.)] and the decision in the case of CIT v. S S Power Switchgear Ltd. [(2009) 318 ITR 187 (Mad.)] and has come to a conclusion. He submitted that the order of the learned CIT(A) be upheld. 7. Joining the issue, the learned Counsel for the assessee submitted that the decisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nion during the course of original assessment proceedings, reopening cannot be said to be a change of opinion. 8.3 The second issue that was argued on the issue of reopening was absence of tangible material. It is well settled that in the absence of tangible material, reopening cannot be done. In this case based on the very same records and material the Assessing Officer reopened the case. This fact is not in dispute. 8.4 In the case of General Motors India Pvt. Ltd. (supra), on the issue of reopening, it was held as follows:- Held : From the facts it is clear that there was no omission or failure on the part ;of the assessee to make a return under s.139. The assessee had disclosed fully and truly all material facts necessary for his assessment for the year. Nor subsequently, the AO had any tangible material on record, on the basis of which he could have formed his opinion or could have reason to believe that income chargeable to tax had escaped assessment. The AO has the power to reopen the assessment proceedings if some tangible material had come to his knowledge. However, he cannot reopen the assessment merely because on the same documents considered earlier by him, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in such a situation, the original assessment order cannot be reopened as it would amount to change of opinion by the AO and the reassessment order is liable to be set aside. CIT vs. Kelvinator of India Ltd. (2010) 228 CTR (SC) 448 : (2010) 34 DTR (SC) 49 : (2010) 320 ITR 561 (SC) and Gujarat Power Corporation Ltd. vs. Asstt. CIT (2012) 77 DTR (Guj) 89 relied on. Conclusion : AO has the power to reopen the assessment proceedings if some tangible material had come to his knowledge but he cannot reopen the assessment merely because on the same documents considered earlier by him, another inference was possible; AO cannot take benefit of his own wrong and reopen the assessment proceedings under s. 147; it would be a case of second thought on the same material and the omission to draw the correct legal presumption during the original assessment proceedings did not warrant initiation of proceedings under s. 147. 8.5 Hence we uphold the contention of the assessee on the issue of reopening on the ground that the same was made without any tangible material. This ground is allowed. 8.6 Coming to the carry forward and set off of unabsorbed depreciation relating to assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance Act, 2001 and was available for carry forward and set off against the profits and gains of subsequent years, without any limit whatsoever. Conclusion : Amendment of s. 32(2) by Finance Act, 2001 is applicable from asst. yr. 2002-03 and subsequent years and therefore unabsorbed depreciation from asst. yr.1997-98 upto the asst. yr. 2001-02 got carried forward to the asst. yr. 2002-03 and became part thereof, it came to be governed by the provisions of s. 32(2) as amended by Finance Act, 2001 and was available for carry forward and set off against the profits and gains of subsequent years, without any limit whatsoever. 8.7 The reliance was placed by the learned Departmental Representative on the decision of the Hyderabad `A Bench of the Tribunal in the case of M/s.Dharti Dredging Infrastructure Ltd. (supra). In this decision, the Bench referred the judgments of the Madras High Court in the case of Pioneer Asia Packing (P) Ltd. and in the case of S S Power Switchgear Ltd. (supra). 8.8 We have gone through these decisions. In both these decisions the issue that was considered, was different from the issue under consideration before us. In the case of S S Power S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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