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TMI Blog2019 (2) TMI 637X X X X Extracts X X X X X X X X Extracts X X X X ..... raised the following grounds of appeal:- "1. On the facts and in the circumstances of the case, the ld CIT(A) erred:- (i) in holding that the reassessment proceedings u/s 147 as legally not valid ignoring the legal aspect that the assessee's case is covered by the clause (b) of explanation 2 of the Section 147 of the Act, 1961 and the case is totally distinguishable from the facts of the cases relied upon by the assessee before the ld CIT(A). (ii) in deleting the addition of Rs. 53926125/- made on account of disallowance of deprecation because depreciation claimed was in excess of share of assets held by the assessee." 3. The brief facts of the case shows that the assessee filed its return of income declaring loss of Rs. 26,23,90, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve reasons to believe (hat income on account of allowance of excess depredation u/s 32 of the of the IT Act, 1961 to the time of of Rs. 1248.49 lacs chargeable to tax has escaped assessment within the meaning of sec. 147 of the IT Act, 1961 and accordingly notice u/s 148 of the IT Act 1961 is to be issued." 4. Notice u/s 148 of the Act was issued and the assessee submitted that original return was filed u/s 139(1) on 29-10-2018, may be treated as return filed in response to the notice. Ld ld AO thereafter made an addition of Rs. 53926125/- on account of disallowances of depreciation vide paragraph No. 3 to 4 of the assessment order as under:- "3. Vide order sheet entry dated 07-09-2009, the AR of the assessee company was asked to show c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th material evidences, inspite off repeated opportunities. In the absence of evidence, it cannot be held that depreciation was claimed only on the assets which was stated to have been capitalized on pro-rata basis. Accordingly, an amount of Rs. 5,39,26,125/- (12.5% of 43,14,09,000 as assets used for less than 180 days in depreciation chart) being the amount of depreciation on the cost of asset capitalized of Rs. 43,14,09,000 by M/s Bharti Mobile Ltd. is withdrawn and accordingly added to the income of the assessee." 5. Consequently the order u/s 147 read with section 143(3) of the Act dated 7-12- 2009 was passed, wherein, depreciation of Rs. 53926125/- was disallowed and loss was assessed at Rs. 208463877/-. 6. Aggrieved the assessee pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee has 54.13% share and Bharti Mobile had 45.87% share and both of them has correctly claimed depreciation of assets owned by them only. 10. We have carefully considered the rival contentions and also perused the orders of the lower authorities. The ld CIT(A) has held as under:- "4. I have considered the submission made by the appellant and also perused the reassessment order passed by the Assessing Officer. the issue under consideration is whether the assessing office was justified in invoking jurisdiction u/s 147 of the Act for making reassessment of the appellant. It is noticed that in the facts of this case, the appellant had filed the audited balance sheet and tax audit report along with computation of income which clearly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6125/- made on account of disallowance of depreciation deleted by the ld CIT(A). The fact leading to the above disallowance states that assessee company has capitalized a sum of Rs. 508621383/- being 54% of assets shared with M/s. Bharti Mobile Ltd out of total project of Rs. 940030383/-. However, the ld Assessing Officer vide para No. 3 and 4 of his order has disallowed the depreciation holding that it is not sure that assessee has claimed depreciation only on the assets of its share. The ld CIT(A) deleted the above addition and therefore, revenue is in appeal. 13. The ld DR supported the order of the ld AO. 14. The ld AR supported the order of the ld CIT(A) and vehemently stated that it has not claimed depreciation on the assets which w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and has claimed the 46% depreciation thereon. From the above, I am satisfied that the appellant has rightly claimed depreciation on only its own share of assets and not on the entire assets as held by the ld Assessing Officer. In view of the above, the disallowance of depreciation of Rs. 5,39,26,125/- is directed to be deleted and Ground No. 2 is allowed." 16. Further, it is apparent that out of the total cost of Rs. 940030383/-, 54.13% amounting to Rs. 508621383/- belongs to the assessee and 45.87% amounting to Rs. 431409000/- belong to Bharti Mobile Ltd. The assessee has claimed depreciation only on Rs. 508621383/- as held by the ld CIT(A) and not on the full amount of Rs. 940030383/-. The ld Departmental Representative also could ..... X X X X Extracts X X X X X X X X Extracts X X X X
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