TMI Blog2017 (9) TMI 1655X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 263 to the extent directing the A.O to further examine the claim of the assessee in respect of initial depreciation on the addition of fixed assets of ₹ 17,60,00,000/- made during the year, without affording any opportunity to the assessee to put forth an explanation as regards the same, cannot be sustained. - I.T.A. No(s).2370/Mum/2017, I.T.A. No(s).2371 -2372/Mum/2017 , I.T.A. No(s)2373/Mum/2017 - - - Dated:- 27-9-2017 - SHRI G.S. PANNU, AM AND SHRI RAVISH SOOD, JM Appellant by : Shri. A. K. Ghosh, A.R Respondent by : Mrs. Vidisha Kalra, D.R ORDER Ravish Sood, Judicial Member The present appeals filed by the abovementioned assesses are directed against the order passed by the Principal Commissioner of Income tax, Central-2, Mumbai under Sec. 263 of the Income tax 1961, (for short 'Act') for A.Y 2007-08, dated. 24.03.2017, which in itself arises from the assessment order passed by the Dy. Commissioner of Income tax, Central Circle-3(1), Mumbai u/s. 153A r.w.s. 143(3) of the 'Act', dated 27.03.2015, in the case of Wind World India Infrastructure Pvt. Ltd., Mumbai, which had been assailed before us as I.T.A. No(s).2370/Mum/2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the foregoing grounds of appeal. The appellant prays this Hon'ble Tribunal to quash the impugned order passed by the Ld. Principal CIT by invoking the provisions of section 263 of the Income Tax Act, 1961 . 2. Briefly stated, the facts of the case are that the assessee company is engaged in the business of setting of Infrastructure facilities for evacuation of power generator through power projects. Search and seizure action u/s. 132 of the 'Act' was carried out on 14.03.2013 at the premises of M/s. Enercon India Ltd. (EIL) and its groups companies. The assessee company being one of the group company of M/s. Enercon India Ltd. [now known as M/s. Wind World (India) Ltd.] was covered in the aforesaid search proceedings. 3. The assessee had filed its 'return of income' for A.Y. 2007-08 on 31.10.2007, declaring a loss of ₹ 9,53,44,278/-. That subsequent to the aforesaid search and seizure proceedings the assessee filed its 'return of income' u/s 153A of the 'Act' on 27.02.2014, declaring a loss of ₹ 9,53,44,278/-. That during the course of the assessment proceedings it was observed by the A.O that the assessee had not shown ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - should have been taken by the A.O as Nil. The Principal CIT further observed that though the assessee had claimed depreciation of ₹ 7,14,98,291/- in respect of 'fixed assets' addition of ₹ 75,69,32,795/- during the year, however, the A.O had neither made any verification, nor called for the certificate of installation/commissioning of the said assets for verifying the entitlement of the assessee as regards the allowability of deprecation in its hands. The Principal CIT on the basis of his aforesaid observations concluded that as the A.O had failed to examine the issues and carry out necessary verifications, therefore, the assessment order passed u/s. 143(3) r.w.s. 153A, dated 27.03.2015 was rendered as erroneous and prejudicial to the interest of the revenue. The Principal CIT thus in the backdrop of his aforesaid conviction initiated proceedings u/s. 263 and issued a 'Show cause' notice ('SCN'), dated 02.03.2017 to the assessee. 6. That during the course of the revision proceedings the assessee submitted before the Principal CIT that as it had installed the Plant and machinery during the year under consideration, therefore, it had rightly c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Pratibha Industries Ltd. (supra) relied upon by the assessee had also not been accepted by the department, and the matter was sub judice before the Hon'ble High Court. The Principal CIT thus characterising the order passed by the A.O u/s. 143(3) r.w.s. 153A as erroneous and prejudicial to the interest of the revenue, therefore, set aside the assessment order to the file of the A.O, with a direction to examine the issue afresh and complete the assessment, as per law. 8. The assessee being aggrieved with the order passed by the Principal CIT u/s. 263 of the 'Act', had carried the matter in appeal before us. That during the course of hearing of the appeal it was submitted by the ld. Authorised Representative (for short 'A.R') for the assessee that the issue on the basis of which revisional jurisdiction had been exercised by the Principal CIT under Sec. 263 was at length deliberated upon by the A.O during the course of the assessment proceedings. It was thus averred by the ld. A.R that now when the A.O while framing the assessment had arrived at a plausible view in respect of the issue under consideration, therefore, the Principal CIT was divested of his jur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct (ITA No. 36 of 2009) (Bom) (ii) CIT Vs. All Cargo Global Logistics Ltd. 374 ITR 645 (Bom) (iii) All Cargo Global Logistics Ltd. Vs. DCIT (2012) 137 ITD 287 (SB) (Mum). (iv) ACIT Vs. Pratibha Industries Ltd. (2013) 141 ITD 151 (Mum). It was further averred by the Ld. A.R that during the course of the assessment proceedings it was submitted before the A.O that in the absence of any incriminating material found during the course of the Search seizure proceedings conducted u/s 132(1), no addition/disallowance was permissible in respect of the unabated assessment of the assessee for the year under consideration. The ld. A.R submitted that the A.O after deliberating upon the said contention of the assessee, in the backdrop of the order of the 'Special Bench' of the Tribunal in the case of All Cargo Global Logistics Ltd. (supra) and the order of the ITAT, Mumbai in the case of Pratibha Industries Ltd. (supra), as were available at the time of the assessment proceedings, had accepted the same and did make not any addition/disallowance in the hands of the assessee. The ld. A.R drew our attention to the reply filed by the assessee with the A.O on 27.03.2015, wherein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eizure proceedings conducted on the assessee, therefore, no mistake could be related to the assessment framed by the A.O, who being guided by the aforesaid binding order of the 'Special bench' of the Tribunal, had thus refrained from making any disallowance/addition in respect of the unabated assessment of the assessee for the year under consideration. 9. Per contra, the ld. Departmental Representative (for short 'D.R') though did not controvert the fact that no incriminating material was found during the course of the Search seizure proceedings conducted u/s 132(1) on the assessee, but however, vehemently submitted that as the framing of the assessment u/s. 153A r.w.s. 143(3) in the hands of the assessee was merely preceded by an intimation u/s. 143(1), therefore, the facts of the case were distinguishable as against those which were involved in the aforementioned cases before the Hon'ble High Court and the Tribunal. It was thus the contention of the ld. D.R that as in the case of the assessee no order u/s. 143(3) for the year under consideration was passed prior to the date on which Search seizure proceedings were initiated against the assessee u/s 132( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. A.R submitted that in a case which prior to the date of initiation of the Search seizure proceedings conducted u/s 132(1) is witnessed only by a mere processing of the 'return of income' u/s 143(1), is brought within the gamut of 'Other cases', then in the backdrop of the fact that there would be no basis for characterising the 'books of accounts' and 'documents' found during the course of search seizure proceedings in such a case as an 'incriminating material', would thus lead to incongruous results. The ld. D.R thus on the basis of her aforesaid contentions submitted that as in the case of the present assessee there was no concluded assessment or reassessment for the year under consideration prior to the date of the initiation of the Search seizure proceedings, but only an intimation u/s 143(1) existed, therefore, unlike a case where a concluded assessment or reassessment for the year under consideration was available as on the date of initiation of the Search seizure proceedings u/s 132(1), the processing of the 'return of income' u/s 143(1) could not be characterized as an unabated assessment. It was thus submitted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents or any assets are requisitioned under section 132A after the 31st day of May, 2003, the Assessing Officer shall- (a) Issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years [and for the relevant assessment year or years] referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be apply accordingly as if such return were a return required to be furnished under section 139; (b) Assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made [and for the relevant assessment year or years]: Provided that the Assessing Officer shall asses or reassess the total income in respect of each assessment year falling within such six assessment years : Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e under Sec. 153A(1) is annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) of Sec.153A or Section 153, the assessment or reassessment relating to any such assessment year which had abated under the second proviso of Sec. 153A, shall stand revived with effect from the date of receipt of the order of such annulment by the Principal Commissioner or Commissioner. Thus, a consideration of the aforesaid statutory provision reveals that the legislature in all its wisdom has provided that it is only where the assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in Section 153A is pending on the date of initiation of the search u/s. 132, the same shall stand abated. The only inescapable view as can be gathered from a perusal of the aforesaid statutory provision is that except for assessment or reassessment which is pending on the date of initiation of the search seizure proceedings u/s 132(1), in no other case the abatement shall take place. Thus, logically the sole plausible inference which can be drawn is that in a case where neither any assessment or r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zure action is preceded by a processing of the 'return of income' u/s 143(1), despite absence of any pending assessment or reassessment proceedings is to be construed as abated, and the entire assessment in the case of the assessee is thrown upon before the A.O in the course of assessment proceedings u/s 153A, is accepted, then it is beyond our comprehension that how in case of annulment of the assessment framed u/s 153A, the processing of the 'return of income' u/s 143(1) can by any means lead to revival of any assessment or reassessment as contemplated u/s 153A(2). We had consciously, purposively and intentionally referred to Sec. 153A(2), in order to fortify our view that what stands abated on the initiation of Search seizure proceedings u/s. 132(1) is only an assessment or reassessment pending on the date of search seizure proceedings, which on annulment of the assessment framed u/s 153A(1), on an appeal or in the course of any legal proceedings, shall stand revived, without being fettered by the time limitation for framing of such assessment or reassessment, as provided in Sec. 153(1). We find that as processing of a 'return of income' u/s 143(1) do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tful consideration to the issue before us, and in the backdrop of our aforesaid observations are persuaded to observe that the A.O after deliberating upon the contention of the assessee that as on the date on which the Search seizure proceedings under Sec. 132 were conducted on it, viz. 14.03.2013, no assessment or reassessment proceedings for the year under consideration i.e. A.Y. 2007-08 were pending, therefore, in the absence of any incriminating material found during the course of the Search seizure proceedings, no addition in respect of the unabated assessment for the year under consideration could be made in the hands of the assessee company, had thus in the backdrop of the order of the 'Special Bench' of the Tribunal in the case of All Cargo Global Logistics Ltd. (supra) and the order of the ITAT, Mumbai in the case of Pratibha Industries Ltd. (supra), as were available at the time of the assessment proceedings and were specifically relied upon by the assessee before him, rightly refrained from making any addition in the hands of the assessee. We find that as observed by us hereinabove, the aforesaid view of the Tribunal that in case of an unabated assessment no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 143(3) r.w.s 153A is erroneous and prejudicial to the interest of the revenue. 3. on the facts and in the circumstances of the appellant's case and in law the Ld. Principal CIT erred to hold that the addition to fixed assets call for further examination despite the fact that this issue was not raised in the show cause notice. 4. The Ld. Principal CIT failed to appreciate that as on the date of search, the assessment or reassessment for the assessment year under consideration was not pending and no addition/disallowance is permissible in respect of such unabated assessment year in the absence of any incriminating material found during the course of search. 5. The appellant craves leave to add to, alter, amend and /or delete all or any of the foregoing grounds of appeal. The appellant prays this Hon'ble Tribunal to quash the impugned order passed by the Ld. Principal CIT by invoking the provisions of section 263 of the Income Tax Act, 1961. 18. Briefly stated, the facts of the case are that the assessee company is engaged in the business of purchase and sale of Development rights required for generation of power by wind farms and generation of power. Search an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thing, but however, where such plant and machinery were not used in manufacturing or production of any article or thing, the assessee would not qualify for additional depreciation. It was further observed by the Principal CIT that Sec. 36(1)(iia) was amended by the Finance Act, 2012 to allow the additional depreciation to the assesses who were engaged in the business of generation or generation and distribution of power w.e.f. April,2013, i.e. from A.Y. 2013-14. The Principal CIT on the basis of his aforesaid conviction, observed that the additional depreciation was not allowable to the assesses who were engaged in the business of generation or generation and distribution of power prior to A.Y. 2013-14. The Principal CIT on the basis of his aforesaid observations concluded that the assessee was not eligible for additional depreciation on Wind Turbine Generator during the year under consideration, viz. A.Y. 2011-12. 21. The Principal CIT thus held a view that the A.O while framing the assessment u/s 143(3) r.w.s. 153A, dated 30.03.2015, had wrongly allowed the additional depreciation of ₹ 1,74,56,805/- to the assessee. The Principal CIT holding a conviction that the allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchased and installed for generation of electricity, therein relied on a host of judicial pronouncements. The Principal CIT after deliberating on the contentions of the assessee, however, did not find favour with the same and holding a conviction that now when the allowability of additional depreciation to the assesses engaged in the business of generation or generation and distribution of power had been brought within the sweep of Sec. 32(1)(iia), vide the Finance Act, 2012, w.e.f. 1st April, 2013, i.e. from A.Y. 2013-14, therefore, the assessee was not eligible for additional depreciation on wind turbine generators during the year under consideration, viz. A.Y. 2011-12. The Principal CIT thus being of the view the A.O had failed to look into the claim of depreciation properly while framing the assessment, specifically the impact of amendment of Sec. 32(1)(iia) vide the Finance Act, 2012, w.e.f 01.04.2013, i.e. A.Y. 2013-14, nor had called for any explanation of the assessee on the issue of allowability of additional depreciation, therefore, held that the assessment order passed u/s 143(3) r.w.s. 153A was erroneous and prejudicial to the interest of the revenue. The Principal C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or short 'D.R') relied on the order passed by the Principal CIT under Section 263 of the 'Act'. It was submitted by the Ld. D.R that as the business of generation or generation and distribution of power had been brought within the sweep of Sec. 32(1)(iia), vide the 'Finance Act, 2012' w.e.f. 01.04.2013, therefore, the assessee would not be entitled to claim the additional depreciation during the year under consideration, viz. AY. 2011-12. It was submitted by the Ld. D.R that as the A.O had gravely erred in law by summarily accepting the wrong claim of the assessee towards additional depreciation u/s 32(1)(iia) and consequently allowed excess depreciation of ₹ 1,74,56,802/-, therefore, the Principal CIT duly appreciating that the order passed by the A.O was erroneous and prejudicial to the interest of the revenue, had thus rightly revised the order in exercise of the powers vested with him u/s 263 of the 'Act'. 24. We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record. We have given a thoughtful consideration to the facts of the case and find that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /57 taxmann.com 285 (Mad.), in an appeal filed by the revenue against the order dated 26.06.2014 passed by the Tribunal in ITA No. 154 and 155/Mds/2014 for the A.Y(s). 2005-06 and 2006-07, the following substantial question of law was raised: Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the generation of electricity by wind mill amounts to production of an article or thing and consequently holding that the assessee is entitled for additional depreciation as per Section 32(1)(iia)? The Hon'ble High Court after deliberating on the facts involved in the case before it, observed as under: '2. The brief facts of the case in a nutshell are as follows: The assessee is a partnership firm engaged in the business of textiles and generation and distribution of power. The assessee filed return of income claiming additional depreciation on windmill. The Assessing Officer disallowed the assessee's claim of additional depreciation on windmill under Section 32(1)(iia) of the Income Tax Act holding that the assessee failed to satisfy one of the condition, namely, the assessee should be engaged in the business of manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel for the appellant on the ground that the order of the Commissioner of Income-tax (Appeals) as confirmed by the Tribunal should be interfered with. It cannot also be said that setting up of a wind mill will not fall within the expression setting up of a new machinery or plant. We do not find any error in the conclusion of the Tribunal in confirming the order of the Commissioner of Income-tax (Appeals). We, therefore, do not find any question of law much less substantial question of law to entertain these appeals. These appeals fail and the same are dismissed. Consequently, M.P. No. 1 of 2009 is also dismissed. 6. The facts in the present case are no different from the above-said decision. In the present case, the core business of the assessee is manufacturing and export of textile goods. During the assessment year 2006-07, the assessee had entered into the business of generation of power and installed one wind mill. The assessee maintained separate books of accounts for export division and the wind mill division. Since the assessee has treated the windmill division as separate business, the claim of additional depreciation has to be seen in the context of generation of power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er find that a coordinate bench of the ITAT, Mumbai vide its order dated 09.10.2015 in the case of ACIT v. Delta Enterprises (IT Appeal No. 944 (Mum) of 2012 for A.Y. 2007-08 had dismissed the appeal of the revenue by finding itself as being in agreement with the view taken by the CIT (A) that production of electricity by harnessing wind energy did tantamount to manufacturing or production of an article or thing. The Tribunal while adjudicating the aforesaid issue though observed that the business of generation or generation and distribution of power was added in Sec. 32(1)(iia) only w.e.f. 01.04.2013, however, the same would not have any material bearing on the entitlement of the assessee towards claim of additional depreciation prior to 01.04.2013. The Tribunal while so concluding had relied on the order passed by the coordinate bench of the Tribunal in the case of Asstt. CIT v. M. Satish Kumar [2013] 33 taxmann.com 396 (Chennai - Trib.), wherein too the Tribunal after considering the amendment made by the Finance Act, 2012, had concluded that the assessee was entitled towards claim of additional depreciation, by observing as under: 9. We have heard the submissions made by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2014 dated 19.12.2014 for A.Y. 2006-07. The relevant portion of the judgment is reproduced below : 6. The Hon'ble Madras High Court in the case of CIT v. Hi Tech Arai Ltd. (Supra) has held that where the assessee has set up windmill in addition to some other existing business, and is engaged in the generation of electricity, the assessee is entitled to claim additional depreciation on the same. 7. We find that the issue in appeal is squarely covered in favour of the assessee by the aforesaid decisions of the Hon'ble Madras High Court and the co-ordinate Bench of the Tribunal. We do not find any infirmity in the impugned order. 8.4 Therefore, keeping in view the aforesaid facts and circumstances of the case and clear position of law, we find that the claim made by the assessee on account of additional depreciation is allowable, no interference is called for in the order of CIT (A), and therefore same is upheld. The AO is directed to allow additional depreciation u/s 32(1)(iia) of the Act. All the grounds raised by Revenue are dismissed.' 26. We have given a thoughtful consideration to the issue before us and are of the considered view that production of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds any doubts on the part of the Principal CIT in respect of the veracity of the claim of depreciation on the fixed assets of ₹ 13,09,26,042/- and 4,36,42,014/- as were claimed by the assessee to have been put to use on 26.03.2011 and 30.03.2011, respectively, however, the Principal CIT had in his order passed u/s 263 traversed beyond the 'Show cause' notice and had also directed the A.O to call for and examine the claim raised by the assessee as regards the initial depreciation in respect of the aforesaid addition made by the assessee to the fixed assets . It was averred by the Ld. A.R. that the Principal CIT without putting the assessee to notice in respect of the aforesaid issue, had thus exceeded his jurisdiction and directed the A.O to verify the claim of the assessee in respect of the initial depreciation on the additions to the abovementioned fixed assets. Per contra, the Ld. D.R. relied on the order passed by the Principal CIT and submitted that the latter had rightly revised the order passed by the A.O under Sec. 153A r.w.s. 143(3) of the 'Act'. 28. We have given a thoughtful consideration to the facts of the case and after perusing the show cause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'Written Submissions', dated. 28.07.2017, placed on our record, had stated as under: Therefore, it is fact that in none of the cases order u/s 143(3) was passed on or before 14.03.2013 (dt. of search) for the assessment years involved . Apart from M/s J N Investment, in none of the cases notice u/s 143(2) was issued, therefore, in none of the 3 cases at S. No. 1, 2 3 of the chart above, assessment proceedings were pending on the date of search. Only in the J N Investments the assessment got abated for A.Y. 2012-13 on the date of search for which Notice u/s 143(2) was issued. ,however, the fact as it so remains is that the assessee had for the very first time in the 'Ground of appeal no. 4' raised the contention that no assessment or reassessment in its case for the year under consideration, viz. A.Y. 2011-12 was pending on the date on which search and seizure proceedings were initiated u/s 132(1), i.e. 14.03.2013, therefore, no addition/disallowance was permissible in respect of such unabated assessment year in the absence of any incriminating material found during the course of search and seizure proceedings. We are of the considered view that though the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ejudicial to the interest of the revenue. 3. The appellant craves leave to add to, alter, amend and /or delete all or any of the foregoing grounds of appeal. The appellant prays this Hon'ble Tribunal to quash the impugned order passed by the Ld. Principal CIT by invoking the provisions of section 263 of the Income Tax Act, 1961. 34. Briefly stated, the facts of the case are that the assessee company in compliance to notice u/s 153A had filed its 'return of income' on 24.03.2015, declaring the income of Rs. Nil under the normal provisions and 'Book profit' of ₹ 17,81,67,919/- u/s 115JB as per the MAT provisions. The assessment in the case of the assessee was framed by the A.O vide order dated 30.03.2015 passed u/s 153A r.w.s. 143(3) of the 'Act', assessing the total income as declared in the return of income filed by the assessee. 35. The Principal Commissioner of Income tax, Central-2, Mumbai deliberated on the assessment records of the assessee for the year under consideration, viz. A.Y. 2012-13, and observed that the A.O had allowed total depreciation of ₹ 48,76,67,650/- (including additional depreciation of ₹ 8,35,66,91 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e been put to use on 03.10.2011 and 31.03.2011, respectively, therefore, the A.O had failed to make necessary enquiries and verification in respect of the claim of depreciation of the assessee. The Principal CIT holding a conviction that the A.O had wrongly allowed additional depreciation of ₹ 8,35,66,916/- on the Wind Energy Converters while framing the assessment u/s 143(3) r.w.s. 153A, the same had thus rendered the order passed by him as erroneous and prejudicial to the interest of the revenue, therefore, invoked his revision jurisdiction u/s 263 of the 'Act'. 37. The Principal CIT vide his notice u/s 263 of the 'Act' called upon the assessee to show cause as to why the assessment framed u/s 153A r.w.s. 143(3) may not be revised in order to withdraw the additional depreciation of ₹ 8,35,66,916/-, which as per him was wrongly allowed by the A.O while framing the aforesaid assessment, as well as explain as to how to admissibility of 100% depreciation in respect of addition made to the fixed assets in the second half and put to use subsequently may not be held to be incorrect. The assessee in his reply, taking support of various judicial pronouncem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the A.O had failed to look into the claim of depreciation and additional depreciation properly while framing the assessment, specifically in the backdrop of the impact of amendment of Sec. 32(1)(iia) which was vide the Finance Act, 2012, w.e.f. 01.04.2013, i.e. AY. 2013-14, nor had called for any explanation of the assessee on the issue of allowability of initial depreciation, therefore, held that the assessment order passed u/s 143(3) r.w.s. 153A was rendered as erroneous and prejudicial to the interest of the revenue. The Principal CIT while concluding as hereinabove, therein also took support of the Explanation 2 of Sec. 263 of the 'Act'. The Principal CIT on the basis of his aforesaid observations set aside the assessment order to the file of the A.O, with the direction to examine the claim of the assessee towards additional depreciation and initial depreciation afresh and complete the assessment as per law. 38. The assessee being aggrieved with the order passed by the Principal CIT under Section 263, had carried the matter in appeal before us. We find that the sole issue involved in the present appeal boils down to the entitlement of the assessee which is engaged in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and in the circumstances of the appellant's case and in law the Ld. Principal CIT erred in passing the impugned order by invoking the provisions of section 263 of the Act, which is illegal, bad-in-law or otherwise void for want of jurisdiction. 2. on the facts and in the circumstances of the appellant's case and in law the Ld. Principal CIT erred to hold that the assessment order passed by the A.O u/s. 143(3) r.w.s 153A is erroneous and prejudicial to the interest of the revenue. 3. on the facts and in the circumstances of the appellant's case and in law the Ld. Principal CIT erred to hold that the addition to fixed assets call for further examination despite the fact that this issue was not raised in the show cause notice. 4. The Ld. Principal CIT failed to appreciate that as on the date of search, the assessment or reassessment for the assessment year under consideration was not pending and no addition/disallowance is permissible in respect of such unabated assessment year in the absence of any incriminating material found during the course of search. 5. The appellant craves leave to add to, alter, amend and/or delete all or any of the foregoing grounds of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribution of power w.e.f. April, 2013, i.e. from A.Y. 2013-14. The Principal CIT on the basis of his aforesaid conviction therein observed that the additional depreciation was not allowable to the assesses who were engaged in the business of generation or generation and distribution of power prior to A.Y. 2013-14. The Principal CIT on the basis of his aforesaid observations thus concluded that the assessee was not eligible for additional depreciation on Wind Turbine Generator during the year under consideration, viz. A.Y. 2011-12. 43. The Principal CIT thus being of the view that the A.O while framing the assessment u/s 143(3) r.w.s. 153A, dated 24.03.2015, loosing sight of the fact that the assessee had made addition of Wind Energy Converters of ₹ 17,60,29,601/- which were claimed to have been put to use on or before 30.09.2011, which was more than 180 days during the year, therefore, the A.O had failed to make necessary enquiries and verification in respect of the claim of depreciation of the assessee. The Principal CIT further holding a conviction that the A.O had wrongly allowed additional depreciation of ₹ 3,52,00,000/- on the Wind Turbine Generator while f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n a host of judicial pronouncements. The Principal CIT after deliberating on the contentions of the assessee, however, did not find favour with the same and holding a conviction that now when the allowability of additional depreciation to the assessee engaged in the business of generation or generation and distribution of power had been brought with the sweep of Sec. 32(1)(iia) vide the Finance Act, 2012, w.e.f. 1st April, 2013, i.e. from AY. 2013-14, therefore, the assessee could not be held to be eligible for claim additional depreciation on Wind Turbine Generator during the year under consideration. The Principal CIT thus being of the view the A.O had failed to look into the claim of depreciation and additional depreciation properly while framing the assessment, specifically in the backdrop of the impact of amendment of Sec. 32(1)(iia), which was made available on the statute w.e.f. 01.04.2003, i.e. from A.Y. 2013- 14, nor had called for any explanation of the assessee on the issue of allowability of additional depreciation, therefore, held that the assessment order passed u/s 143(3) r.w.s. 153A was erroneous and prejudicial to the interest of the revenue. The Principal CIT wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TA No. 2371/Mum/2017. The Ground of Appeal No. 1 2 raised by the assessee before us are allowed. 46. The assessee had further assailed before us the order passed by the Principal CIT on the ground that though the assessee was never put to notice as regards any doubts on the part of the Principal CIT as regards the veracity of the claim of depreciation on the fixed assets of ₹ 17,60,00,000/-, which were claimed by the assessee to have been put to use before 30.09.2011, however, the Principal CIT had in his order passed u/s 263 traversed beyond the 'Show cause' notice, and had also directed the A.O to call for and examine the claim of the assessee as regards the initial depreciation raised in respect of the aforesaid addition to the fixed assets . It was averred by the Ld. A.R. that the Principal CIT without putting the assessee to notice in respect of the aforesaid issue, had thus exceeded his jurisdiction and directed the A.O to verify the claim of the assessee in respect of the initial depreciation on the additions to the abovementioned fixed assets. Per contra, the Ld. D.R. relied on the order passed by the Principal CIT and submitted that the latter had right ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h and seizure proceedings. 49. We find that the ld. D.R vide her consolidate 'Written Submissions', dated. 28.07.2017, placed on our record, had stated as under: Therefore, it is fact that in none of the cases order u/s 143(3) was passed on or before 14.03.2013 (dt. of search) for the assessment years involved. Apart from M/s J N Investment, in none of the cases notice u/s 143(2) was issued, therefore, in none of the 3 cases at S. No. 1, 2 3 of the chart above, assessment proceedings were pending on the date of search. Only in the J N Investments the assessment got abated for A.Y. 2012-13 on the date of search for which Notice u/s 143(2) was issued. The ld. A.R had not able to dislodge the contention of the revenue that on the date on which Search seizure proceedings were conducted in the hands of the assessee a Notice under Sec. 143(2) stood issued and the proceedings emerging therefrom were pending adjudication before the A.O. We thus, in the backdrop of the proceedings u/s 143(2) which were pending in the case of the assessee on the date of Search seizure proceedings, viz. A.Y. 2003-03, are of the considered view that the assessment proceedings in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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