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TMI Blog2018 (1) TMI 594X X X X Extracts X X X X X X X X Extracts X X X X ..... reasonable cause in not filing the appeal within the stipulated time. 3. Briefly the facts of the case are, the assessee is a Company engaged in the manufacture of Iron and steel products, Telecom Products and Power Transmission Towers. It filed its return of income for AY 2008-09 on 5.1.2010 declaring total income of Rs. 1,60,09,484/-. The Assessing Officer completed the assessment u/s 143(3) on 28.12.2010 determining the assessed income at Rs. 1,67,58,560/-. 4. The CIT noted that by virtue of powers vested vide section 263 of the I.T. Act, his predecessor called for the assessment records of the assessee Company and examined them. On examination of the assessment records, the following discrepancies were noted: (i) The assessee has claimed depreciation on plant & machinery to the extent of Rs. 47,11,30,766 @ 80%. This higher rate of depredation i.e, 80% is allowable to an undertaking engaged in generating power or to plant & machinery which is an energy saving devise, The assessee company is engaged in manufacture of iron and steel products, transmission towers and power transmission towers and hence is not entitled to depreciation on plant & machinery @ 80%. (ii) It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling mill rolls at 80%. A copy of the depreciation chart highlighting the rate of depreciation is enclosed for your immediate reference. Therefore, the claim of the company is justified. It is further submitted that when a similar issue arose in respect of group concern M/s Sujana Metal Products, the AO examined the eligibility of the depreciation claim at your instructions vide proceedings No. F.No. CITIII/ Revision/263(33)/2011-12 dt. 29/03/2012 and the officer has confirmed the eligibility of deprecation in para 10 of his assessment order. A copy of the order dated 17/01/2013 issued in their respect is enclosed herewith for your kind perusal. The revised guidance note on accounting treatment on excise duty issued by the Institute of Chartered Accountants of India (ICAI) effective from 01/04/1999. The relevant portion is reproduced as under: "Accounting treatment of inputs received - when inputs are purchased, purchase price (net of excise) should be debited to purchase account and excise on inputs should be debited to Central Credit receivable (input) account. Total invoice account (i.e. net purchase price plus excise) will be credited to suppliers account (as the suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her the equipment mentioned in the statement of account is the same equipment which is entitled to 100% depreciation. Moreover, it is not clear why the assessee has claimed only 80% depreciation, if it is entitled to 100% depreciation. Moreover, the AO has not verified whether MS chilled bars and rolling mill rolls are one and the same and are entitled for 80% depreciation. In the absence of any enquiry, the assessment order passed on 28/12/2000 is erroneous and prejudicial to the interests of revenue. The assessment order is set aside with direction to the AO to verify whether MS chilled bars and rolling mill rolls are the same thing and also whether the air pollution control equipment and water pollution treatment equipment purchased by the assessee is one which is entitled to higher rate of depreciation and that such air pollution and water pollution equipment was installed within time at the factory premises of the assessee. 6.1 As regards the issue of CENVAT credit, the CIT observed that the assessee's AR has stated that the company has followed guidance note issued by ICAI and inputs have been debited at purchase price net of excise and the unutilized CENVAT credit has also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11.The Ld. CIT ought to have appreciated the fact that the assessee is into the business of manufacturing of transmission towers and the additional depreciation claim on Plant and machinery is as per the provisions of the Income Tax Act,1961.. 12. The Ld. CIT erred in not considering the fact that when a similar issue arose in respect of assessee's group concern, the AO examined the eligibility of the depreciation claim and passed an order allowing the same. 13.The Ld. CIT has erred in observing that unavailed CENVAT credit of RsA,97,61,782/- should form part of cost of purchases. 14. The Ld. CIT ought to have appreciated the fact that the treatment given by the assessee was as per the guidance note issue by ICAl and was correct as per law, 15. The Ld. CIT erred in passing order u/s 263 without considering the fact that the AO has exercised quasijudicial power vested in him in accordance with law and arrived at conclusion that the treatment adopted by the assessee in respect of unavailed CENVAT credit was correct and as per law. 16. The Ld. CIT has erred in exercising powers beyond the notice issued with a view to starting fishing and roving enquiries in the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conclusion, the very initiation of proceedings by him will be illegal and without jurisdiction. The Commissioner cannot initiate proceedings with a view to starting fishing and roving enquiries in matters or orders which are already concluded. Such action will be against the well accepted policy of law that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasijudicial controversies as it must in other spheres of human activity. (Parashuram Pottery Works Co. Ltd. v. ITO [1977) 106 ITR 1 (SC) at page 10). 14. From the provisions of section 263(1) it is clear that an order cannot be termed as erroneous unless it is not in accordance with law. If an Income-tax officer acting in accordance with law makes a certain assessment, the same cannot be branded as 'erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately. This section does not visualise a case of substitution of the judgment of the Commissioner for that of the Income-tax Officer, who passed the order unless th ..... 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