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Principal Commissioner of Income Tax-I Versus Adani Port And Special Economic Zone Ltd.

2016 (7) TMI 913 - GUJARAT HIGH COURT

Revision u/s 263 - claim of deduction amortized value of leasehold land under the provisions of section 35D and depreciation on office equipments - Held that:- As regards the claim for depreciation on office equipments at the rate of 15%, the Tribunal noted that such claims had been allowed in earlier years in the assessment orders passed under section 143(3) of the Act and such orders had attained finality. Insofar as the claim under section 35D of the Act is concerned, the Tribunal has found t .....

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view. - The revenue had not brought any material on record to demonstrate that the view adopted by the Assessing Officer was an impermissible view and was contrary to law so as to warrant exercise of revisionary powers under section 263 of the Act. Having regard to the findings recorded by the Tribunal on the merits of each claims of the assessee, it is evident that the view adopted by the Assessing Officer was a plausible view. It is settled legal position, as held by the Supreme Court in .....

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Devani ) 1. By this appeal under section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act ), the appellant - revenue has called in question the order dated 29.10.2015 passed by the Income Tax Appellate Tribunal, Bench A , Ahmedabad (hereinafter referred to as the Tribunal ) in ITA No.1362/Ahd/2015, by proposing the following question, stated to be a substantial question of law : Whether the Income Tax Appellate Tribunal has erred in law and on facts in setting aside the order .....

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143(3) of the Act whereby, the total income of the assessee was determined at ₹ 27,74,59,380/-. Subsequently, the Commissioner of Income Tax, upon examination of the case record of assessment, noticed that: (i) ₹ 17.08 crore was required to be disallowed under section 14A read with rule 8D of the Act but only an amount of ₹ 6.12 crore was disallowed by the Assessing Officer; (ii) The assessee had claimed deduction of ₹ 3,75,48,727/- on account of amortization value of le .....

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curred prior to 01.04.2009. He, accordingly, issued a notice dated 16.03.2015 calling upon the assessee to show cause as to why appropriate order under section 263 of the Act be not passed. 3. In response thereto, the assessee objected to the initiation of proceedings under section 263 of the Act and submitted that the notice was without jurisdiction. On the merits of the action proposed to be initiated, the assessee submitted that with respect to the amortized value of leasehold land, though in .....

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thin the block of assets, namely, machinery and plant and therefore, the assessee has rightly claimed the depreciation. With regard to the deduction claimed and allowed under section 35D of the Act, it was submitted that the preliminary expenses were incurred before the commencement of business and were deductible under clause (i) of section 35D(1) of the Act and the same were allowable even to businesses which were not industrial undertaking or units. 4. The Commissioner of Income Tax (Appeals) .....

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rdingly, set aside the order dated 28.03.2013 made under section 143(3) of the Act and directed the Assessing Officer to make fresh assessment of the total income of the assessee. The assessee carried the matter in appeal before the Tribunal and succeeded. 5. Mr. M. R. Bhatt, Senior Advocate, learned counsel for the appellant submitted that the order passed by the Tribunal is erroneous for the reason that being a quasi-judicial authority, the Assessing Officer cannot take a view, either against .....

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n that any order passed by the Assessing Officer without proper inquiry and investigation is erroneous and prejudicial to the interest of the revenue. Referring to the merits of the claim made by the assessee as had been allowed by the Assessing Officer, it was submitted that insofar as the claim for depreciation at the rate of 15% on office equipment is concerned, if in the earlier years, no inquiry was caused and the deduction was given without such inquiry, the Commissioner would not be estop .....

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allowed by the Assessing Officer without properly appreciating the relevant rules. It was submitted that the claim for deduction under section 35D of the Act amounting to ₹ 14,74,336/- had been wrongly allowed as the amended provisions of section 35D which were introduced by Finance Act, 2008 with effect from 01.04.2009, was not available to the assessee since it has not started its business on or after 01.04.2009. It was, accordingly, urged that the appeal requires consideration on the qu .....

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Commissioner of Income Tax does not agree, the order of the Assessing Officer cannot be considered as an erroneous order, prejudicial to the interest of revenue, unless the view taken by the Assessing Officer is unsustainable in law. The Tribunal has, thereafter, examined the merits of the findings recorded by the Assessing Officer as to whether the view adopted by the Assessing Officer is sustainable in law and has recorded thus: 15. On the merits on the issue of amortization of cost of lease .....

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ts @ 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 s .....

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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 was contrary to law or was upon erroneous application of legal principles initiating the exercising of revisionary powers u/s 263. Further, the case laws are relied upon by the Revenue are distinguishable on facts and therefore, cannot be applied to the facts of the present case. In view of the aforesaid facts, we are of the view that ld. CIT was not justi .....

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s, more so, when there was no such claim under section 35D by the assessee. 9. As regards the claim for depreciation on office equipments at the rate of 15%, the Tribunal noted that such claims had been allowed in earlier years in the assessment orders passed under section 143(3) of the Act and such orders had attained finality. Insofar as the claim under section 35D of the Act is concerned, the Tribunal has found that the deduction under section 35D had been allowed in the earlier years also an .....

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