Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (7) TMI 236 - AT - Income TaxReopening of assessment - whether CIT(Appeals) erred in confirming the addition of depreciation amounting to ₹ 4,20,24,089/- in computing total income under normal provisions of the Act? - Held that:- We are unable to see any validity; rather, basis, for the Revenue to claim that the decapitalization of interest and commitment charges (hereinafter referred to as ‘the interest component’) ought to be from the opening WDV of the relevant block of assets. When the addition to the same, which is for the completed projects, is only during the current year, separately for the first half and the second half thereof, how and why the reduction on account of the interest component of the said addition be from the opening WDV? The reason, though has a live link with the claim of depreciation, is without basis in facts and, hence, not valid in law. The assessee’s objection to this reason recorded, communicated vide its letter dated 05.11.2007, merits being upheld. As regards the second reason, the validity of which is self-evident, the assessee claims that the figures per the TAR are in fact per the ‘revised’ TAR, filed on 20.11.2003, which were however omitted to be considered by the AO while framing the assessment. In our clear view, there has been thus no consideration of the material being now relied upon by the A.O., i.e., in recording the reasons for the reopening and in issuing the notice u/s.148. We are unable to read any further limitation in law in the A.O. proceeding to initiate the reassessment under such a situation, except of course of ‘reason to believe’, on which aspect there is again no doubt, as discussed earlier (refer: Asst.CIT v.Rajesh Jhaveri Stock Brokers [2007 (5) TMI 197 - SUPREME Court ]. Though the ld. CIT(A) has made out a case of there being no provision in law in filing a revised TAR and, therefore, the assessee’s claim of having furnished fully and truly all material facts, as not correct, we are not inclined to dwell on that aspect of the matter inasmuch as, without doubt, the revised claim represents, by the assessee’s own admission, the correct claim of depreciation. Whether legally permissible or not, the AO is not constrained to take cognizance thereof or form an opinion on its basis; the sole criteria being its relevancy and credibility Disallowance of depreciation - Held that:- Even as conceded during the hearing, and in any case of the matter, the assessee has no case; the depreciation allowed on assessment being only in terms of its revised TAR, representing the correct statement of depreciation. Where, then, is there any scope for dispute, with we having rather observed that inasmuch as omission to consider the revised deprecation claim, being in a sum lower than its original claim by ₹ 420.24 lacs, the assessee ought to have itself pointed out the same to the AO, even if post assessment, being clearly in the nature of a ‘mistake’ in not taking cognizance or account of the corrected claim. The same would have also enabled the assessee to bring any other aspect of the matter, where apparent from the record, beneficial to it, to the fore. This is as the scope of the reassessment proceedings is restricted only to bringing the under-assessed income to tax (refer: CIT v. Sun Engineering Works (P.) Ltd. [1992 (9) TMI 1 - SUPREME Court]. The asessee accordingly fails on this ground. Adjustment made in determining the books profit u/s. 115JB - Held that:- A company can provide for depreciation at different rates, adopting a different method of computing depreciation in books, which is to be consistent with the mandate of the Companies Act. If, as it appears, no part of the interest component stands charged to the operating statement (P & L a/c), there is no occasion to or question of decapitalizing the same in the assessee’s books of account, necessitating an adjustment to the book profit on account of revision in the book depreciation. We, accordingly, restore the matter back to the file of the assessing authority to allow the assessee an opportunity to satisfy the AO that the adjustment to book profit on account of the revised depreciation, as made, is either in excess or that no adjustment, in terms of its claim of book depreciation, to the book profit, was called for. The AO shall decide the matter by issuing definite findings of fact in accordance with law. We decide accordingly. - Decided in favour of assessee for statistical purposes.
|