Case Law Details
CGS-CIMB Securities (India) P. Ltd. Vs CIT (Appeals), NFAC Mumbai (ITAT Mumbai)
ITAT Mumbai held that re-opening of assessment under section 148 of the Income Tax Act on account of mere change of opinion is bad-in-law and liable to be quashed.
Facts- In ROI, the Assessee had claimed software expanses of 2.61 crore, as revenue expenditure. AO held that the software expenses are capital in nature and the accordingly, disallowed the above said claim. However, AO allowed depreciation thereon@ 60%, which amounted to Rs.1.57 crore. The Assessee had challenged the above said disallowance by filing appeal before Ld.CIT(A). In fact, the Assessee had settled above said dispute under VSV scheme.
Subsequently, AO re-opened the assessment by issuing notice u/s 148 of the Act on 09.03.2020, that is after expiry of four years from the end of the present assessment year. The reason for re-opening is that the depreciation on software expenses should have been allowed @ 25% instead of 60% in the original assessment order and it has resulted in excess of allowance of depreciation resulting in escapement of income.
Conclusion- We hold that the assessing officer has reopened the assessment of the year under consideration on mere change of opinion only and the same is not permitted under the law. Accordingly, we hold that the reopening of assessment is bad in law and accordingly the impugned assessment order is liable to be quashed. Accordingly, we quash the orders passed by the tax authorities.
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