Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (9) TMI 988 - AT - Income TaxRevision u/s 263 - inadequate enquiry v/s lack of enquiry - Incorrect allowance of deduction under s.80IA(4) of the Act & incorrect allowance of depreciation on subsidized capital asset - HELD THAT:- AO has rightly appreciated the peculiar circumstances and ignored the procedural latches and the claim of the deduction under s. 80IA(4) of the Act was allowed after verification in two rounds. The action of the AO being plausible, cannot be regarded as erroneous for taking into account Form 10CCB signed after the date of amalgamation in these peculiar circumstances. The direction of the PCIT on ‘further verifications are required’ in the context of revised Form 10CCB is not intelligible at all. The PCIT himself could have easily verified these obvious facts available on record and pointed out to Revenue. The PCIT has apparently acted without the authority of law asking for some directionless probe on categorical facts and that too after two rounds of assessments on the issue. We also fail to understand the purport of directions to the AO to verify whether assessee has filed amalgamated financial statement alongwith revised return from the effective date of amalgamation. The facts placed on record vouches for the stand of the assessee. Such non- speaking omnibus direction points to fishing expedition and would evoke an apparent unease in the minds of the tax payers. The PCIT on verification of the case records could have verified these facts very easily without any effort and could have come to some meaningful observations. PCIT could have gathered the apparent facts without any exertion to our mind. Inexplicably, the PCIT has rather asked the AO to revisit the facts already placed on record and for the purpose unknown to us. The facts available on record clearly points out to proper verification on aspects of deduction claimed and do not warrant any indulgence. Such act of the PCIT to dislodge a quasi judicial order under s. 263 of the Act cannot be countenanced. The revisional action on the first issue therefore is quashed. Correctness of depreciation on gross value of assets without deduction of subsidy receipt on capital assets obtained from the Government - The highlights of the industrial policy awarding the subsidy was referred to and relied upon. It was thus contended that when under the scheme no payment is made directly or indirectly to meet any portion of the actual cost of acquisition of capital asset and where the release of subsidy itself is determined on the basis of sales tax payment made by the assessee without any reference to the cost of project, Explanation 10 to Section 43(1) has no application. The reliance was placed on the judgment in the case of PCIT vs. M/s. Welspun Steel Ltd. [2019 (3) TMI 397 - BOMBAY HIGH COURT] wherein in the similar facts, the issue was decided in favour of the assessee. It was held therein that the government subsidy which is intended as an incentive to encourage entrepreneurs to move to backward areas and establish industries, would not be reckoned for the purposes of Explanation (10) to Section 43(1) of the Act. It was pointed out that the PCIT could have easily ascertained the position of law himself. When a point in issue was not raised in the reasons recorded for alleged escapement of income, the AO cannot be compelled in law to start a witch-hunt to examine all peripheral issues. This will tantamount to roving enquiry in the garb of reopening and expand its scope which is not permissible under s. 147 of the Act. The AO thus was not entitled to revisit the impugned issue of depreciation on capital subsidy. Secondly, the issue raised in second round was in relation to Section 80IA(4) of the Act for which no additions were made and therefore no other additions/ disallowances were permissible in law as echoed by several judicial precedents including CIT V. Jet Airways [2010 (4) TMI 431 - HIGH COURT OF BOMBAY]; Ranbaxy Laboratories Limited [2011 (6) TMI 4 - DELHI HIGH COURT]. Initiation of penalty under s.271B of the Act, if any, relates back to original assessment dated 14. 03. 2014 when the return was filed post amalgamation. Thus, the show cause notice is time barred in so as the impugned direction is concerned. - Decided in favour of assessee.
|