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TMI Blog2022 (8) TMI 956X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome, which is sine-qua-non for assumption of valid jurisdiction. 1.2 That the CIT(A) erred on facts and in law in not appreciating that entire material facts were disclosed by the appellant during the original assessment proceedings and no new tangible material/ information had come into existence to justify reopening of assessment. 2. That the CIT(A) erred on facts and in law in not holding that assessment order passed by the assessing officer under section 147/143(3) of the Act, being non-speaking, to be bad in law. Without Prejudice 3. That the CIT(A) erred on facts and in law in not deleting the addition of Rs.3,01,05,546 made by the assessing officer on account of additional depreciation claimed by the appellant on plant and machinery. 3.1 That the CIT(A) erred on facts and in law in not adjudicating the issue of addition of additional depreciation holding the same to be academic in nature. 3.2 That the CIT(A) erred on facts and in law in not deleting the aforesaid addition made by the assessing officer on erroneous premise that the said depreciation stood claimed by the appellant in the return of income for assessment year 2006-07. 4. Without prejudice, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal challenge, is reproduced hereunder: "Return declaring total income of Rs.10,76,09,197/- and Rs.41,84,29,628/- under MAT was filed on 28/10/2007. Subsequently, assessment in this case was made u/s 143(3) at a income of Rs.43,95,84,360/- under MAT on 23/11/2009. During the year, perusal of records revealed that the assessee had claimed additional depreciation of Rs.3,01,05,546/- on the addition of plant and machinery of the last year on which depreciation was already claimed in the A.Y. 2006-07. Therefore, an amount of Rs.3,01,05,546/- should be added back to the income of the assessee. Further, it is also noticed that an amount of Rs.36,78,530/- as "Provision for doubtful debts" and Rs.57,81,123/- as "Provision for Retirement benefits were added back while computing the income under normal provision of the Act. But while computing the income under special provisions of the Act. While computing the income under special provisions of the Act, this amount was not added back being an unascertained liability. The same should be added while computing income under special provisions of the Act. On perusal of 3CD report (annexure-15), it is revealed that the assessee has prio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve not been adjusted upward and the book profit reduced due to such provisions were not increased to this extent whereas such provisions are in the nature of unascertained liabilities; (iii) the assessee has only offered Rs.17,33,764/- as against the actual prior period income of Rs.23,49,611/-. 10.2 The assessee filed a detailed objection thereto dated 6th August, 2012 before the Assessing Officer seeking to challenge the reasons so recorded in the light of the judgment of the Hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd. vs. ITO as reported in (2003) 259 ITR 19 (SC). The objections placed before Assessing Officer were adverted. On perusal of the aforesaid objections, we observe that the assessee contended before the Assessing Officer that additional depreciation was claimed on purchase of 'plant and machinery' in the Assessment Year 2006-07 @ 10% instead of 20% eligible to the assessee having regard to the fact that the assets were put to use for less than 180 days. Consequently, the assessee was entitled to remaining additional depreciation in this year and thus correctly claimed in accordance with law and assessed by the Assessing Officer in the original as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of CIT vs. HCL Comnet Systems & Services Ltd., as reported in 305 ITR 409 (SC). The plea of the assessee being the tune of law laid down by the Hon'ble Supreme Court, we find merit in the plea of the assessee. A debt being an asset and not a liability, consequential provisions on account of doubtful recovery cannot be alleged to be an unascertained liability as correctly pleaded. Thus, no adjustment was required as per the extant law while computing the book profit on account of impairment / diminution of assets. For arriving at such conclusion, we also notice that clause (i) to Explanation-1 appended to sub Section 2 of Section 115JB does not feature in the reasons recorded and the solitary basis for escapement is allegation towards unascertained liability. As noticed earlier, the provision for doubtful debt does not bear the nature of liability per se and therefore, the foundation for claiming escapement by Assessing Officer is shaken to its roots. 10.6 As regards provisions of Retirement Benefit, it was contended in the objection that the said provision was on account of leave encashment on the basis of actuarial valuation and therefore the provision was in the nature of 'ascer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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