1 Wp2394-10 dmt IN THE HIGH COURT OF JDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 2394 OF 2010 Bombay Stock Exchange Ltd., (earlier known as The Stock Exchange, Mumbai). .. Petitioner. Vs. The Deputy Director of Income Tax (Exemption)-1(2) Mumbai & Ors. .. Respondents. Mr. Soli E. Dastur, Sr. Adv., with B.V. Jhaveri for the Petitioner. Mr. Suresh Kumar for Respondents. CORAM : J.P. DEVADHAR AND A.A. SAYED, JJ. DATE : 19TH APRIL, 2011. P.C. 1. Heard. Rule. Rule returnable forthwith. By consent of the parties taken up for final hearing. 2. This writ petition is filed challenging the notice dated 24.3.2010 issued under Section 148 of the Income-Tax Act, 1961 seeking to reopen the assessment for AY 2003-2004. 2 Wp2394-10 3. Regular assessment for AY 2003-2004 under Section 143(3) was passed on 30.03.2006. By the impugned notice, the assessment for AY 2003-2004 is sought to be reopened by recording the following reasons. “ Assessment u/s. 143(3) was completed in the instant case on 30.03.2006 taking the total income at Rs. NIL. Perusal of the case records reveal that while finalizing the assessment proceedings u/s. 143(3), the assessee was allowed to set off brought forward deficit of Rs. 32,44,001/- from earlier years. Further examination of case records reveal that the assess has claimed a depreciation on fixed assets amounting to Rs. 26,13,55,770/- in addition to allowance of capital expenditure to the tune of Rs. 1,82,56,004/-. The assessee trust has adopted the policy of claiming capital expenditure as application of income and also the depreciation on these capital assets as application of income, which in turn contravenes with the judgement of the Hon’ble Supreme Court in the case of Escorts Ltd. v/s. CIT 199 ITR 43 wherein the Hon’ble Court has clearly held that a double deduction cannot be allowed unless and until specifically provided by the 3 Wp2394-10 Act. In the instant case, the assessee trust is claiming the capital expenditure as application of income and also the depreciation on these capital assets which tantamounts to double deduction and hence infringes with the decision of the Hon’ble Supreme Court. Therefore, this has resulted in an under assessment to the tune of Rs. 24,90,95,275/- (Rs. 26,13,55,770/- minus 1,82,56,004/-) on account of double deduction claimed by the assessee. Hence, the assessee has failed to fully disclose the material facts and therefore i have reasons to believe that income to the tune of Rs. 24,90,95,275/- has escaped assessment. If approved, notice u/s. 148 will be issued. The issuance of notice is getting time barred by limitation on 31.03.2010. This is for your kind perusal and necessary directions.” 4. It is not in dispute that the additions sought to be made by reopening the assessment have been held on merits by this Court in the case of CIT vs. Institute of Banking (264 ITR 110 (Bom) that such additions are not permissible in law. Moreover in the present case, the assessment is sought to be reopened beyond four years. There is nothing on record to suggest that there was any failure on the part of the assessee to disclose fully and truly material facts 4 Wp2394-10 necessary for the purpose of assessment. In this view of the matter, in our opinion, the notice issued under section 148 of the Income Tax Act, 1961 cannot be sustained. 5. In the result, the impugned notice dated 24/3/2010 is quashed and set aside. Rule is made absolute. No order as to costs. ( A.A. SAYED, J. ) (J.P. DEVADHAR, J.)