TMI Blog2024 (3) TMI 1208X X X X Extracts X X X X X X X X Extracts X X X X ..... at the case of the assessee was selected for complete scrutiny - HELD THAT:- On perusal of the finding of facts arrived at by the Tribunal it is clear that the Tribunal after considering the issue of claiming the depreciation by the respondent-assessee as per the Act has come to the conclusion that the Assessment Order is neither erroneous nor prejudicial to the interest of Revenue. Tribunal has also observed that the CBDT Instruction No. 9 of 2007 dated 11.09.2007 relied upon by the PCIT would also not be applicable in the facts of the case as the same pertains to the issue of allowability of depreciation and brought forward losses/unabsorbed losses. However, in the case of the respondent-assessee there was no issue pertaining to the broug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,72,520/-. 3.2. The case of the assessee was selected for scrutiny and the Assessment Order was passed under Section 143(3) of the Act on 11.02.2021 by accepting the returned income. 3.3. Subsequently, the Internal Audit Party observed that during the assessment proceedings, no proper verification of the purchase of the new assets of Rs. 30.84 crore and depreciation claimed on the assets has been made by the Assessing Officer. The Principal Commissioner of Income Tax, Valsad (for short the PCIT ) therefore initiated proceedings under Section 263 of the Act on 25.09.2023 and set aside the Assessment Order with a direction to frame the de-novo assessment after making a proper inquiry by the Assessing Officer. 3.4. Being aggrieved, the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee, as per companies Act, has been raised by ld PCIT. We note that there is no default on the part of the assessee to submit the depreciation schedule as per companies Act and as per Income Tax Act before the assessing officer. Therefore, on merit also the assessing officer has examined the issue which was raised by the ld. Principal Commissioner of Income Tax. The ld. PCIT also stated in his order that depreciation issue has not been examined by the assessing officer as per CBDT instruction, in this regard ld. Counsel stated that CBDT Instruction No. 9/2007 dated 11.09.2007 pertains to the issue of the allowability of depreciation and brought forward losses/unabsorbed losses, however in assessee s case there is no any such iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order is passed by the Assessing Officer without application of mind; (v) if the AO has not investigated the issue before him; then the order passed by the Assessing Officer can be termed as erroneous order. Coming next to the second limb, which is required to be examined as to whether the actions of the AO can be termed as prejudicial to the interest of Revenue. When this aspect is examined one has to understand what is prejudicial to the interest of the revenue. The Hon ble Supreme Court in case of Malabar Industries (supra) held that this phrase i.e. prejudicial to the interest of the revenue has to be read in conjunction with an erroneous order passed by the Assessing Officer. Their Lordship held that it has to be remembered that every ..... X X X X Extracts X X X X X X X X Extracts X X X X
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