×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
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Appeal No. - ITA No.441/Ind/2019 & ITA No.503/Ind/2018
Asstt. Year - 2010-11 & 2012-13
PER : MANISH BORAD, AM.
The above captioned two appeals are filed at the instance of the assessee. Appeals No. 441/Ind/2019 & No.503/Ind/2018 for Assessment Years 2010-11 & 2012-13 are directed against the order of Ld. CIT(Appeals)-1 (in short ‘CIT(A)’), Indore dated 18.02.2019 and 20.03.2018 respectively which are arising out of the order u/s 143(3) of the Income Tax Act 1961 (In short the ‘Act’) dated 13.12.2017 and 30.03.2015 framed by ACIT1(1), Indore.
2. As the issues raised in these appeals are mostly common, these were heard together and are being disposed off by this common order for the sake of convenience and brevity.
3. We will first take up the assessee’s appeal for Assessment Year 2008-09 for which following grounds of appeal have been raised.
ITA No. 441/Ind/2019
Assessment Year 2010-11
1. The Ld. CIT(A) has erred in upholding the re-opening of assessment when all necessary facts were disclosed in the return and during the course of the assessment proceedings. The reopening u/s 147/148 is bad in law and hence the assessment be quashed.
2. The Ld. CIT(A) has erred in upholding the addition of Rs.16,36,000/- being the amount of depreciation claimed as per the RBI guidelines.
3. The Ld. CIT(A) erred in not following the judgments cited before him for allowance of depreciation. The claim of depreciation on investment of fluid asset may please be allowed.
4. Brief facts of the case are that the assessee is a co-op. society engaged in the business of banking and providing credit facilities. The activities of the society are governed by the directives of the RBI. The return of income was filed on 15.10.10 declaring the income of Rs. 45,66,540/-. The accounts are audited and the Tax Audit Report is filed. During the course of the assessment proceedings, the Ld AO specifically raised a query vide letter dated 22/10/2012 regarding the allowability of depreciation on investments and vide letter dated filed 11.12.2012, the assessee gave the reply and also drew attention to the RBI Circular. The original assessment was completed on 28/12/2012 determining the total income of Rs. 45,66,540/-.
5. Subsequently notice u/s 148 of the Act was issued on 25.11.2016 on the ground that the income has escaped the assessment. This notice was issued after the expiry of four years from the end of the Assessment Year 2010-11. The assessee raised objection and filed the return under protest. However the Ld. A.O
reopened the assessment on the reason to believe that the income amounting to Rs. 16,36,000/- has escaped assessment. While framing the assessment, the Id. AO has made the addition of Rs.16,36,000/- on account of Depreciation in the value of investment. While making the addition, the Ld AO merely give a reason that the closing stock is valued at cost or market whichever is less and the assessee has not filed security wise details of valuation of investments. It was claimed before the Id. AO that the said claim is allowable as per the provisions of the Law and the guidelines of the RBI. Submissions made by the assessee were considered by the Ld. A.O but were not found tenable and in the reassessment proceedings u/s 143(3) r.w.s. 147 of the Act depreciation of investment of Rs.16,36,000/- was disallowed and added back to the income at Rs.45,66,540/- assessed u/s 143(3) of the Act vide order dated 28.12.2012. Income accordingly assessed at Rs.62,02,540/-. Aggrieved assessee preferred appeal before Ld. CIT(A) challenging the reopening of assessment as well as challenging the disallowance of depreciation but failed to get any relief.
6. Now the assessee is in appeal before the Tribunal. We will first take up Ground No.1 of assessee’s appeal for Assessment Year 2010-11 challenging the reopening of the assessment u/s 147 of the Act.
7. Ld. Counsel for the assessee submitted that the assessment has been reopened beyond four years on the ground that the claim