SANGEET LODHA,J. - (1.) This appeal is directed against order dated 4.3.14 of the Income Tax Appellate Tribunal (ITAT), Jodhpur Bench, Jodhpur, whereby the Cross Objection filed by the assessee in the appeal preferred by the Revenue against the order dated 31.7.13 of Commissioner of Income Tax (Appeal) [CIT (A)], Udaipur, has been allowed and while striking down the re-assessment proceedings initiated by the Assessing Officer (AO) for the assessment year 2005-06, on the change of opinion, the appeal preferred by the Revenue has been dismissed as having become infructuous.
(2.) The relevant facts are that the assessee filed its return of income for assessment year 2005-06, on 29.10.05, disclosing total income at Rs. 587,04,55,500/-, which was assessed under Section 143(3) by the AO on 26.12.07 at total income of Rs. 609,09,40,080/-. The order passed by the AO was appealed against by the assessee before the CIT (A), which reduced the assessed income to Rs. 587,04,55,500/-. After scrutiny of assessment, it was observed that the assessee has made incorrect claim of additional depreciation on Captive Power Plant (CPP) and Wind Mills. The re-assessment proceedings were initiated by the AO by issuing notice under Section 148 of the Income Tax Act, 1961 (for short "the Act"). The AO framed the assessment order under Section 143(3) read with Section 148 of the Act and disallowed the additional depreciation on CPP claimed by the assessee to the tune of Rs. 30,09,36,309/- and accordingly assessed the taxable income at Rs. 617,13,91,709/-. Aggrieved thereby, the assessee preferred an appeal before the CIT (A), Udaipur. It was contended on behalf of the assessee that the assessments completed after scrutiny assessment under Section 143(3), cannot be reopened under Section 147 merely on the basis of change of opinion. The CIT(A) arrived at the finding that the re-assessment proceeding initiated by the AO for the reasons recorded is valid. However, after due consideration of the matter on merits, the CIT(A) allowed by the additional depreciation for the Captive Power Plant of Rs. 30,09,36,309/-. In these circumstances, the Revenue preferred the appeal against the order of the CIT (A) before the ITAT. The assessee filed Cross Objection questioning the order passed by the CIT(A), confirming the proceedings under Section 147/148 of the Act. It was contended on behalf of the assessee that the assessee has disclosed true and complete material facts before the AO and no new facts had come on record, justifying the action in initiating re-assessment proceedings. It was contended that the re-assessment proceeding initiated by the AO on the basis of change of opinion, is not sustainable in the eyes of law. As noticed herein above, the ITAT has allowed the Cross Objection filed on behalf of the assessee, consequently, the appeal preferred by the Revenue questioning the order of the CIT(A) in allowing the additional depreciation, has been dismissed as having become infructuous. Hence, this appeal.
(3.) Learned counsel appearing for the Revenue contended that the ITAT has ignored the finding recorded by the AO that in the depreciation charts, the assessee never bifurcated amount of additional depreciation allowable on assets during the relevant assessment year and thus, apparently, there was failure on the part of the assessee in disclosing the complete facts. Learned counsel submitted that it is true that the assessment for assessment year 2005-06 was completed under Section 143(3) of the Act but the fact remains that the additional depreciation on CPP was allowed without examination and thus, it cannot be said that the reopening of the assessment is based on change of opinion. Learned counsel would submit that the ITAT has erred in dismissing the appeal of the Revenue without examination of the sustainability of the disallowance made by the AO, is ex facie erroneous.;