Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (4) TMI 543 - AT - Income TaxRectification of mistake - addition on account of depreciation of earlier years charged as per Companies Act in audited accounts written back in the books of Account during the assessment year 2007-08 - HELD THAT:- AO in the first round of litigation has made addition to the income of the assessee to the tune of 15% of the depreciation which led to the additions to the income of the assessee to which stood enhanced to the additions to the income of the assessee to the tune of entire depreciation write back by ld. CIT(A). The tribunal in first round of litigation gave relief to the assessee to the tune of ₹ 43.95 lacs and the assessee being aggrieved filed MA. The tribunal allowed the MA by restoring the issue back to its file for fresh adjudication of ground number 5 & 6. During the course of hearing before tribunal which was conducted pursuant to its order in MA through videoconferencing through virtual court, the counsel of the assessee and ld. CIT-DR have put in their arguments before the Bench to support their contentions. Both the ld. Counsel for the assessee as well ld. CIT-DR agreed that the matter need to go back to the file of the AO for fresh adjudication, as verifications are required to be made by AO as to the claim of depreciation made by the assessee in preceding years and impact of this reversal of depreciation of earlier years on tax liability of the assessee under the provisions of the 1961 Act for the impugned ay. Thus, keeping in view the entire factual matrix of the case and after hearing both the parties, we are of the considered view that this issue needs to go back to the file of the AO for fresh adjudication on merit in accordance with law. The assessee is directed to produce relevant evidences that it is claiming correct depreciation and written down value of assets for earlier years under the provisions of the 1961 Act while filing return of income with Revenue , and no prejudice is caused to Revenue by this reversal of depreciation and to demonstrate that this reversal of depreciation is tax neutral. - grounds of appeal filed by assessee allowed for statistical purposes. Valuation of closing stock of finished goods - assessee has not included excise duty payable on closing stock of finished goods while valuing its closing stock of finished goods, which as per Revenue infringes on Section 145A(ii) of the 1961 Act - The assessee is claiming that its finished goods are lying in warehouse , but the complete facts as to status /location of warehouse are not emerging from records. Thus, it is not clear from the records before us as to the location of the warehouse and whether the same is located within factory premises or is at some other location outside factory premises. Similarly, it is also not emerging from the records whether the said warehouse is a bonded warehouse which was set up by assessee within factory premises with the permission from excise department to shift finished goods from manufacturing site to said bonded warehouse without firstly paying excise duties. These facts need verification by the AO and the assessee is directed to produce records before AO to prove its stand , including producing excise records as well permission from excise department to set up bonded warehouse within factory premises and to shift finished goods to bonded warehouse without firstly paying excise duties. In case it is found by AO after verification that the finished goods are lying in the bonded warehouse within factory premises and the finished goods are allowed to be shifted by excise department to bonded warehouse without firstly paying excise duty , then obviously the liability for excise duty incidence has not occurred and the same cannot be included for the purposes of Section 145A(ii). Thus, we are restoring this issue back to the file of the AO for fresh determination of the issue in accordance with ratio of decision of Hon’ble Supreme Court in the case of Polyset[1999 (10) TMI 66 - SUPREME COURT] - Grounds of appeal filed by assessee allowed for statistical purposes.
|