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TMI Blog2023 (6) TMI 1421X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment order of National e-Assessment Centre, Delhi u/s. 143(3) r.w.s. 143(3A) and 143(3B) of the Act, dated 30.03.2021 for AY 2017-18. 2. Grounds raised by the assessee in the present appeal are as under: "1. That on the facts and in the circumstances of the case and law, the order passed by the Ld. Pr. CIT under section 263 of the Income-tax Act, 1961 ('IT Act') is illegal, invalid and not sustainable in law. 2. That on the facts and in the circumstances of the case and law, the Ld. Pr. CIT grossly erred in passing the order under section 263 even though the assessment order under section 143(3) dated 03.03.2021 passed by the Assessing Officer (AO) was neither erroneous nor prejudicial to the interest of the Revenue. 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed LPG out of butane and propane. Assessee was formed as a joint venture between Indian Oil Corporation Ltd., a Public Sector Undertaking of the Government of India and Petroliam Nasional Berhad (Petronas), Government Undertaking of Malaysia. 4.1. Assessee filed its return of income on 30.11.2017 reporting total income of Rs.321,35,87,220/- which was revised on 23.10.2018 with total income of Rs. 318,26,09,220/-. After making certain disallowance, total income of the assessee was assessed at Rs. 319,30,69,220/- u/s. 143(3) read with sections 143(3A) and 143 (3B) of the Act vide order dated 03.03. 2021 by National e-Assessment Centre (Ne AC). 4.2. Subsequently, Ld. Pr. CIT called for and examined the assessment records and observed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsel for the assessee has placed on record a paper book containing 174 pages. According to the Ld. Counsel, assessee had entered into an arrangement with a company called Ennore Tank Terminal Private Limited (ETTPL) for the FY 2012-13 to construct two insulated pipelines to handle the products. Under the agreement, specific pipelines are constructed that are used exclusively to handle the products of the assessee only. The ownership of the pipeline is with ETTPL. Assessee has voluntarily offered to be a committed user of the said facility for a fixed tenure unequivocally waiving any right of termination of the agreement during the fixed tenure. The period of agreement is for 24 years with a minimum guaranteed locking period upto 31.03.2036 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te no. 29, ld. Counsel pointed to the chart containing details of various assets and demonstrated how the amount of 3. 09 Crores which is charged for the leasehold equipments forms part of the depreciation chart in the statement of Profit & Loss. According to him, Rs. 3. 09 Crores formed part of the total charge of depreciation on tangible assets of Rs. 3517.30 lacs. In addition to this, vide Note No. 4, there is a depreciation of Rs. 39.32 lacs on intangible assets. After referring to these details from the audited financial statements, which are prepared in compliance with the provisions of Companies Act Ind AS issued by ICAI. Ld. Counsel referred to the computation of total income to demonstrate the treatment of depreciation as per Compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f claim of deduction of Rs. 3.09 Crores towards lease. Both the notices have been issued by the same Officer (i) for AY 2018 -19 on 14.03.2023 and (ii) for AY 2017-18 dated 15.03.2023. Ld. Counsel submitted that the revisionary proceeding for AY 2018-19 on the same issue has been dropped by the Ld. Pr. CIT. Also, in the revisionary order in the impugned year, nothing has been pointed as to how the order is erroneous leading to prejudice to the interest of the revenue except for setting aside the assessment and directing the AO to verify the claim from its books of account and reframe the assessment afresh after providing opportunity to the assessee. 5.5. Ld. Counsel thus, asserted that there is no application consideration for which he pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th on tangible assets and intangible assets which includes equipment under lease. Further, the charge of depreciation and amortization which has been adjusted while computing the income under the head "Profits and Gains of business or profession" in accordance with the provisions of the Act has also been substantiated by the Ld. Counsel. 7.1. The relevant disclosures made by the assessee in its audited financial statements are reproduced as under: 7.2. From the verification of the above disclosure and computation, we find that the very premise assumed by Ld. Pr. CIT does not hold good and thus, when the foundation itself collapses the super-structure falls. We find that in the present facts and circumstances, the legal maxim 'sublato fu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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