ACIT, CC - I (2), CHENNAI vs. CARGOWINGS (MADRAS) PVT. LTD., CHENNAI

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ITA 3015/CHNY/2019Status: DisposedITAT Chennai03 November 2022AY 2009-104 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the CIT(A)'s direction to the AO for verification was within the powers granted under Section 251 of the IT Act. The CIT(A) had decided the issue on merits and provided directions for computation.

What were the facts?

The Revenue appealed against the CIT(A)'s order which directed the AO to verify the assessee's claim for depreciation on enhanced WDV of assets and credit in P&L account. The assessee, a freight operator, had initially filed a NIL income return.

What were the issues?

Whether the CIT(A) exceeded its powers under Section 251 by directing the AO to verify the assessee's depreciation claim.

Which sections of the Income-tax Act were involved?

Section 115JB,Section 143(3),Section 251

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI

Before: SHRI MAHAVIR SINGH & SHRI G. MANJUNATHA

Hearing: 03.11.2022Pronounced: 03.11.2022

आदेश /O R D E R

PER G. MANJUNATHA, ACCOUNTANT MEMBER:

1.

This appeal filed by the Revenue is directed against the order passed by the learned Commissioner of Income Tax (Appeals)-1, Chennai, dated 13.08.2019 and pertains to assessment year 2009-10.

:-2-: ITA. No:3015 /Chny/2019 2. The Revenue has raised the following grounds of appeal: “1. The order of the CIT(A) is contrary to law, facts and circumstances of the case.

2. The Ld. CIT(A) has erred in not calling for a remand report on both the issues adjudicated.

3. The ld. CIT(A) has erred in directing the AO to verify the claim of the assessee which is not in accordance with the power given u/s. 251 of the IT Act, 1961.

4. For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the learned CIT(A) may be set aside and that of the AO restored.”

3. The brief facts of the case are that, the appellant company is engaged in the business of freight operator, transporting vehicles manufactured in Chennai to other parts of the country. The appellant had filed its return of income for the assessment year 2009-10 on 20.09.2009, admitting total income of Rs. Nil. The assessment had been completed u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) on 16.12.2011, and determined total income of Rs. 73,81,658/- u/s. 115JB of the Act, by making additions towards re-computation of depreciation on enhanced WDV of assets. The assessee carried the matter in appeal before the first appellant authority, and the ld. CIT(A) partly allowed appeal filed by the assessee, where the ld. CIT(A) directed the AO to verify the claim of the assessee with regard to re- computation of depreciation on enhanced WDV of assets and :-3-: ITA. No:3015 /Chny/2019 also deduction towards credit in profit and loss account towards depreciation due to change in method.

4.

The Ld. DR submitted that, although the Revenue has filed appeal against the order of the CIT(A), but the AO has challenged the powers of the CIT(A) u/s. 251 of the Act, in light of findings of the CIT(A), while adjudicating the issue of depreciation on enhanced WDV and amount credited to profit and loss account, on the ground that the CIT(A) does not have power to set aside the issue to the file of the AO. Otherwise, the CIT(A) has discussed the issue on merits and observed how to compute depreciation on enhanced WDV, in light of workings submitted by the assessee.

5.

None appeared for the assessee. We have heard the Ld. DR and considered relevant materials available on record. We find that the Revenue has challenged the powers of the CIT(A) given u/s. 251 of the Act, and contended that the CIT(A) has set aside the appeal for further verification, even though, he does not have power to do so. We find that the CIT(A) has decided the issue involved in appeal filed by the assessee on merits and also discussed how the claim of the assessee

:-4-: ITA. No:3015 /Chny/2019 should be computed. However, for the limited purpose of verification of the claim of the assessee, a direction is given to the AO to re-work the depreciation in accordance with directions given in appellant order. Therefore, in our considered view, the findings given by the CIT(A) in their order dated 13.08.2019 is in accordance with provisions of section 251 of the Act, and thus, we reject the ground taken by the Revenue, that CIT(A) has exceeded in his powers to restore the appeal to the file of the AO.

6.

In the result, the appeal filed by the Revenue is dismissed.

Order pronounced in the court on 03rd November, 2022 at Chennai.

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