TMI Blog2022 (8) TMI 442X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Commissioner of Income-tax. Therefore the Commissioner of Income-tax invoked the powers under section 263 within the permissible limits of Jaw. He has not exceeded jurisdiction. Assessing authority has adopted the net profit for further giving deduction by way of depreciation, which was already modified by the depreciation allowance as provided under the Companies Act. Therefore, the excess amount of depreciation allowance has been granted to the assessee. Likewise, the division of depreciation allowance also has not been done while computing the benefit available to the assessee under section 10B of the Act. This also has resulted in excessive benefit to the assessee. We, therefore, find that the order passed by the assessing authority is erroneous as well as prejudicial to the interests of the Revenue. In these circumstances, the revision order passed by the Commissioner of Income-tax for the assessment year 2002-03 is in accordance with law and his order is upheld. The assessee fails in its appeal for the assessment year 2002-03. Thus, it is already held that the order of CIT is proper and also the adding back of book depreciation is justified, otherwise asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7.03.2015 31.03.2015 relevant to the assessment years 2002-03 and 2003-04 respectively. Both the appeals filed by the assessee are delayed by four days and one day for the assessment years 2002-03 and 2003-04 respectively in filing the appeal before the Tribunal. The assessee filed petitions for condonation of delay in filing the appeals by stating that the delay was neither willful not wanton and pleaded for condoning the delay, against which, the Ld. DR has not raised any serious objection. Since the assessee was prevented by reasonable cause, the delays in filing the appeals before the Tribunal are condoned and admitted the appeals for adjudication. 3. When the appeal for the assessment year 2002-03 was taken up for hearing, the Ld. DR has submitted that the present appeal before the Tribunal relates to giving effect order passed by the Assessing Officer consequent to the revision order passed under section 263 of the Act by the Ld. CIT and since the 263 order was already upheld by the Tribunal, the present appeal filed by the assessee is liable to be dismissed. 4. On the other hand, the Ld. Counsel for the assessee has relied on the grounds of appeal. 5. We have h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd facts involved. (b) The Assessing Officer has no jurisdiction to pass the order under Sec. 143(3) read with Sec. 263 of the Income Tax Act in so far as the order under sec. 263, in consequence of which the impugned assessment order has been passed, is itself illegal, invalid and barred by jurisdiction. The consequential assessment order dated 15.12.2011 thus has no basis. (c) The Assessing Officer erred in not awaiting the order of the Income Tax Appellate Tribunal quashing the order under Sec. 263 of the Income Tax Act, dated 24.3.2011. The assessment has been completed in haste and arbitrarily. (d) The Assessing Officer Authority ought to have noted that in so far as the order of the Commissioner of Income Tax pursuant to which the impugned order has been passed is barred by limitation in view of the judgment of the Hon'ble Supreme Court in the case of CIT Vs. Alagendran Finance Ltd. (293 ITR 1), the present impugned order has no basis. (e) The Assessing Authority erred in proceeding pursuant to an invalid order in so far as the order u/s. 263 passed by the Commissioner of Income Tax has been passed in contravention of the ingredients of Sec. 263. The p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ITAT observed: 7. Regarding the merits, it is quite evident that the assessing authority has adopted the net profit for further giving deduction by way of depreciation, which was already modified by the depreciation allowance as provided under the Companies Act. Therefore, the excess amount of depreciation allowance has been granted to the assessee. Likewise, the division of depreciation allowance also has not been done while computing the benefit available to the assessee under section 10B of the Act. This also has resulted in excessive benefit to the assessee. We, therefore, find that the order passed by the assessing authority is erroneous as well as prejudicial to the interests of the Revenue. 8. In these circumstances, the revision order passed by the Commissioner of Income-tax for the assessment year 2002-03 is in accordance with law and his order is upheld. The assessee fails in its appeal for the assessment year 2002-03. 6. Thus, it is already held that the order of CIT is proper and also the adding back of book depreciation is justified, otherwise assessee will get double benefit. It is an obvious mistake committed by the AO that while allowing d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... natively, it was submitted that there was application of money and therefore, it has to be allowed and relied upon the decision in the case of CIT v. PVP Ventures Limited (2012) 211 Taxman 554 (Mad) as well as Tribunal's order in I.T.A. No. 304/Mds/2013 for the assessment year 2009-10 vide order dated 15.10.2013 in the case of ACIT v. M/s. Murugappa Management Services Ltd. 9. On the other hand, the Ld. DR has submitted that the loan was taken by the M/s. PSEF and not by the assessee and therefore, it is not for the purpose of business of the assessee and it cannot be allowed. 10. We have heard both the sides, perused the materials available on record and gone through the orders of authorities below including case law relied upon. In this case, the assessee has created M/s. Pentafour Software Employees Foundation (PSEF) for the purpose of allotment of shares to the employees and M/s. PSEF obtained loan from the Global Trust Bank and the same was deposited with the assessee as share application deposits for the purpose of utilizing the said deposit amount for allotment of shares to the employees from time to time. However, the assessee has not allotted any shares to the em ..... X X X X Extracts X X X X X X X X Extracts X X X X
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