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TMI Blog2018 (6) TMI 1823X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner of Income Tax (Appeals) I, Baroda has erred in law and in facts in upholding the action of the Ld. AO in the reassessment made u/s. 147 r.w.s. 143(3) in subjecting to tax the amount on depreciation of Rs. 21,39.973/-. The depreciation was allowed in the assessment made u/s. 143(3) on 02.02.2011 and that such disallowance is made merely on the change of opinion and hence could not have been disallowed in the reassessment. ^The claim may please be allowed as made. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A)-I has erred in law and in facts in confirming the disallowance of Rs.21,39,973/- (being 15% of Rs.1,42,66,483/-) claimed as depreciation on the amount of cost of plant & machinery incurred as r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plant, the travelling cost of the architects etc. which were incurred by GCI and paid by them on assessee's behalf to the external third parties during the period form 2000 to 2002. The assessee has set up its plants during the period of 2000 to 2002 in India. In this phase, the assessee had very limited organizational and financial resources. So, GCI assisted assessee in Plant set up phase engaging external service providers (such as plant consultant, architect, etc). GCI had also made payments to them on behalf of the assessee and the assessee was to reimburse the same to GCI. However, the exact amounts of the same were to reimburse the same to GCI. However, the exact amount of the same was not known till the date GCI raised a debit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the assessee has capitalized the amount of expense which were incurred earlier and not reimbursed earlier, are paid to the principal company on raising their claim by way of debit note. 9. Considering the above submission, since the expense has been claimed as per the law, the same should be allowed, to the assessee company. 10. Submission of the assessee company has been perused and is not found to be acceptable. In view of section 43A of IT Act, the cost of the asset was required to be reduced by the amount of reimbursement. The assessee company failed to reduce the amount of reimbursement from cost of asset. In this way the assessee company claimed the following excess depreciation. Plant & Machinery (Anhydrous &TTC Plan 1-Apr.06 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting up of the Plants to the respective plants account in FY 2006-07 when it received debit notes from Gulbrandsen Chemicals Inc., USA for such reimbursement. They made the payment. 14. In fact, A.O. has invoked Section 43A on the basis of misconception in as much as receipt of Rs. 14266483/- was for reimbursement from the company and same was the debit to the company and this aspect is not disputed. On account of aforesaid discussion, we allow the appeal of the appellant and direct the A.O. to allow excess depreciation of Rs. 2139973/-. 15. In view of the above discussion, we allow this ground of appeal. 16. So far ground no. 3 & 4 are concerned; same are premature and need not to the adjudicated by us at this stage. 17. So far in ITA ..... X X X X Extracts X X X X X X X X Extracts X X X X
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