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2021 (10) TMI 273 - AT - Income TaxRevision u/s 263 by CIT - Partial allowance of deduction as CSR expenses - Proof of AO's order to be erroneous or prejudicial to the interest of the revenue - HELD THAT:- The amendment was made to Section 37 by Finance Act (No. 2) 2014 which came into effect from 01/04/2015 wherein it is declared that for the purposes of sub-section (1) any expenditure incurred by an Assessee on the activities relating to corporate social responsibility referred to in section 135 of the Companies Act, 2013 shall not be deemed to be an expenditure incurred by the Assessee for the purposes of the business or profession, however this case pertains to AY 2010-11 when there was no such embargo. Even the Assessing Officer, raised the specific query qua issue in hand which was replied by the Assessee and the AO formed his opinion based on the material available on record, law applicable to the particular AY and judgments applicable to the facts of the case, hence the same cannot be reviewed. May be the AO done inadequate enquiry, that also cannot be attributable to assessment order as erroneous in so far as it is prejudicial to the interest of the revenue - presumption and assumption of the ld. Commissioner is contrary to the facts and hence not tenable in the eyes of law. Claim of 50% of depreciation on wind mill - It is undisputed fact that by raising specific query vide column No. 8 of notice dated 17/12/2012, the AO asked the Assessee that there is huge investments in fixed assets specially plant & machinery. Despite this fact your turnover has decreased then what use has been put to new assets. The said query was replied by the Assessee vide column No. 8 of the its reply (Pg no. 47 of PB) wherein it was replied by the Assessee that during the year under consideration the Assessee company started its commercial production in Block Mill since December, 2009 and also set up another Wind Mill installed in the month of March. The said query and its reply goes to show that the AO has made the requisite enquiry, therefore the assumption of the Ld. CIT is wrong and contrary to the facts. From submission of the Assessee before the ld. Commissioner to the effect that in Schedule 20 of the Audited balance sheet under point No. 18, it is clearly mentioned that the installed capacity of wind mill has been increased from 1.2 MW to 2.7 MW during this year, and therefore goes to show that relevant materials have been produced not only before the AO but also before the ld. Commissioner, however, still the ld. Commissioner opined that claim of the Assessee requires verification. Even it is not the case here that no enquiry has been done by the AO qua issue in hand, therefore the conclusion drawn by the ld. Commissioner on the issue under consideration is unsustainable. Additional depreciation of power generation - As clarified by the Co-ordinate Benches of the Tribunal the electricity has been considered as "goods" and amendment brought out in section 32(1)(iia) by the Finance Act, 2012 to include the business of generation and distribution of power to the benefit of additional depreciation is only clarificatory, hence deserves additional depreciation. Even the AO while allowing the additional depreciation on power generation used his own wisdom and followed the dictum of the Hon'ble Courts, therefore his action cannot be faulted. On the aforesaid analyzations it is clear that the assumption of the ld. Commissioner to the effect that allowing additional depreciation on power generation as rendered the assessment order as erroneous insofar as it is prejudicial to the interest of the revenue, is wrong and contrary to the facts and judgments on the issue. Before coming to the conclusion that the order of the AO is erroneous and prejudicial to the interest of the revenue, the Ld. Commissioner ought to have conducted some minimal enquiry, which in the instant case qua the issue under consideration also, the ld. Commissioner failed to do - Decided in favour of assessee.
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