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2015 (9) TMI 1676 - AT - Income TaxRectification u/s 154 - whether the excess depreciation was correctly disallowed - HELD THAT:- In the present case the alleged “mistake” sought to be rectified is the depreciation granted to the assessee u/s 32, on applicable rates for the entire year, which as per the AO should actually have been restricted to 50% only since on the basis of information on record with the AO, the assets were put to use only in February 2007 and thus for less than 180 days. Thus AO wanted to reappreciate facts on record which have already been considered. The fact that the assets were put in use in February 2007 is a matter of debate. In the proceedings u/s 147, the assessee had stated that his assets were put to use on 28/08/2006. The assessee had also produced evidence of the same in the form of copy of WIP Plant & Machinery and WIP Electric Installation for the F.Y 2005-06 and 2006-07 showing the date of purchase of these assets, Fixed assets Register for the F.Y 2005-06 and 2006-07 showing the date of purchase,installation and date of put to use of these assets, Certificate of M/s Power Tracks approved Chartered Engineers to prove the date of installation of the new plant and machinery, Certificate of Central Excise Department regarding installation of new plant and machinery all of which showed that the assets were installed by August 2006. It supports case of assessee on merits. On the other hand the AO has relied upon detail of WIP provided by the assessee during reassessment proceedings which showed that the Capital WIP was capitalized in the month of February 2007 to believe that the assets were put to use for less than 180 days. Clearly this appears to be a matter which requires long drawn process of reasoning. The mere fact that capital WIP was capitalized in the month of February does not settle the issue of claim of depreciation. The assets may have been installed and ready for use earlier as claimed by the assessee. The point therefore is clearly debatable and requires further investigation which is not permissible u/s 154 of the Income Tax Act. In case of T.S. Balram, ITO, Vs. Volkart Brothers and Others, 1971 (8) TMI 3 - SUPREME COURT held “ A decision on a debatable point of law is not a mistake apparent from record.” Hon’ble Punjab & Haryana High Court in case of CIT Vs. Investment Trust of India Ltd. [2009 (8) TMI 9 - PUNJAB AND HARYANA HIGH COURT] held “ the issue relating to disallowance of depreciation on the ground that the asset did not exist in the assessee’s business of hiring out assets, is a debatable one and hence cannot be the subject matter in rectification proceeding.” Therefore the provision of section 154 of the Income Tax Act, 1961 is not attracted to the instant case. - Decided in favour of assessee.
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