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Facts
The Revenue filed an appeal against the CIT(A)'s order, which partly allowed the assessee's appeal against the assessment order. The core issue revolves around the claim of depreciation on the block of plant and machinery. A discrepancy was noted in the opening Written Down Value (WDV) due to a data entry error in the return of income.
Held
The Tribunal noted that the error in the opening WDV was a typographical mistake, which was subsequently rectified in a revised return. The Tribunal also observed that the Assessing Officer (AO) had taken the income from the revised return as the basis for assessment without disallowing depreciation. The CIT(A) had directed the AO to examine the facts and grant the correct depreciation.
Key Issues
Whether the CIT(A) was justified in allowing depreciation claim despite a discrepancy in the opening WDV due to a typographical error, and whether the assessment order correctly considered the revised return.
Sections Cited
250, 143(3), 144C(3), 32
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
(Assessment Year: 2018-2019) Assistant Commissioner of Income Tax 3(4), Mumbai 5th Floor, Room No.549, Aayakar Bhavan, Mumbai – 400020, Maharashtra. …………. Appellant Vs ACC Cement Limited 121, Cement House, Maharshi Karve Road, Churchgate, Mumbai – 400020. Maharashtra. [PAN:AAACT1507C] …………. Respondent Appearance For the Appellant/Department : Dr. K. R. Subhash For the Respondent/Assessee : Shri Vartik Choksi Date Conclusion of hearing : 23.10.2024 Pronouncement of order : 31.12.2024 O R D E R [ Per Rahul Chaudhary, Judicial Member:
1. 1. The present appeal preferred by the Revenue is directed against the order, dated 21/03/2024, passed by the National Faceless Appeal Centre (NFAC), Delhi, [hereinafter referred to as ‘the CIT(A)’] under Section 250 of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] whereby the Ld. CIT(A) had partly allowed the appeal against the Assessment Order, dated 13/12/2021, passed under Section 143(3) read with Section 144C(3) of the Act for the Assessment Year 2018-19.
2. The Revenue has raised following grounds of appeal :
1. Whether on the facts of the case and in law, Ld. CIT(A) was Assessment Year 2018-2019 justified in holding the depreciation claimed u/s.32 to the extent of Rs.317,04,38,728/- as valid, even if the assessee has not claimed it in any of its valid ITRs? 2. Whether on the facts of the case and in law, Ld. CIT(A) was justified in considering this mistake as a typographical error and not discussing about the validity of the return which was filed after the due date of the filing of return and in which the WDV was changed to Rs.2348,47,31,632/-?.”
We note that there is delay of 24 days in filing the present appeal. The Revenue has filed application seeking for condonation of delay in filing the appeal along with affidavit. The Learned Authorised Representative for the Assessee did not dispute the reasons for delay in filing appeal stated in the aforesaid application. Accordingly, the delay of 24 days in filing the appeal is condoned.
On merit we find that the sole grievance of the Revenue is directed against the following directions given by the CIT(A) in relation to claim of depreciation. The relevant facts and the issue in dispute as captured by the CIT(A) in the order impugned by the Revenue reads as under:
“Ground II – short grant of depreciation under income tax act:
1. 1. On the facts and circumstances of the case and in law, the Ld. ADIT, CPC erred in allowing depreciation under Income Tax Act amounting to Rs. 317,21,52,609 only as against the amount claimed in the Income Tax Return amounting to Rs. 634,25,91,337.
2. The Appellant therefore prays that disallowance of Rs. 317,04,38,728 (Rs. 634,25,91,337 – Rs. 317,21,52,609) on account of depreciation be deleted. The appellant has dealt with this ground in the statement of facts, which explains the issue involved in this ground. The same is reproduced below: “2.0 Short grant of depreciation under Income Tax Act Assessment Year 2018-2019 2.1 As per the return of income the total depreciation on the block of plant & machinery is Rs. 486,44,42,262/- whereas the depreciation allowed in the intimation is Rs. 169,40,03,533/-. The said error was due to data punching while entering the amount of opening WDV for the said block. The opening WDV for the block was Rs. 2348,47,31,362/- whereas in the return of income this has been erroneously mentioned as Rs. 234,84,73,162/- . Due to this there is a mismatch in depreciation claimed u/s 32 to the extent of Rs. 317,04,38,728, i.e., Rs. 634,25,91,337/- less Rs. 317,21,52,609/-.” The reason leading to disallowance has been explained by the appellant. The value of WDV would naturally be available in audit report/Tax Audit Report which are part of the return of Income. The grievance is factual in nature. There appears to be a bona fide mistake that has creeped in the computation. The AO is directed to examine the facts on this issue and allow the correct amount of depreciation which has creeped in due to typographical error. The ground is allowed for statistical purposes”
We have given thoughtful consideration to the rival submissions. The Revenue has not disputed the contention of the Assessee that the opening Written Down Value (WDV) for the Plant & Machinery Block was INR.23484731362/- [and not INR.2348473162/-]. We also note that the revised return filed by the Assessee on 28/03/2019 has not been rejected as being invalid. Further, in the original as well as the revised return of income the Assessee has claimed Depreciation allowable under Income Tax Act as INR.634,25,91,337/- [as per Schedule – DEP]. During the course of hearing, it was clarified by the Learned Authorised Representative for the Assessee, that in the original as well as revised return of income the Assessee had claimed depreciation taking correct value of Opening WDV of Block of Plant & Machinery (15%) as INR.2348,47,31,362/- and that the only error was in punching the Opening WDV of the Block of Plant & Machinery (15%) which was subsequently rectified by filing the revised return of income on 28/03/2019. The aforesaid position becomes clear on the comparative analysis of Clause 3(a) of Assessment Year 2018-2019 Schedule DPM – ‘Deprecation on Plant and Machinery [Other than assets on which full capital expenditure is allowable as deduction under any other Section]’ of the Original Income Tax Return and the Revised Income Tax Return. We also note while passing the Assessment Order, dated 13/12/2021, under Section 143(3) of the Act for the Assessment Year 2018-19, the income declared by Assessee in revised return of income (i.e. INR.1115,40,95,610/-) has been taken as the basis and no disallowance on account of depreciation has been made. In any case, the CIT(A) has merely directed the Assessing Officer to examine the facts and grant correct amount of depreciation as per law. In view of the aforesaid we do not find any merit in the contentions raised by the Revenue. Accordingly, Ground No.1 and 2 raised by the Revenue are dismissed.
In result, the present appeal preferred by the Revenue is dismissed.
Order pronounced on 31.12.2024.