TMI Blog2017 (3) TMI 1337X X X X Extracts X X X X X X X X Extracts X X X X ..... es and stores written off and the consistent practice followed by the assessee, items of stores and spares having individual value of ₹ 10000 or less were debited only at the time of consumption. The learned tribunal has rightly held that the Assessing Officer is justified in accepting he claim of the assessee in debiting ₹ 92,66,211/- from the Profit and Loss Account. Under the circumstances, the learned tribunal has observed that the order passed by the Assessing Officer cannot be said to be prejudicial to the interest of the revenue, and therefore, the Commissioner was not justified in interfering with the order passed by the Assessing Officer in exercise of powers under Section 263 of the Act. - TAX APPEAL NO. 99 of 2017 - - - Dated:- 15-3-2017 - MR. M.R. SHAH AND MR. B.N. KARIA, JJ. FOR THE APPELLANT : MR KM PARIKH, ADVOCATE FOR THE OPPONENT : MR MANISH J SHAH, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) [1.0] Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Income Tax Appellate Tribunal, Ahmedabad A Bench (hereinafter referred to as the tribunal ) dated 31/03/2016 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ff shall be deducted from the cost of plant and machinery for depreciation. In the depreciation chart no such deduction was made from the WDV of plant and machinery. Further in Schedule 15 to P L A/c, ₹ 1366.90 as stores and spares consumed. Thus it can be inferred that stores and spares are treated as revenue expenditure. Since the spares are treated as revenue expenditure the purchase cost would have already been debited to P L A/c. The spares now becoming obsolete and being written off cannot again be allowed as a deduction as the amount would have already been debited to P L A/c as purchases. So the amount of obsolete spares and other items written off should have been disallowed and added to the income of the assessee. This being not done resulted in under assessment of income of ₹ 92,66,211/- [2.1] Notice under Section 263(1) of the Act was issued and served upon the assessee. The assessee filed the written submissions. It was the specific case on behalf of the assessee that at the time of the scrutiny assessment, after examining the case the Assessing Officer granted additional depreciation on windmill, and therefore, it was submitted that no error ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r as ground no.1 on which the learned Commissioner initiated suo motu revisional powers i.e. with respect to depreciation claimed under Section 32(1)(iia) read with Section 32(1)(iia) of the Act on windmill is concerned, the same is squarely covered against the revenue in light of the decision of the Division Bench of this Court in the case of Commissioner of Income-tax-1 Vs. Diamines Chemicals Ltd. reported in [2014]42 Taxmann.com 193(Gujarat) . [3.1] Now so far as ground no.2 on which the learned Commissioner took the assessment order under suo motu revision is concerned, it is vehemently submitted by Shri K.M. Parikh, learned advocate appearing on behalf of the revenue that the learned tribunal has not properly appreciated the facts as well as the clear findings made by the learned Commissioner while passing the order under Section 263 of the Act. It is vehemently submitted that the learned Commissioner found that certain inquiry was not held /conducted by the Assessing Officer while accepting the assessee s claim of written off on obsolete spares and stores worked out at Rs..92,66,211/-, and therefore, the assessment order was found to be erroneous and prejudici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 263 of the Act. Making the above submissions, it is requested to dismiss the present Tax Appeal. [5.0] Heard the learned advocates appearing on behalf of the respective parties at length. At the outset, it is required to be noted that the scrutiny assessment under Section 143(3) of the Act was taken under suo motu revision by the learned Commissioner in exercise of powers under Section 263 of the Act on two grounds, firstly on the ground that the Assessing Officer had wrongly held that the assessee is entitled to additional depreciation under Section 32(1)(iia) read with Section 32(1)(iia) of the Act on windmill and also on the ground that the assessee was not entitled to debit of ₹ 92,66,211/- on obsolete spares and stores and other items written off in the Profit and Loss account. [5.1] Now so far as ground no.1 with respect to the additional depreciation under Section 32(1)(iia) read with Section 32(1)(iia) of the Act on windmill, which was allowed by the Assessing Officer is concerned, at the outset it is required to be noted that the aforesaid issue is now not res integra and the same is concluded by the Division Bench of this Court against the revenue in v ..... 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