TMI Blog2023 (9) TMI 892X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd [ 2014 (11) TMI 49 - ANDHRA PRADESH HIGH COURT] held that where for purpose of section 115J, assessee claimed depreciation at rates provided under Income-tax Rules, action of AO in redrawing profit and loss account and adopting rates prescribed under Companies Act, was totally unauthorized. We are of the considered view that in the instant facts, PCIT erred in facts and law in holding that the assessment order was erroneous and prejudicial to the interests of the revenue. Addition u/s 40A - On applicability of Sec. 40A(2) (b), a specific query was raised by the Assessing Officer and when answered, the Assessing Officer had accepted payments. Therefore, exercise of revisional jurisdiction was not warranted.bTribunal has observed that once the Assessing Officer had passed an order after carrying out the verification such cannot be held to be erroneous and prejudicial to the revenue. In the case of Shreeji Prints (P) Ltd. [ 2021 (9) TMI 108 - SUPREME COURT] confirmed the view of the High Court which had held that since the Assessing Officer had made inquiries and accepted the genuineness a plausible view so taken could not be held to be erroneous and prejudicial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s eligible for depreciation @ 15.33% only which worked out to Rs. 65,19,082/-, the assessee has been allowed excess depreciation of Rs. 2,75,00,917/- on the windmill, while computing the book profit for the relevant period. As per the form 29B (read with rule 40B), filed with the Return of Income, the book profit u/s 115JB has been calculated at Rs. 18,51,663/- and MAT at Rs. 1,38,875/-. (ii) Since the tax under regular provision of tax has been calculated at Rs. 5,92,063/- which is higher than MAT on book profit u/s 115JB of the Act, the income as per regular provision of Income Tax was adopted as total income of the Assessee. (iii) However, in light of the facts narrated above, assessee s book profit u/s 115JB of the Act had been under-assessed at Rs. 2,87,88,357/- and MAT on the same Rs. 43,18,253/- as against tax paid Rs. 5,92,063/- computed in the Assessment Order. (iv) It is seen that assessee made related party payments to M.C. Metal Pvt Ltd on account of job work payments Rs. 48,49,883/- sales Rs. 1,86,14,467/- job-work receipt Rs. 9,22,254/-. No verification regarding it being at Fair Market Value as per the provisions of sec. 40A(2)(b) has been done ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Supreme Court which is referred to the larger Bench is decided, the law pronounced in the judgement which is referred for reconsideration is binding. Therefore, the case of Dynamic Orthopaedics (supra), would not dilute the precedential value in the case of Malayala Manorama (supra). 5.1 Mr. Manish Shah, learned counsel, would further submit that on the aspect of applicability of Sec. 40A(2) (b), a specific query was raised by the Assessing Officer on 04.01.2023 and when answered, the Assessing Officer had accepted payments. Therefore, exercise of revisional jurisdiction was not warranted. 6. Having heard learned counsels appearing for the respective parties, what is evident is that on the question of treatment of depreciation, the ITAT in para 6, held as under: 6. We have heard the rival contentions and perused the material on record on this ground. In the case of Malayala Manorama Co. Ltd v. CIT [2008] 169 Taxman 471 (SC), the facts were that in the profit and loss account for the relevant assessment year, the assessee had debited depreciation at the rates prescribed by the Income-tax Rules, 1962. However, the Assessing Officer was of the view that for purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax records and debited to profit and loss account was not violative of provisions of Companies Act and ITAT has not erred in cancelling order passed by Commissioner under section 263 of the Act. Again, in the case of CIT Ludhiana v. Sona Woollen Mills (P) Ltd. [2007] 160 Taxman 22 (Punjab Haryana), assessee claimed depreciation as per provisions of income tax Act for computing quantum of income under section 115J. The Assessing Officer rejected claim of assessee on ground that depreciation for purposes of section 115J was permissible as per Schedule XIV of Companies Act. The Commissioner (Appeals) allowed claim of assessee holding that depreciation provided under Companies Act was minimum but there was no bar to higher depreciation being claimed by assessee and, thus, for purposes of section 115J, depreciation actually debited could be allowed. The High Court held that in view of Supreme Court decision in Apollo Tyres Ltd. v. CIT [2002] 122 Taxman 562, Commissioner (Appeals) was justified in holding that the assessee is eligible to claim higher rate of depreciation and Income Tax Act. The Delhi ITAT in the case of HAL Offshore Ltd [2019] 108 taxmann.com 390 (Delhi Trib.) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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