UNICON INDUSTRIES PRIVATE LIMITED,HYDERABAD vs. DEPUTY COMMISSIONER OF INCOME TAX,CIRCLE-17(2), HYDERABAD

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ITA 410/HYD/2021Status: DisposedITAT Hyderabad03 December 2021AY 2014-153 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the issue of assets being used for less than 180 days is not an apparent mistake rectifiable under Section 154, as it requires a detailed inquiry. Therefore, the disallowance of depreciation was deleted.

What were the facts?

The assessee claimed depreciation on plant and machinery for AY 2014-15. The Assessing Officer initially allowed this claim but later sought to disallow it under Section 154, arguing the assets were used for less than 180 days in the preceding year.

What were the issues?

Whether a disallowance of depreciation based on the usage of assets for less than 180 days in the preceding year is an apparent mistake rectifiable under Section 154 of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 154,Section 250

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, Hyderabad ‘ A ‘ Bench, Hyderabad

Before: Shri A. Mohan Alankamony & Shri S.S. Godara

Hearing: 06/12/2021Pronounced: 07/12/2021

O R D E R Per S. S. Godara, J.M. This assessee’s appeal for A.Y 2014-15 arises from the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi’s order dated 21.09.2021 in case No.ITBA/ NFAC/S/250/2021-22/1035761358(1) involving proceedings under section 250 of Income Tax Act, 1961 (in short, “the Act”).

Heard both the parties. Case file perused.

3.

Coming to the assessee’s sole substantive grievance that both the lower authorities have erred in law and on facts in disallowing its depreciation relief of Rs.7,64,709/- claimed in respect of plant and machinery thereby restricting it @ 15% only since the assets had been put to use for less than 180 days in preceding A.Y. 2013-14, we note with the able assistance coming from both the parties that this is an instance of the Assessing Officer having accepted the corresponding relief in section 143(3) assessment on 29.11.2016.

4.

There is hardly any dispute about the fact that the Assessing Officer thereafter invoked section 154 jurisdiction seeking to disallow the impugned depreciation claim by treating it as an information coming to his notice during verification. We make it clear that there is no rebuttal to the clinching fact about assessee’s impugned claim pertains to assets put to use for less than 180 days in the preceding assessment year. We hold in these factual circumstances that such an issue is not in the nature of an apparent mistake attracting section 154 rectification of mistake as held in hon’ble apex court’s landmark decision in T.S. Balram Vs M/s. Volkart Brothers (1971) 82 ITR 50 (SC). Their lordships hold that a rectification is not meant to correct the alleged mistakes requiring long drawn process of enquiry. We accordingly delete the impugned additional depreciation disallowance going by the very reasoning only.

5.

This assessee’s appeal is allowed in above terms.

Order pronounced in the Open Court on 7th December, 2021.

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