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2014 (11) TMI 349 - AT - Income TaxJustification to invoke section 263 – Erroneous or prejudicial to interest of revenue or not – Held that:- Assessee is receiving incomes from rentals as well as service income from its industrial park - assessee was offering the income from rentals under the head “Income from House Property” and service income under the head “Business” - the time limit for reopening the assessment actually on this issue starts from this date and ends on or before 31.03.2011 - The assessment can be revised i.e., two years from the end of A.Y. in which the order was passed - As far as A.Y. 2007-08 is concerned, there was no order u/s 143(3) but there is an intimation u/s 143(1) dated 30.09.2008 - the issue which was decided in those years in later order was with reference to the subsidy received in A.Y. 2006-07 and subsidy and short term capital gain in A.Y. 2007-08 - The issue of assessing the correct income under the head “Business or Profession” or “House Property” was not an issue at all in those orders - exercising the jurisdiction by CIT to revise the orders u/s 263 on an issue which was already concluded by earlier order cannot be justified – relying upon CWT vs. Darshan Singh [2004 (8) TMI 74 - PUNJAB AND HARYANA High Court] - the additional grounds raised by assessee in these two years that CIT order u/s 263 revising a subsequent order u/s 147 on an issue which did not arise in that order was barred by limitation. The re-computation under the head “Business” would result in granting more depreciation and as rightly demonstrated by assessee in respective years, the computation will result in carrying forward more unabsorbed depreciation to the assessee not only in the impugned years but also in later years upto A.Y. 2012- 2013 - the incomes in the A.Ys. 2007-2008 and 2009-2010 were ultimately assessed under section 115JB on book profits as the normal computation resulted in losses or NIL income - the orders are not prejudicial to the interests of Revenue in any of the AYs - When this was pointed out by assessee in the course of proceedings u/s 263 by giving a detailed workings, CIT not only ignored them but even rejected them on the reason that assessee was entitled for 10% depreciation, whereas, 30% was claimed under the head house property towards repairs, on wrong presumption that the basis for those two claims per se are same - depreciation was claimed on assets which are valued more than ₹ 300 crores whereas 30% on rentals is only a small percentage when compared to depreciation. CIT got carried away by ‘additional depreciation’ and rejected the same holding that assessee has not produced any article or thing nor is engaged in generation or distribution in power so as to fit into the ambit of section 32(iia) - The word used ‘additional’ is not about additional depreciation but alternate claim of depreciation which was not claimed under the head ‘House property income’ - CIT wrongly considered it as a claim of “additional depreciation” ignoring that assessee’s claim of depreciation is under section 32(i) and not under section 32(iia), even as can be seen from the workings furnished - the claim of depreciation under the head “Business” is much more than the claims made under “Income from House Property” which results in not only working out higher losses / depreciation in the impugned years but also in later years as demonstrated before CIT by way of detailed working by assessee - the orders of AO are not prejudicial to the interests of Revenue – Decided in favour of assessee.
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