(Hrishikesh Roy, J).

Heard Mr UK Borthakur, the learned counsel for the appellant/assessee. Also heard Mr S Sarma, the learned Standing Counsel, Income Tax Department on behalf of the respondent.

2. These appeals have been filed under Section 260A of the Income Tax Act, 1961 (here-in-after referred to as ‘the I.T. Act’), against the common order dated 13.12.2013 (Annexure-D) in the ITA No.4/Gau/2011 and the ITA No.5/Gau/2011 respectively of the Income Tax Appellate Tribunal, Guwahati Bench, whereby the Appeals preferred by the assessee were dismissed by declaring that the Assessing Officer was justified in re-assessing the tax, for excess claim towards depreciation, since the Gotanagar Truck Terminus (hereinafter referred to as ‘the Truck Terminus’) cannot be considered as a “plant” (deserving 25% depreciation), but it should be treated as a “building” attracting the lower rate of depreciation (10%).

3. The Appeals were admitted on the following substantial questions of law:-

(i) Whether on facts and in the circumstances, the Tribunal was justified in holding that there was justifiable material/ reasons to issue notice under Section 148 of the Income Tax Act, 1961 for reopening of the assessment for the Years 2004-2005?

(ii) Whether the Tribunal was justified on facts and in the circumstances of the case to hold that “Gotanagar Truck Terminus” is not a “plant” but a “building” for the purpose of claiming depreciation under Section 32 read with Section 43 of the Income Tax Act, 1961 and, therefore, the assessee was entitled to claim depreciation at the rate of 10 per cent applicable to “buildings” and not at the rate of 25 per cent, as prescribed for “plant”?

4. The assessee is a local authority and acts as a nodal agency for the State Government for various developmental activities in Guwahati. They filed their return of income for the concerned assessment years and declared their total income. For the truck terminus, they claimed depreciation @25% by considering the same to be a plant. Moreover Nil depreciation was claimed for land and building in the fixed asset schedule. The returns for the concerned assessment years, were processed under Section 143(1) of the I.T. Act and depreciation claimed was supported by the audited report under Section 44AB of the I.T. Act, the balance sheet and also the profit and loss accounts. The schedule of fixed assets for the purpose of assessment was also annexed to claim depreciation @25%, for the truck terminus by considering the same to be plant for the purpose of quantifying the applicable rate of depreciation.

5. The above claim, in the understanding of the Assessing Officer, was found to be an excess claim towards depreciation and thus the Asstt. Commissioner of Income Tax opined that he has reason to believe that income has escaped assessment, within the meaning of Section 147 of the I.T. Act. Thus notice for re-assessment was issued Section 148 of the I.T. Act.

6. In their response, the assessee submitted that their original return should be treated as their response to the notice under Section 148 of the I.T. Act and they contended in their letter dated 18.7.2007 as follows :-

“The truck terminus has been constructed on a plot of land measuring 27 Bighas (36,415 sq. mtr.) of land allotted by Government of Assam. We spend an amount of Rs.193.82 lakhs on development of land for construction of truck parking yards, RCC ramp for truck washing, dormitory for the truck drivers, lavatory to be used by the trucks drivers with an intention to earn income by way of parking fees from the trucks to be parked there. Around 300 trucks can be parked at a time there in the truck terminus. To earn the said income we made some investments like construction of ticket counter and office room measuring approximately 100 sq. mtr.

We are earning income by way of parking fee only and not rent. Thus, the asset under the head ‘Gotanagar Truck Terminus’ should be considered as plant and not as b