TMI Blog1997 (12) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... invalid ?" 2. The assessee filed its return for the asst. yr. 1976-77 and claimed extra depreciation in respect of certain plant and machinery which were leased out to Spencer Co., which is running a hotel, approved by the Central Government. The assessee claimed extra depreciation allowance at 50 per cent of the normal depreciation under item No. III, Part I of Appendix I to the IT Rules, 1962. The ITO in the original assessment for the year 1976-77 granted the extra depreciation as claimed by the assessee. Subsequent to the completion of the original assessment, the audit party had drawn to the attention of the ITO that the initial depreciation was wrongly allowed as the assessee has only leased out the assets belonging to it and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal before the Tribunal and the Tribunal held that the audit party has interpreted the law and since there was an expression of an opinion of the law by the audit party, the opinion expressed by the audit party would not constitute "information" within the meaning of s. 147(b) of the IT Act, and placing reliance on the decision of the Supreme Court in the case of Indian and Eastern Newspaper Society vs. CIT (1979) 12 CTR (SC) 190 : (1979) 119 ITR 996 (SC) : TC 51R. 1371, the Tribunal held that the report of the audit party cannot form the basis for reopening the assessment and in this view of the matter, the Tribunal allowed the appeal preferred by the assessee. 5. Mr. C.V. Rajan, learned counsel for the Revenue, submitted that the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion allowance for approved hotels and the provision reads as under : "An extra allowance of depreciation of an amount equal to one-half of the normal allowance shall be allowed in the case of machinery and plant installed by an assessee, being an Indian company, in premises used by it as a hotel where such hotel is for the time being approved by the Central Government for the purposes of s. 33 of the Act. Explanation.---For the purposes of this sub-item and sub-item (iv), 'normal allowance' means the amount of depreciation allowance (other than the extra depreciation allowance under this sub-item or the extra shift depreciation allowance under sub-item (iv) which is allowable under r. 5." 8. The extra allowance of depreciation of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the attention of the ITO the relevant provision of law. Since the audit party has not interpreted the law but has merely brought to the attention of the ITO the provisions of law, the report of the audit party in our opinion, constitutes "information" within the meaning of s. 147(b) of the Act. The Supreme Court in Indian and Eastern Newspaper Society vs. CIT, has made a distinction between the interpretation of the law and bringing to the attention of the ITO the relevant provision of law and if the audit party interpreted the law, then the report by the audit party cannot be regarded as "information" for the purpose of reopening an assessment under s. 147(b) of the Act. However, if the audit party has merely drawn the attention of the ITO ..... X X X X Extracts X X X X X X X X Extracts X X X X
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