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Order Under Section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee under section 253 of Income tax Act is directed against the order of Commissioner (Appeals) dated 03rd July 2012 in the matter of assessment order passed under section 143(3) dated 30th December 2012 for assessment year 2009-10. 2. Brief facts of the case are that assessee company is engaged in the manufacturing of Textile, filed its return of income for assessment year 2009-10 on 21 September 2009, declaring total income at Rs. Nill. The assessment was completed on 30th December 2012 under section 143(3).
The assessing officer while passing assessment order besides the other additions and disallowance, disallowed the depreciation of Rs. 1,12,38,348/-. On appeal before ld. Commissioner (Appeals) the action of assessing officer was upheld. Therefore, further aggrieved by the order of ld. Commissioner (Appeals) the assessee has filed present appeal before us. The assessee has raised following grounds of appeal; (i) On the facts and in the circumstances of the case and in law the authorities below have erred in disallowing a sum of Rs. 35,848/- under section 14A read with Rule 8D and the reasons assigned by them were wholly wrong, and not in accordance with the facts of the case, and is against the provision of IT Act and Rules made hereunder. (ii) On the facts and circumstances of the case and in law, the authorities below have erred in not the adjusting the brought forward business and depreciation losses of the previous year amounting to Rs.1,82,26,639/- which is not in accordance with IT Act and Rules made thereunder. (iii) On the facts and circumstances of the case and in law, the authorities below have erred in rejecting the ground for not allowing the proper appreciation to which the appellant is entitled without due and proper verification of the facts. The assessing officer has disallowed the depreciation of Rs. 1,12,38,348/- being the depreciation on the TUFF Machines and other which is correctly calculated. No working of the disallowance or calculation of depreciation is given in the entire assessment order, which is against the provision of IT Act and Rules made there under. (iv) On the facts and circumstances of the case and in law, the authorities below have further erred in not allowing the additional depreciation under section 32(1)(ii) of the Act, to which the appellant is legitimately entitled and the reasons, assigned by them were wholly wrong, and not in accordance with the provisions of the IT Act and Rules made thereunder.
We have heard the learned Authorised Representative (‘AR’) of the assessee and learned Departmental Representative (‘DR’) for the revenue and perused the material available on record. At the outset of hearing the learned AR of the assessee submits that he is not pressing ground No.1 & 2 raised in the present appeal. Considering the submission of learned AR of the assessee ground No. 1 & 2 are dismissed as not pressed. Ground No.3 and 4 four relates to the appreciation on Tuff Machines and additional depreciation under section 32(1)(ii). The learned AR of the assessee submits that after passing the impugned order by ld Commissioner (Appeals), the assessing officer passed the assessment order for earlier assessment year, i.e. for assessment year 2008-09, under section 143(3) rws 147, dated 26th March 2016. The ld. AR for the assessee prayed that the written down value (WDV) of the assets considered by assessing officer while passing the assessment order for 2008-09 on 26th March 2016 be taken into consideration by assessing officer while disallowing the depreciation for the year under consideration. The ld. AR for the assessee prayed that the ground No.3 and 4 may be restored to the file of assessing officer for verification of facts and to allow the depreciation by considering the WDV of asset taken by assessing officer while passing the order for assessment year 2008-09 on 26th March 2016. The ld. AR for the assessee filed copy of 3 the assessment order dated on record. On the contrary the learned the AR for the revenue supported the order of Commissioner (Appeals).
We have considered the rival submission of the parties and have gone through the orders of authorities. The assessing officer while passing the assessment order, on the basis of the record of assessment year 2007-08 observed that the assessee claimed depreciation @ 50% on the plant and machinery used in weaving processing under Technology Upgradation Fund Scheme (TUFS). The assessee claimed to have purchased that machine during the financial year related with assessment year 2007-08 on which higher rate of depreciation @50% was claimed. The assessee gain claimed depreciation @ 50% on plant and machinery. The assessee was asked to furnish the details of block of asset on which the depreciation was claimed and to give the details of last three years having opening WDV. The assessee filed its reply dated 26.12.2011. In the reply the assessee contended that no addition to the block of fixed asset and or in earlier years there is no addition. The assessing officer on the basis of record of assessment year 2007-08 restricted the depreciation @15%. The ld CIT(A) confirmed the action of the assessing officer holding that the assessee is entitled for depreciation @50% under Technology Upgradation Fund Scheme (TUFS) on asset purchased on or after 01.04.2001 and put to use before 01.04.2001 and in this case the 4 machinery was purchased after that date. Before us the ld AR for the assessee confined his submissions that the WDV for the year under consideration be taken from the assessment order 2007-08 dated 26.03.2016 for working out the entitlement of depreciation. In our view the submission of ld. AR for the assessee is reasonable, which we accept.
Considering the submissions of the ld AR for the assessee the ground No.3 &4 are restored to the file of assessing officer, the assessing officer is directed to consider the WDV of the block of asset of plant and machinery as taken in the assessment order for 2008-09 dated 26.03.206 and to pass the order afresh in accordance with law. Needless to before passing the order the assessing officer shall grant opportunity of hearing to the assessee. In the result the ground No.3 & 4 are allowed for statistical purpose.