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2023 (8) TMI 272 - AT - Income TaxRectification u/s 154 - Computation of Tax - assessment of trust - denying exemption u/s 11 and computed the income of the assessee u/s 115BBE - AO added certain unaccounted capitation fee alleged to have been received - A.R. submitted that during the search, no unaccounted investment or sum of money or any other article or thing or bullion etc. was found. In the assessment order also, there was no discussion of any amount being added u/s 68, 69, 69A, 69B, 69C & 69D - HELD THAT:- The reading of the assessment order passed u/s 143(3) r.w.s. 153A/153D of the Act shows that the assessee has collected unaccounted capitation fees which was brought to tax and the same is taxed at the higher rate as per provisions of section 115BBE of the Act. In our opinion, there is no infirmity in the action of the AO on this issue and even if there is a mistake, it is debatable and the remedy lies with the assessee elsewhere and not by way of proceedings u/s 154 of the Act. Also brought to our notice at the time of haring that the assessee has filed appeal against the assessment order passed u/s 143(3) r.w.s. 153A/153D before the ld. CIT(A) and the same are pending before the ld. CIT(A). Being so, if the assessee has any grievance, it can agitate it before the first appellate authority and the first appellate authority shall not be influenced by our findings on this issue in this appeal and he shall take independent view on this subject on merit in accordance with law while disposing the appeal before him for all these assessment years. This ground of appeals of the assessee is dismissed in all appeals. Depreciation claim - When the income of the assessee is assessed as business income by rejecting the exemption claimed by assessee u/s 11 and the assessee is entitled for all usual deductions under the provisions of the Act while computing the income of the assessee under the head “business”, more so deduction u/s 30 to 38 of the Act to be granted and not the gross income to be taxed. When the exemption u/s 11 of the Act is rejected, the income of the assessee has to be computed in normal commercial manner. Even if there is no claim of deduction towards depreciation, the same to be granted as this is the mandatory deduction to be granted u/s 32 if the assessee owns and puts the assets to use. Accordingly, we direct the AO to grant the allowable deduction towards depreciation to the assessee. Ordered accordingly. This ground of appeals of the assessee is allowed in all appeals. Denial of exemption u/s. 11 - AO held that exemption u/s 11 cannot be granted because the issue of cancellation of registration is still pending before PCIT and also on the ground that the exemption is denied as per fresh findings of the second search carried out on 10.10.2019 - HELD THAT:- The assessee is claiming exemption u/s 11 of the Act by filing application u/s 154 of the Act. In our opinion, this is debatable issue and the AO has given reasons in the assessment order passed u/s 143(3) r.w.s. 153A/153D of the Act. This issue cannot be dealt under proceedings u/s 154 of the Act as it is very much debatable. However, we make it clear that the ld. CIT(A) while disposing the appeals before him against the order passed u/s 143(3) r.w.s. 153A/153D of the Act, he should take independent view of the matter without influencing by our this finding herein. Ordered accordingly. This ground of appeals of the assessee is dismissed in all appeals. Appeals of the assessee are partly allowed.
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