TMI Blog2017 (1) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Tribunal in favour of the assessee for A.Y. 2004-05 onwards by observing that the concept of “Block of Asset” w.e.f. 01-04-1988, individual assets had lost their identity once it entered with the Block of Assets and only the Block of Assets had to be considered. It was held that the test of user had to be applied upon the block of assets as a whole and not on individual assets. On appeal by the Revenue, the Hon’ble High Court in f G.R. Shipping Ltd. [2009 (7) TMI 1169 - BOMBAY HIGH COURT ] dismissed the appeal filed by the Revenue. Therefore, since the Ld.CIT(A) in the instant case has allowed the claim of depreciation on the block of assets installed at Hyderabad Division which were not used during the impugned assessment year by following the decision of Hon’ble Bombay High Court, therefore, in absence of any contrary material brought to our notice we do not find any infirmity in the order of the CIT(A). - Decided in favour of assessee - ITA Nos.1108 to 1113/PUN/2014 - - - Dated:- 23-12-2016 - MS. SUSHMA CHOWLA, JM AND SHRI R.K. PANDA, AM For The Assessee : Shri Sanjay Kapadia For The Revenue : Shri Rajeev Kumar, CIT ORDER PER R.K. PANDA, AM : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the revenue. 3.1 Similarly for A.Yrs. 2008-09 to 2010-11 he observed that depreciation on assets of Hyderabad unit of the assessee, which was not in use, was not disallowed by the Assessing Officer. He observed that this is a recurring issue on which additions have been made for A.Yrs. 2004-05 to 2007-08. Moreover, since the assets have not been put to use during the relevant period, assessee is not entitled for depreciation. Therefore, the said depreciation claim of Hyderabad unit should have been disallowed for the year under consideration as well. According to him, non disallowance of depreciation in respect of Hyderabad unit of the assessee prima-facie makes the assessment orders passed by the Assessing Officer for the above years is erroneous in so far as they were prejudicial to the interest of the revenue. 3.2 There is one more issue on which the Ld.CIT also invoked his revisional powers for all the years, i.e. supply of raw material to Rasiklal M. Dhariwal (HUF). However, since no addition has been made by the Assessing Officer in the order passed u/s.263/153A r.w.s.143(3) subsequent to the 263 order passed by the CIT on the basis of submission made by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant craves leave to add, amend, alter, substitute, modify any or all of the above grounds of appeal, if necessary, on the basis of submissions to be made at the time of personal hearing. 6. Identical grounds have been raised by the assessee for the other years. 7. The Ld. Counsel for the assessee at the outset filed the following chart : Sr. No. Issues raised by the Ld.CIT (Central), Pune u/s.263 of the Act Action taken by the Ld. Assessing Officer, Central Circle-1(1), Pune u/s.143(3) r.w.s. 263 of the Act. A.Y. 2004-05 (Rs.) A.Y. 2005-06 (Rs.) A.Y. 2006-07 (Rs.) A.Y. 2008-09 (Rs.) A.Y. 2009-10 (Rs.) A.Y. 2010-11 (Rs.) 1 Disallowance u/s.14A 35,85,614 6,68,962 5,97,104 NA NA NA 2 Supplies of Raw Material to R.M. Dhariwal (HUF) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 submitted that the issue relating to disallowance of expenditure u/s.14A and the depreciation on assets of Hyderabad Unit have been decided in favour of the assessee. Therefore, even on merit also, the CIT is not justified in invoking the jurisdiction u/s.263 of the I.T. Act. 11. The Ld. Departmental Representative on the other hand strongly opposed the arguments advanced by the Ld. Counsel for the assessee and supported the order of the Ld.CIT. He submitted that the provisions of section 153D is not a mandatory requirement and is an administrative requirement. Therefore, the CIT cannot be faulted with for invoking the jurisdiction u/s.263 in a case where the Assessing Officer has passed the order u/s.153A r.w.s. 143(3) with the prior approval of the Addl.CIT u/s.153D of the I.T. Act. So as the arguments on merit are concerned, the Ld.CIT DR heavily relied on the order of the CIT. He also drew the attention of the Bench to the provisions of section 2(7A). 12. We have considered the rival arguments made by both the sides, perused the orders of the AO and the Ld.CIT and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowing the decision of the Lucknow Bench of the Tribunal in the case of Mehtab Alam (Supra) held that CIT(A) is not justified in assuming jurisdiction u/s.263 when the order has been passed in terms of section 153D of the Act. 14.2 We find the Hyderabad Bench of the Tribunal in the case of M/s. Trinity Infra Ventures Ltd. (Supra) had an occasion to decide an identical issue and it held that the assessment order approved by the Addl.CIT u/s.153D cannot be subject to revision u/s.263 of the I.T. Act. The relevant observation of the Tribunal at Para 5.4 of the order reads as under : 5.4. The Ld. Counsel for the assessee has further submitted that the assessment under section 143(3) read with section 153C was passed after getting approval of Addl. CIT under section 153Dof the I.T. Act and therefore such an assessment cannot be revised without revising the directions of the Addl. CIT under section 153D of the I.T. Act. The Ld. Counsel for the assessee, has relied upon the decisions of this Tribunal in the case of Ch. Krishna Murthy vs. ACIT, C.C.3, Hyderabad in ITA.No.766/Hyd/2012 dated 13.02.2015 and also the decision of Lucknow Bench of ITAT in the case of Mehtab Alam 288/Luc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We therefore are of the opinion that the Ld.CIT was not justified in assuming jurisdiction u/s.263 of the I.T. Act on the issue of disallowance u/s.14A 18. Similarly, the issue relating to depreciation on assets of Hyderabad Division has been decided by the Tribunal in favour of the assessee for A.Y. 2004-05 onwards by observing as under : 161. After hearing both the sides, we find no infirmity in the order of the CIT(A). The AO had disallowed the depreciation on the ground that the assessee has not used the assets during the year as the unit was non functional. We find the issue has been decided in faovur of the assessee by the decision of the Hon ble Bombay High Court in the case of G.R. Shipping Ltd.(Supra). In that case the assessee was engaged in shipping business and owned a barge which was included in the block of assets. The barge met with an accident and sunk on 06-03-2000, i.e. relevant to A.Y. 2000-01. As the efforts to retrieve the barge was uneconomical the barge was sold on as is where is basis for ₹ 55 lakhs in the month of May 2001 relevant to A.Y. 2002-03. As the barge was non operational and not used for business at a later date in A.Y. 2001-02 the A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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