Law:

Section:

Section 147 of the Income-tax Act, 1961 (corresponding to section 34(1)(a) of the Indian Income-tax Act, 1922) - Income escaping assessment - Illustration - Assessment years 1947-48 to 1957-58 - Assessment of assessee was reopened under section 34(1)(a) of 1922 Act on ground that he was not entitled to depreciation in respect of certain ships which were borne on its fleet for more than 20 years - AAC held that assessee having furnished all necessary particulars at time of original assessments, necessary conditions for initiating action under section 34(1)(a) of 1922 Act were not satisfied - Tribunal held that there being no excessive depreciation, there was no escapment - Whether Tribunal having not considered aspect as to whether there was any failure or omission on assessee's part to disclose fully or truly any material or relevant fact, question regarding correct invocation of section 34(1)(a) of 1922 Act could not be disposed of, because if there was no failure, there could be no reopening and if there was no reopening question of assessee's entitlement to get depreciation even in respect of ships borne on its fleet for more than 20 years would not arise - Held, yes (Matter remanded to Tribunal). FACTS The assessee, a non-resident shipping company, had been allowed depreciation, in the original assessments, in respect of certain ships which were on its fleet for more than 20 years. In those proceedings, the assessee had not furnished in respect of each ship the number of years for which it was borne on its fleet. Subsequently, the ITO, being of the opinion that if a ship was borne on the fleet for more than 20 years, the assessee was disentitled to depreciation in respect of those ships, reopened the assessments under section 34(1)(a) of the 1922 Act and disallowed the depreciation for certain ships. On appeal, the AAC held that the assessee had filed all the necessary particulars of depreciation at the time of original assessment and that there was no failure on the part of the assessee to disclose fully and truly the material facts necessary for the assessments. He, accordingly, set aside the ITO's order on the ground that the necessary conditions for…

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