NV Vasudevan, Judicial Member. - These are appeals by the assessee against a common Order dated 29-1-2004 of Commissioner of Income-tax(A)-VI, New Delhi relating to the assessment years 1994-95 and 1995-96.

2. The first ground of challenge in these two appeals is to the validity of initiation of reassessment proceedings by invoking the provisions of section 148 of the Income-tax Act. The facts, which are necessary for adjudication of the aforesaid ground of appeal of the assessee are as follows. The assessee is a Private Limited Company carrying on business of rendering consultancy in the field of architecture. They are also engaged in the business of rendering consultancy services in the field of engineering and planning etc. For the assessment year 1994-95, the assessee filed a return of income declaring income of Rs. 17,41,030 on 30-11-1994. By letter dated 8-9-1995 the Assessing Officer called upon the assessee to file certain details. The assessee had in the computation of income claimed depreciation of Rs. 54,42,165. A depreciation chart had been enclosed along with the computation of income. Under the head plant and machinery costing less than Rs. 5,000 the assessee had claimed depreciation at 100 per cent of the total value of plant and machinery of Rs. 51,11,440. These consisted of shuttering plates valued at Rs. 50,83,027 and office equipment worth Rs. 28,413. In the letter of the Assessing Officer dated 8-9-1995 the Assessing Officer had called upon the assessee to furnish photo copies of purchase bills for addition of Rs. 57,51,101 being the addition to the depreciable assets during the P.Y. the assessee was asked to produce photocopies of purchase bills above Rs. 1 lakh. By letter dated 26-9-1995 the assessee furnished photo copy of purchase bills, which were about 54 in number. In another letter dated 26-10-1995 the assessee had also informed the Assessing Officer that the shuttering sheets had been leased out to Bhavana Builders (P.) Ltd. and M/s. Unitech Ltd. And that since the value of each of the shuttering plates was less than Rs. 5,000 full depreciation under first Proviso to section 32(i) and (ii) of the Act had been claimed. The assessee also pointed out that each shuttering plate is physically a distinct unit and functionally a plant, being one of the tools of business of civil construction work and would not lose its identity when used in a group arranged in different dimensions and patterns according to the need of the construction work. The Assessing Officer passed an order under section 143(3) of the Act dated 20-11-1995 accepting the claim of depreciation as made by the assessee in the depreciation chart filed along with the return of income.

3. The facts with regard to assessment year 1995-96 are also identical. In this year also along with the computation of income the addition to plant and machinery during the P.Y. of Rs. 52,71,762 being shuttering plates each costing less than Rs. 5,000 have been given in the depreciation chart. By letter dated 4-3-1996 the Assessing Officer called for details of the addition to the Fixed Assets. The assessee vide its letter dated 16-5-1996 again reiterated its stand that depreciation was to be allowed in respect of shuttering sheets whose value was less than Rs. 5,000 each at 100 per cent. The Assessing Officer passed an order of assessment dated 3-6-1996 accepting the claim for depreciation as made by the assessee.

4. The assessment for assessment years 1994-95 and 1995-96 were sought to be reopened by the Assessing Officer by recording the following reasons:

1994-95: "Shuttering materials which were purchased in bulk were put to use for less than 180 days. Whereas assessee has claimed 100 per cent depreciation on the same. As per the provisions of section 32, depreciation is required to be restricted to 50 per cent of the normal rate. Thus assessee has claimed excessive depreciation of Rs. 44,68,958 on the above count."

1995-96 : "Shuttering materials which w