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TMI Blog2020 (4) TMI 662X X X X Extracts X X X X X X X X Extracts X X X X ..... has erred in law and in fact by initiating the proceedings under section 263 of the Act, without appreciating the fact that the proceedings under section 263 of the Act can be initiated, if and only if, the order passed by the Assessing Officer ('AO') is erroneous and prejudicial to the interest of the Revenue. 2. The learned PCIT has erred in law and in fact by initiating the proceedings under section 263 of the Act, without appreciating the fact that the AO has already applied his mind on allowability of depreciation to Appellant on finance lease arrangement & adopted a particular view, rendering the proceedings under section 263 being bad in law. 3. The learned PCIT has erred in law and in fact by not considering the submissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thout ascertaining whether the assessee could be considered to be the owner of the assets as is required in section 32 of the IT Act, 1961. He pointed out that in the present year also, as per the impugned order passed by learned PCIT under section 263, the allegation is same as can be noted in para No.6 of the impugned order that the Assessment Order has been passed by the AO without any enquiry with regard to allowability of depreciation in the hands of the assessee and without ascertaining whether the assessee can be considered to be the owner of the assets as is required under section 32 of the IT Act, 1961. He also submitted that notice issued by the AO under section 142 of the IT Act, 1961 in the course of assessment proceedings is av ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of being heard to the assessee." 5. Now we reproduce para No.3 from the Tribunal order in assessee's own case for Assessment Year 2008-09 available on pages 249 and 250 of the Paper Book wherein it is noted by the Tribunal that in that year also, show cause notice under section 263 of the IT Act, 1961 was issued by PCIT for that year calling upon the assessee to explain as to why the Assessment Order passed by the AO under section 143(3) of the IT Act, 1961 shall not be revised and the ground given by the PCIT in that year was the same that the Assessment Order is erroneous in so far as it is prejudicial to the interest of the Revenue on account of wrong claim of depreciation on leased assets and it was further stated by the PCIT in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilable on pages 178 to 193 of the appeal memo and this is very much noted by the AO in para 4 of the Assessment Order that the assessee had claimed depreciation of Rs. 13.31 Crores under the Companies Act, whereas depreciation claimed under the IT Act was at Rs. 135.77 Crores and the said difference was noted by the AO with regard to 3 reasons and in those reasons of differences noted by the AO, it is noted by the AO that on account of substantial part of the lease transactions conducted by the assessee being claimed as finance lease on which the lessee is claiming depreciation under the Companies Act instead of lessor claiming the depreciation. Hence, it is seen that this fact was very much in the order of assessment that the assessee is c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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