NEW RAMPGREEN TECHNOLOGIES PRIVATE LIMITED,MUMBAI vs. ITO WARD-7(2)(1), MUMBAI
Income Tax Appellate Tribunal, Mumbai “B” Bench, Mumbai.
Before: Smt. Beena Pillai (JM) & Shri Omkareshwar Chidara (AM) New Rampgreen Technologies Pvt. Ltd. Centre GD Ambedkar Marg Wadala SO,Mumbai-400 031. Vs. ITO Ward 7(2)(1) Room No. 126 Aayakar Bhavan M.K. Road Mumbai-400 020. PAN : AADCV9341F
Per Omkareshwar Chidara (AM) :-
The only issue of dispute between the Revenue and appellant is that whether the appellant is eligible for depreciation of 50% of eligible depreciation or full depreciation.
From the assessment order, it is seen that the Revenue issued a notice under section 148 of the Income Tax Act as there is an escapement of income relating to claiming of excess depreciation. It is also observed that the appellant did not respond to the notice under section 148 of the Act. Subsequently, the Ld. AO reopened the assessment and issued notices under section 142(1) of the Act. In response to these notices, the appellant filed a letter dated 28.9.2021 stating the company has purchased office premises of Rs. 7.6 crores. The company has paid Rs. 1.5 crore on 6.5.2014 and balance of Rs. 6 crore was paid on 27.1.2015. The Ld. AO disallowed 50% of the depreciation claimed by appellant as the same was put to use less than 180 days.
2
3. The Ld. CIT(A) confirmed the addition by adjudicating that the appellant company should be the owner of asset and put to “use” and as the appellant is not the owner of asset for more than 180 days, it is not entitled for the depreciation in full.
Aggrieved by the addition made by the Ld. AO, which was confirmed by Ld. CIT(A), the appellant company filed an appeal before the ITAT stating that the addition made by the Ld.AO is incorrect. Subsequently, additional grounds of appeal were filed by the appellant company before the appeal was posted for hearing, challenging the reopening of assessment by stating that the reopening was done based on the contents of Audit report which was already there before Ld. AO when the assessment was earlier completed under section 143(3) of the Act. Hence, it amount to change of opinion.
The Ld. AR of the appellant has argued before the ITAT that the even though the asset was put to use for part of the year also, the company is entitled to full depreciation and the disallowance of depreciation of Rs. 38 lakhs is incorrect. Reliance was placed on some decisions for the proposition that it is not necessary that the asset received need not be used for whole of year or even if the asset is not used in earlier years, the appellant is entitled for depreciation. Another decision of Hon'ble Bombay High Court Whittle Anderson Ltd. Ld. CIT(A) 79 ITR 613 (Bom) was relied on by Ld. AR of the appellant for the proposition that even the “passive” usage of asset entitles an entity for full depreciation. As far as the reopening is concerned, the Ld. AR of the appellant has argued that this audit report was available with the Ld. AO during earlier assessment and reopening the same on this basis, is not tenable.
The Ld. DR relied on the orders of lower authorities.
At the outset, it is observed that there is a small delay of 27 days in filing appeal. An appeal and affidavit were filed by Ld. AR of appellant that the delay is due to mental disturbance caused by death of father of director.
3
Hence, the delay is condoned and processed to adjudicate the matter on merits.
8. Heard both sides. As far as reopening is concerned, the Ld. AO reopened the assessment based on the information of Tax Audit report. This ground was not raised before the Ld. AO and Ld. CIT(A) and hence not adjudicated by them. Moreover, the appellant company has not filed any Return of Income in response to the notice under section 148 of the Act and hence the assessment was done under section 144 read with section 147 of the Act. From the assessment order, it is observed that the appellant has not filed any objections to reopen the assessment. As the matter goes to the root of the matter, this ground of reopening can be taken subsequently also in view of the decision of Hon'ble Supreme Court in the case of NTPC Ltd. and hence allowed. Section 148 clearly states that to reopen an assessment beyond four years, there should be failure on the part of appellant to furnish the details. In this case, the assessment is reopened beyond four years where the earlier assessment was completed under section 143(3) of the Act.
9. As far as the addition relating to depreciation is concerned, it can be observed from the assessment order that the appellant company has already paid part purchase consideration and got the office premises registered on 6.5.2014 itself and the remaining consideration was paid subsequently on 27.1.2015 through bank. Even though part of the consideration was paid during second half of F.Y., the appellant became the owner of property during first six months of F.Y. There is no dispute regarding the “usage” of property. As both the ingredients of “ownership” and “usage” were fulfilled
4
for a period of more than six months, the appellant company is entitled for full depreciation and 50% depreciation cannot be disallowed by the Ld. AO.
The part depreciation disallowed by Ld. AO is incorrect and hence directed to delete the addition.
Thus, the appellant succeeds on the ground of reopening as well as on merits.
The appeal of appellant is allowed.
Order pronounced in the open Court on 20/06/2025. (BEENA PILLAI)
ACCOUNTANT MEMBER
Copy of the Order forwarded to :
The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file.
BY ORDER,
////
(