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M/s Eagle Press Versus The Asstt. Commissioner of Income-tax, Non-Corporate Circle 4 (1) , Chennai

Revision u/sec. 263 - contention of the assessee is that the CIT has not applied his mind and the show cause notice was prepared only by the ITO and the basic details as required are not available in the show cause notice - Held that:- Sec 263 allows CIT to call for and examine the records of any proceedings under the Income-tax Act, 1961, if he considers that the order passed by the Assessing Officer is erroneous and prejudicial to the interest of the Revenue, he may, after giving an opportunit .....

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the judgment of the Apex Court in CIT vs Electro House [1971 (9) TMI 10 - SUPREME Court ].- Decided against assessee

Claim of depreciation in respect of machinery purchased from Germany - CIT(A) directed AO to allow 50% claim - Held that:- As from the material available on record, it appears that the machinery was installed and put to use on 25.9.2010. The Customs Authorities inspected the usage and running of the machinery on 4.10.2010. When the Customs authorities inspected the mach .....

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aside and the Assessing Officer is directed to allow full depreciation in respect of the machinery purchased from Germany.- Decided in favour of assessee

CIT to initiate penalty proceedings u/s 271(1)(c) - Held that:- The authorities under the Income-tax Act are empowered to perform judicial function. In other words, the authority concerned has to take an independent decision in respect of the case whether to initiate penalty u/s 271(1)(c) of the Act or not? Though the Assessing Offic .....

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essing Officer to initiate penalty proceedings. The direction of the Administrative Commissioner to initiate penalty proceedings would amount to interference with judicial function of the Assessing Officer. Therefore, this Tribunal is of the considered opinion that the CIT has exceeded his jurisdiction in directing the Assessing Officer to initiate penalty proceedings u/s 271(1)(c) of the Act. Accordingly, the order of the CIT is set aside and direction issued by the CIT to initiate penalty proc .....

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. 2. Shri N. Devanathan, ld. Counsel for the assessee submitted that in respect of the machinery purchased by the assessee from Germany, the Administrative Commissioner found that it was put to use less than 180 days, therefore, the assessee is not entitled for full depreciation. According to the ld. Counsel, the machinery was actually installed and put to use on 25.9.2010. The Customs Department inspected the machinery on 4.10.2010 in respect of the claim made by the assessee for refund to the .....

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survive for adjudication before this Tribunal. 5. The ld. Counsel further submitted that the assessee made a claim of ₹ 53,61,645/- towards additional depreciation. However, the assessee realized later on that claiming additional depreciation is an inadvertent mistake, therefore, it withdrew the clam of additional depreciation. However, the CIT directed the Assessing Officer to initiate penalty proceedings u/s 271(1)(c) of the Act. Referring to sec. 271(1)(c) of the Act, the ld. Counsel s .....

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nalty proceedings. However, he has no authority to direct the Assessing Officer to initiate the penalty proceedings. Therefore, the direction issued by the CIT to initiate penalty proceedings u/s 271(1)(c) of the Act is beyond his jurisdiction. 6. Referring to the show cause notice issued by the CIT, the ld. Counsel submitted that the show cause notice was issued by the ITO and not by the CIT himself. The CIT observed that the assessee paid CENVAT on 4.10.2010. In fact, the assessee has not paid .....

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ee is entitled for 50% depreciation. Accordingly, the CIT directed the Assessing Officer to allow only 50% of the depreciation. Referring to the difference in the closing stock and turnover, the ld. DR submitted that the Assessing Officer, after verification has made no addition, therefore, no further adjudication is required. Referring to initiation of penalty proceedings, the ld. DR submitted that the CIT, being the administrative authority, can very well direct the Assessing Officer to initia .....

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We have gone through the provisions of sec. 263 of the Act. Sec. 263 of the Act enables the CIT to call for and examine the records of any proceedings under the Income-tax Act, 1961, if he considers that the order passed by the Assessing Officer is erroneous and prejudicial to the interest of the Revenue, he may, after giving an opportunity to the assessee and after making such enquiry as he deems necessary, pass an order enhancing or modifying the assessment or cancelling the assessment. There .....

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rmany, from the material available on record, it appears that the machinery was installed and put to use on 25.9.2010. The Customs Authorities inspected the usage and running of the machinery on 4.10.2010. When the Customs authorities inspected the machinery on 4.10.2010, it is obvious that the machinery should have been installed and ready for use before 4.10.2010. Therefore, this Tribunal is of the considered opinion that the machinery was in fact installed on 25.9.2010 and it is ready for use .....

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