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TMI Blog2009 (9) TMI 1055X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s.153A of the I.T. Act, 1961. 2. On the facts and circumstances of the case and in law, the CIT(A) has erred in deleting the disallowance made by the AO amounting to ₹ 19,61,690/-, on account of claim of depreciation. 3. On the facts and in the circumstances of the case and in law, the CIT(A) ought to have upheld the order of the A.O. 4. It is, therefore, prayed that the order of the CIT(A) be set aside and that of the A. O. be restored to the above extent. 3. However, the figure of depreciation mentioned in ground No.2 varies in different assessment years, which are as under:- Sl. No(s) Assessment Year(s) Amount (Rs.) of depreciation involved 1. 2001-02 19,61,690 2. 2002-03 71,70,982 3. 2003-04 11,84,363 4. 2004-05 12,43,485 5. 2005-06 10,34,573 6. 2006-07 7,14,037 7. 2007-08 7,14,037 4. First, we take up the Revenue's appeal in ITA No.2112/Ahd/2009 for Assessment Year 2001-02. 5. The brief facts of the case are that a search was carried out u/s.132 of the I.T. Act, 1961 at the business as well as residential premises of the Khemani Group at Daman on 23/01/2007. This included M/s.Khemani Distilleries Pvt.Ltd. against whom proceedings u/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D" which vide its order dated 16/01/2009 (in ITA No.3385/Ahd/2004) passed for Assessment Year 2001-02 held that for working out WDV, only the actual depreciation allowed should be reduced. If the depreciation is not claimed, then it cannot be reduced to work out the WDV and then allow the depreciation thereon. In this regard, we refer to paragraph Nos.10 & 11 of the said order of the Tribunal as under:- "10. We have heard the rival submissions and perused the orders of the lower authorities and the material available on record. In the instant case, it is not in dispute that the assessee neither has claimed nor was allowed depreciation in respect of fixed assets used in its industrial unit. During the year under consideration, for allowing depreciation the assessing officer deducted the value of the depreciation which ought to have been claimed by the assessee in earlier years and which ought to have been allowed to the assessee by the Department in the earlier years. Thus, the dispute before us raised on determining of the written down value of the year under consideration with reference to which depreciation u/s 32 of the Act is to be calculated. We find that the written down val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, so, however, that the amount of such decrease does not exceed the written down value;] (ii) in respect of any previous year relevant to the assessment year commencing on or after the 1st day of April, 1989, the written down value of that block of assets in the immediately preceding previous year as reduced by the depreciation actually allowed in respect of that block of assets in relation to the said preceding previous year and as further adjusted by the increase or the reduction referred to in item (i).] Explanation 1.- When in a case of succession in business or profession, an assessment is made on the successor under subsection (2) of section 170 the written down value of any asset or any block of assets] shall be the amount which would have been taken as its written down value if the assessment had been made directly on the person succeeded to. Explanation 2.- Where in any previous year, any block of assets is transferred,- (a) by a holding company to its subsidiary company or by a subsidiary company to its holding company and the conditions of clause (iv) or, as the case may be, of clause (v) of section 47 are satisfied; or (b) by the amalgamating company to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tual cost of the asset to the assessee as reduced by the amount of the depreciation actually allowed to the assessee. Now in the instant case, it is not in dispute that in the earlier years, no depreciation was allowed to the assessee in respect of the fixed assets in question. The Revenue could not bring on record any material before us to show that though the depreciation was not claimed by the assessee but in fact such depreciation was allowed by the Department as deduction to the assessee in the assessment made in respect of the income of the assessee. In our considered opinion, it is not open to the Revenue to deduct any amount from the cost of the asset to determine the WDV on the ground that such amount should have been claimed by the assessee as depreciation in earlier year. In our considered view, WDV can be ascertained only by reducing the actual depreciation allowed to the assessee in an assessment and not the amount which ought to have been allowed to the assessee. It is the actual depreciation allowed to the assessee which only can be reduced for ascertaining the WDV and not the amount which is notionally allowed to the assessee. Thus, in the absence of any material br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AT and the facts being same, on merit also, the additions should be deleted as all the issues are covered in its favour by the appellate authorities i.e. the CIT(A) & the ITAT. 5. I have considered the facts and the submissions. I agree with the appellant's view. On merits of the additions, it is observed that the additions have been deleted in the original assessment proceedings and all the issues are covered in the appellant's favour. As the facts are same and no contrary evidences have been found during the search, all the .additions are liable to be deleted. However, considering the additional grounds taken by the appellant, it is observed that all the additions were subject matter of original assessment proceedings which were subject matter of appellate proceedings before the CIT(A) and the ITAT, the same cannot be re-agitated by the Assessing Officer in an action u/s.153A of the I.T.Act as held by the Hon'ble ITAT in the cases of Meghmani Industries Ltd. and Meghmani Organics Ltd. (supra). Following the ratio of decisions of Hon'ble ITAT, the assessment made u/s.153A of the Act is cancelled." 7. The Department has now challenged the findings of the Learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wers to initiate re-assessment proceedings us/.153A of the I.T. Act, 1961 are in addition to powers of the Assessing Officer to initiate the proceedings us/.148(1) of the I.T. Act, 1961. 11. The purpose of not abating the concluded assessment is that where a particular issue has attained finality in the original assessment proceedings, then that issue cannot be agitated in the proceedings us/.153A of the I.T. Act, 1961 unless there is fresh material available with the Assessing Officer either as a result of search or investigation carried out thereafter. Since assessment is reopened u/s.153A of the I.T. Act, 1961, the Assessing Officer has all the powers to carry investigation, but if no investigation is carried out and no fresh material is collected, then the finality of the issue cannot be disturbed. At the time when the Assessing Officer had passed the order u/s.153A of the I.T. Act, 1961 on 26/12/2008, the order of the Tribunal in original for Assessment Year 2002-03 passed on 28/11/2008 was available, wherein also similar view was held. This was subsequently followed by the Tribunal in the Assessment Year 2001-02 for which the order was pronounced on 16/01/2009. Thus, on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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