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2022 (6) TMI 258 - AT - Income TaxAdjustment due change in the depreciation rate - adjustment due acceleration in the depreciation rate owing to reworking of useful like of depreciable assets - HELD THAT:- As identical issue has arisen in its own case in Assessment Year 2012-13 [2018 (12) TMI 279 - ITAT DELHI] where the issue was set aside to the file of the Assessing Officer with certain directions. The fact and issue being the same, direction of the Assessee Officer should apply mutatis mutandis in the instant case. In view of the consensus arrived in the matter we restore the issue back to the file of the Assessing Officer to implement the directions as applicable in AY 2012-13 in terms of the order of Co-ordinate Bench. MAT computation - Disallowances on account of loss on revaluation of fixed assets and corresponding increase in 'book profits' for the purposes of Section 115JB - HELD THAT:- On perusal of the audit report of the Assessee-company, we observe that the Independent Statutory Auditor has expressed 'qualified' opinion on the financial statement and one of the qualifications relates to claim of loss on revaluation of assets in question. The qualification of Auditor has the effect of stating that book profits declared by the Assessee do not bear the trappings of true and fair expression of 'statement of profit and loss'. This being so, it cannot be said that book profits disclosed in the financial statement is sacrosanct and assessee acquires indefeasible right in the matter of its declaration of book profits. Secondly, we also find merit in the plea of the Revenue that notwithstanding the fact that 'loss on account of revaluation of fixed asset' does not arise by way of provision for diminution in the value of asset but an actual loss, such capital loss is not a deductible loss in nature nevertheless. The expression 'income defined under Section 2(24) of the Act does not include such capital losses. The capital loss claimed on account of impairment of assets, in our view, is liable to be adjusted for the purposes of determination of book profit similar to the adjustment available in respect of capital receipts not taxable under the normal provisions of the Act. This view is supported by the decision of the Coordinate Bench of ITAT in ITO vs. Ganesh Sagar Infrastructure (P.) Ltd.[2021 (11) TMI 1072 - ITAT AHMEDABAD] Assessee is not entitled to reduce the book profit by the capital loss debited to the P&L account which is subject matter of qualification by Auditors. Such capital loss is neither eligible for deduction under the normal provisions nor under the alternate provisions of taxation. We thus set aside the action of the CIT(A) on this score and restore the position taken by the Assessing Officer.- Decided in favour of revenue.
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