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2016 (3) TMI 82 - ITAT CHENNAIAddition of excess depreciation claimed in the past - CIT(A) deleted the addition - Held that:- In this case, the assessee had obtained the benefit of depreciation to the tune of ₹ 23,92,470/- in earlier years. Hence, when the asset was written off by reducing the written down value of the assets, the assessee was not entitled for the depreciation benefit which was granted earlier. It is an undisputed fact that the assessee had claimed depreciation on the entire block of assets written down value from the year of acquisition of the assets and it was already allowed by the Department. When, it was noticed that an amount of ₹ 43,88,000/- found to be excess in the value of the assets, the same was reversed by the assessee during the current year and depreciation allowed on that amount on earlier occasion has to be withdrawn and to be added back in this year, as otherwise, the assessee company will get double benefit, which is not justified. In view of this, we hold that the depreciation claimed by the assessee on the above value of ₹ 43,88,000/- in earlier year, which the assessee is not entitled, need to be brought back to tax u/s.28(iv) of the Act as the value of benefit is arising from the business of the assessee. After reducing the said amount of depreciation granted earlier from the amount of ₹ 43,88,000/-, the balance amount is to be reduced from the closing written down value of block of assets. Accordingly, we direct the AO to bring back to tax, the amount of depreciation granted to the assessee in the earlier years on the alleged amount of ₹ 43,88,000/- u/s.28(iv) of the Act and re-determine the closing written down value of block of assets in the year under consideration - Decided in favour of revenue Disallowance of expenses incurred towards premium of premature redemption of debentures - Held that:- Applying the ratio laid down in the case of Madras Industrial Investment Corporation Ltd. V. Commissioner of Income Tax reported in [1997 (4) TMI 5 - SUPREME Court] and National Engineering Industries Ltd., VCIT [1998 (9) TMI 65 - CALCUTTA High Court] where under it is held that there is no distinction between discount and premium, the discount on debentures as well as the premium payable on actual redemption on debentures in future years and the expenditure incurred for issue of such debentures are all held to be the revenue expenditure, entitled to be spread over the period of debentures and consequently, allowable as deduction in a particular assessment year - Decided in favour of revenue Addition made on account of difference in arm’s length under Transfer Pricing - Held that:- ALP should be determined on a transaction by transaction basis and not on an aggregate basis as argued by the ld. AR. Hence, we reverse the order of the CIT(Appeals) and restore that of the AO. This ground of appeal by the Revenue is allowed. Reopening of assessment - Held that:- It is possible that with due diligence the Assessing Officer would have ascertained this fat at the time of original assessment also, but in view of the explanation (1) it does not mean that there was no default on the part of the assessee. Hence, reopening u/s.147 is held to be valid. The assessee has tried to take shelter under the exception provided by the above stated proviso where an assessment under sub-section (3) of section 143 has been completed, no action after the expiry of four years from the end of the assessment year can be taken. But as stated above, when the assessee has not disclosed fully and truly the facts necessary for the assessment , this proviso will not come to its rescue. Same is applicable to other reasons records for reopening of assessment. Consequently, we hold that the entire reassessment proceeding in this case is valid and therefore, the action of the Assessing Officer is upheld. The assessee fails on this legal issue. Though the assessee company claimed that the entire amount of ₹ 63.02 crores is capital receipt, the fact gathered show that at least a part of it should be on revenue account.Further, the assessee company has made a wrong claim u/s 80HHC treating the interest receipts as export incentive. In these circumstances, we have reason to believe that the Income chargeable to tax has escaped assessment in view of failure on the part of the assessee company to disclose truly and fully all material facts as required by the proviso to section 147 in not offering the compensation received as revenue receipts and also has made a wrong claim of deduction u/s 80HHC by treating the interest receipts as export incentives - Decided against assessee ALP - assessee's claim of adoption of ALP at USD 965/MT rejected - Held that:- In this case, price variation is more than 5%, Assessing Officer is justified in making adjustment of ALP determined by the tax payer and the proviso to sec.92C provides that where more than one price may be determined by the most appropriate method, the ALP shall be taken to be the arithmetical mean of such prices. In the instant case only one price has been determined under most appropriate method, the question of application of the proviso does not arise. - Decided against assessee
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