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2021 (4) TMI 460 - AT - Income TaxRevision u/s 263 - Deduction u/s 80IC allowability - stand of the ld.CIT is that the Asstt.Year 2015-16 is the sixth year, whereas according to the assessee, the company has made substantial expansion in the Asstt.Year 2011-12 and is eligible for the exemption under section 80IC of the Act at the rate of 100% for five years for the Asstt.year 2011-12 - HELD THAT:- The Asstt.Year 2015-16 fall in those five years. The next grievance of the ld.Commission is that the AO has not carried out the investigation or verification about the claim of substantial expansion. The ld.CIT failed to take note of the facts that in the Asstt.Year 2011-12, the assessee has made substantial expansion. The assessment order in this assessment year was passed under a scrutiny assessment and the copy of this assessment order has also been placed on record by the assessee. AO has passed an assessment order on 12.3.2014 under section 143(3). The detailed explanations were available in the income-tax record, because the addition of ₹ 1.70 crores in the plant & machinery would increase WDV of the assets, and accordingly, depreciation would have also been accounted for. Earlier value of the assets was reported by the assessee at ₹ 1.68 crores. It has made further addition of ₹ 1.70 crores in the gross block of assets. Hon’ble Delhi High Court in the case of DG Housing Projects Ltd. [2012 (3) TMI 227 - DELHI HIGH COURT] has held that the ld.Commissioner should have not relegated to the point that assessment order is erroneous to the AO himself. The ld.Commissioner, after analyzing the record, ought to have recorded a categorical finding as to how the assessment order is erroneous. In the present case also, when the assessee took a specific plea in its reply that it has made substantial expansion in the Asstt.Year 2011-12, and it has produced those details, then the ld.Commisisoner ought to have considered the same, and should have recorded a categorical finding. Had that been done, then it would have avoided the second round of litigation at the level of the AO - The assessment order was passed under section 143(3) in the Asstt.Year 2011-12. Its claim of depreciation on enhanced value of the asset was not disturbed and therefore it is to be construed that these substantial expansion was in the knowledge of the Department right from the year the expansion was made and when the assessee has claimed the deduction under section 80IC from that year. The assessment year 2011-12 is to be construed as the fresh initial year, in view of the latest decision of the Hon’ble Supreme Court SHREE MANJUNATHESWARE PACKING PRODUCTS AND CAMPHOR WORKS [1997 (12) TMI 4 - SUPREME COURT]. Therefore, the assessee has rightly claimed exemption under section 80IC and the AO has rightly granted. The ld.Commissioner failed to point out any error for establishing that the assessment order is erroneous, and that the order of the AO cannot be sustained. We quash the impugned order of the ld.CIT under section 263 of the Act and allow the appeal of the assessee.
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