Pranab Kumar Chattopadhyay, J. - (1.) The petitioner herein has challenged the validity and/or legality of the notices all dt. 31st March, 2001 issued under Section 148 of the IT Act, 1961 for the asst. yrs. 1990-91 to 1996-97, the relevant financial years being the years ended on 31st March, 1990 to 31st March, 1996. It has been submitted on behalf of the petitioners that all the notices and the proceedings initiated thereunder are without jurisdiction and illegal since none of the conditions precedent for assumption of the jurisdiction under Section 147 of the IT Act have been satisfied.
(2.) The petitioner is engaged in the business of carriage of goods by ship. The ships are dry docked for carrying out periodical repairs. The said repairs are also mandatory for seaworthiness of the ship. The petitioner, as the assessee, had been claiming deduction for the expenditure on such repairs spread over in four years in all its assessments for several assessment years under the IT Act and the said claim was all along allowed by the respondents.
(3.) The learned counsel of the petitioner submits that the petitioner duly filed its return of incomes with the appropriate assessing authority having jurisdiction over petitioner's assessments and all the assessments for the aforesaid assessment years excepting the asst. yr. 1994-95 were duly completed under Section 143(3) of the IT Act. It has been urged on behalf of the petitioner that in course of the assessment proceedings for all the aforesaid six assessment years and also in the returns filed in all the said assessment years, the petitioner herein had duly and properly disclosed all the materials and relevant facts necessary for the purpose of assessment and according to the petitioner, there was no omission or failure of any nature whatsoever. The assessment for the asst. yr. 1994-95 was made under Section 143(1)(a) by issuing an intimation. In its assessment for the asst. yr. 1998-99, the-relevant accounting year being the year ended on 31st March, 1998, which is not the subject-matter of the instant writ proceedings, the petitioner claimed that the said expenses on repairs should be allowed fully in the year in which they were incurred instead of being spread over in four years. The AO in the assessment made under Section 143(3) of the Act disallowed the entire claim on the ground that the said expenditure was capital expenditure and not allowable. On the petitioner's appeal for the said asst. yr. 1998-99 the Tribunal by its order dt. 2nd July, 2004, held that the entire expenditure was allowable as a revenue expenditure in the year in which it was incurred.;