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2022 (8) TMI 618 - AT - Income TaxRevision u/s 263 - Claim of depreciation on Windmill - MAT computation - assessee had purchased windmill and claimed depreciation @ 80% on the same under the Income Tax Act - PCIT was of the view that depreciation claimed @ 80% by the assessee while computing books profits under section 115JB of the Income Tax Act is not permissible and instead, the assessee should have claimed depreciation @ 15.33% as per the Companies Act for the purpose of calculation of book profits under section 115JB - HELD THAT:- As decided in SONA WOOLLEN MILLS P. LTD. [2006 (10) TMI 99 - PUNJAB AND HARYANA HIGH COURT] the assessee is eligible to claim higher rate of depreciation and Income Tax Act. The Delhi ITAT in the case of HAL Offshore Ltd. [2019 (9) TMI 896 - ITAT DELHI] held that where depreciation provided in profit and loss account is at same rate as provided for purpose of profit and loss account being laid before Annual General Meeting (AGM), no addition could be made to assessee's income on ground that while calculating total income as per section 115JB, assessee had adopted rate of depreciation as per Income-tax Act instead of Companies Act in profit and loss account. The Andhra Pradesh High Court in the case of Deccan Tools Industries (P.) Ltd. [2014 (11) TMI 49 - ANDHRA PRADESH HIGH COURT] held that where for purpose of section 115J, assessee claimed depreciation at rates provided under Income-tax Rules, action of Assessing Officer in redrawing profit and loss account and adopting rates prescribed under Companies Act, was totally unauthorized. Thus we are of the considered view that in the instant facts, PCIT erred in facts and law in holding that the assessment order was erroneous and prejudicial to the interests of the revenue so far as ground number 3 of the assessee's appeal is concerned. Excessive payment to related party or not - Payments for job work not verified by AO at "fair market value" under section 40A(2)(b) - In the case of CIT v. Indo Saudi Services (Travel) (P.) Ltd. [2008 (8) TMI 208 - BOMBAY HIGH COURT] the Bombay High Court held that where revenue was not in a position to point out how assessee evaded payment of tax by alleged payment of higher commission to its sister concern, since sister concern was also paying tax at higher rate, disallowance of alleged excess commission paid to sister concern was not justified. In view of the above decisions, as applied to the assessee set of facts, Ld. PCIT in the 263 proceedings has held that the assessment order is erroneous and prejudicial for the reason that the assessee has not been able to bring on record comparable cases in order be able to substantiate that the payment is not unreasonable or excessive as per provisions of section 40A(2) (b) - Such onus cannot be cast upon the assessee to prove that payment made is not excessive/unreasonable by bringing on record instances of comparable cases. As held by various Courts/Tribunals, the onus is on the revenue to record reasons why payment by the assessee is excessive/unreasonable so as to invoke provisions of section 40A(2)(b) of the Act. For the foregoing reasons, in our view, PCIT has erred in facts and law in holding that the order is erroneous and prejudicial to the interests of the revenue, so far as ground number 9 of the assessee's appeal is concerned.
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