TMI Blog2015 (11) TMI 300X X X X Extracts X X X X X X X X Extracts X X X X ..... taken one view with which CIT does not agree, order of the A.O cannot be considered as erroneous order prejudicial to the interest of Revenue unless the view taken by the A.O is unsustainable in law. On the merits on the issue of amortization of cost of lease hold land, we find that the claim of Assessee of amortized value of lease hold land development was not u/s. 35D whereas ld. CIT in the order has held that the claim of Assessee was u/s. 35D and therefore in such a situation, A.O’s order on that issue cannot be considered to be erroneous more so because there was no such claim u/s. 35D by Assessee. As far as the claim of depreciation on office equipments @ 15% is concerned, it is Assessee’s submission that the claim of depreciation at 15% on the office equipment which comprises of similar items as are in the present year, has been allowed by the A.O in earlier years in the assessment order passed u/s. 143(3) and those orders have attained finality. As far as the claim of deduction u/s. 35D is concerned it is not the case of the Revenue that the expenses have been incurred in the year under consideration but on the contrary it is assessee’s submission that the same h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed deduction of ₹ 14,74,336/- u/s. 35D which according to ld. CIT was not allowable as Assessee was in the business of providing services and that the expenses were incurred prior to 1.04.2009. He accordingly issued a notice dated 16.03.2015 calling upon the Assessee to show cause as to why appropriate order u/s. 263 be not passed and in response to which Assessee interalia objected to the initiation of proceedings u/s. 263 and submitted that the notice was without jurisdiction. On merits, on the issue of disallowance of disallowance u/s. 14A it was submitted that the issue was subject matter of appeal before ld. CIT(A) and was considered and decided by him in appeal and therefore ld. CIT did not have jurisdiction in terms of clause C of Explanation below sub-section (i) of Section 263. With respect to the amortized value of lease hold land, it was submitted that though in the return of income, the deduction was claimed as amortization but the claim represents depreciation and it was Assessee s practice to claim 10% of the opening WDV plus additions and the same has been allowed in earlier years and that Section 35D had no role to play with respect to the deduction. Wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as elaborately explained in the appellants written submission dated 23.3.2015 addressed to him, the assessment order for the present assessment year could not be regarded as erroneous in respect of any of the issues that he had sought to raise vide his Notice u/s. 263 2. Without prejudice to the foregoing Ground No. 1, in law and in the facts and circumstances of the appellant s case, the impugned order is void and deserves to be cancelled also for the reason that vide his impugned order, the learned CIT had cancelled the assessment and directed the learned Assessing Officer to make fresh assessment of the appellant s total income for the present assessment year which it was not open to him to order, inter alia, for the following reasons: (a) for the reason that, as he had himself noted in the impugned order itself, the assessment order for the present assessment year had already been the subject matter of appeal which had been decided by the learned CIT(A) -VI, Ahmedabad, vide Appellate Order dated 17.10.2014 passed in appeal No. CIT(A)-VI/Addl./R.1/160/13/14; (b) for the reason that when his Notice u/s. 263 had raised only four specific issues [(1) disallowance u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n intangible asset, it was eligible to deduction for depreciation @ 25% as against @10% claimed by the appellant and that it could just not be open to him to regard the assessment order as either erroneous or prejudicial to the interests of the Revenue inasmuch as it granted the appellant s claim of deduction @10%. 6. Without prejudice to the foregoing Grounds No. 1, 2 and 3, in law and in the facts and circumstances of the appellant s case, the learned CIT has grossly erred in holding that the learned Assessing Officer s action of granting the appellant s claim for depreciation on Office Equipment @15% applicable to Machinery and Plant is erroneous and prejudicial to the interests of the Revenue on the ground that Office Equipment could not be regarded as Machinery and Plant and that it was covered by the block of assets Furniture and fittings eligible to depreciation @ 10%. He ought to have appreciated that for the reasons elaborately explained in the appellant s written submissions to him, it was only axiomatic that Office Equipment fell in the block of assets Machinery and Plant and that by no stretch of the imagination, it could be regarded as covered by the block o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2013 had filed the necessary details along with the chart showing details of claim made in each of the preceding year along with the order in which the initial claim was made. With respect to the claim of depreciation, Assessee vide letter dated 08.11.2012 had filed the chart showing the details of fixed assets acquired during the year along with the depreciation claimed thereon. Ld. A.R. pointed to the copies of the letters of the Assessee which were addressed to the A.O and the copies of which were placed at page 37 to 63 of the paper book. The ld. A.R. therefore submitted that after considering the submissions of Assessee and on being satisfied with the replies given by the Assessee no addition was made by the A.O. He therefore submitted that when the A.O has taken one view with which ld. CIT does not agree, the order of A.O cannot be treated as erroneous order pre-judicial to the interest of Revenue unless the view taken by the A.O is unsustainable in law. With respect to the amortization of lease hold land ld. A.R. further submitted that Assessee had not claimed the deduction u/s. 35D but had amortized the cost of lease hold lands over a period of 10 years and in support of wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be considered to be prejudicial to the interest of Revenue. He therefore submitted that the order of ld. CIT deserves to be quashed both on merits and legally. 7. The ld. D.R. on the other hand supported the order of ld. CIT and further submitted that when A.O has allowed the claim of the Assessee without any discussion, the order passed by the A.O was erroneous and prejudicial interest of Revenue. With respect to the claim of amortization of lease hold land that was allowed by A.O, he submitted that A.O had not examined the claim of the Assessee in the light of provisions of Section 35D(2) as the section does not provide for amortization of land and thus it was wrong application of law at the end of A.O. With respect to claim of depreciation on office equipment at 15%,he submitted that the office equipment cannot be considered to be plant and machinery and therefore Assessee was not eligible to claim the depreciation at 15% and therefore the claim made by the Assessee was not as per law. With respect to the claim of deduction u/s. 35D, he submitted that Assessee was not an industrial undertaking and therefore as envisaged in Section 35D of the Act as it had not started i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon ble Apex Court while interpreting Section 263 at para 7 has observed as under:- 7. There can be no doubt that the provision cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer, it is only when an order is erroneous that the section will be attracted. An incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous. In the same category fall orders passed without applying the principles of natural justice or without application of mind. 12. In the case of CIT vs. Gabriel India Ltd. (1999) 203 ITR 108, the Hon ble High Court while interpreting Section 263 has held that an order passed by the Assessing Officer cannot be termed as erroneous unless it is not in accordance with law. It further held that section does not visualize the case of substitution of the judgment of the Commissioner for that of the Income Tax Officer and pass the order, unless the decision is held to be erroneous. It further held that Income Tax Officer having exercised the quasi judicial power vested in him in accordance with law and having arrived at a conclusion that conclusion canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Assessee. As far as the claim of depreciation on office equipments @ 15% is concerned, it is Assessee s submission that the claim of depreciation at 15% on the office equipment which comprises of similar items as are in the present year, has been allowed by the A.O in earlier years in the assessment order passed u/s. 143(3) and those orders have attained finality. As far as the claim of deduction u/s. 35D is concerned it is not the case of the Revenue that the expenses have been incurred in the year under consideration but on the contrary it is assessee s submission that the same have been incurred in earlier years and the deduction u/s. 35D has also been allowed in earlier years. It is also not a case of the Revenue that on the issue of deduction under 35D, deduction for earlier years has been withdrawn by Revenue. In such a situation, without disturbing the earlier years, it cannot be said that the claim of deduction u/s. 35D was not allowable to the Assessee. The aforesaid submissions of ld. A.R has also not been controverted by Revenue. Further, before us Revenue has not brought any material on record to demonstrate that the view taken by the A.O was impermissible view and w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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