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Income Tax Appellate Tribunal, KOLKATA BENCH (SMC
Before: Shri P.M. Jagtap, AM]
order : January 12, 2018 ORDER This appeal filed by the assessee is directed against the order of Ld. CIT (Appeals) -1, Kolkata dated 22.05.201 and the solitary issue involved therein relates to the refusal of the Ld. CIT(A) to admit the additional ground filed by the assessee claiming additional depreciation of Rs. 33,96,134/-.
The assessee in the present case is a company which is engaged in the business of manufacturing and trading of engineering books. The return of income for the year under consideration was filed by it on 15.11.2006 declaring a total income at Nil. In the assessment completed under section 143(3) vide an order dated 31.12.2008, the total income of the assessee company was determined by the A.O. at Rs. 41,67,460/- after making certain additions / disallowances.
IMECO LTd.
Against the order passed by the A.O. under section 143(3), an appeal was preferred by the assessee before the Ld. CIT(A) disputing the additions / disallowances made by the A.O. in the said assessment. During the course of appellate proceedings before the Ld. CIT(A), additional ground was filed by the assessee making the claim for additional depreciation of Rs. 33,96,134/-. It was submitted on behalf of the assessee company that the said claim was made even before the Assessing Officer during the course of assessment proceedings vide letter dated 04.09.2008 and even the required report in Form 3AA as required under section 32(1)(ii) of the Act duly certified by the Chartered Accountant was also filed. It was contended that the Assessing Officer however did not take cognizance of the said claim and proceeded to complete the assessment without making any discussion on the claim made by the assessee for additional depreciation. A prayer therefore was made by the assessee to the Ld. CIT(A) for admission of the additional ground by relying on the relevant judicial pronouncements. The Ld. CIT(A) did not accept the prayer of the assessee and refused to admit the additional ground for the following reasons given in his impugned order: “I have considered the material before me. The appellant’s A.R. has contended that the A.O. failed to allow the claim of additional depreciation amounting to Rs. 33,96,134/- u/s 32(1)(ii) made by the appellant company which had also submitted report in Form 3AA u/s 32(1)(ii) of the Income Tax Act, 1961 duly certified by the Chartered Accountants in support of the said claim. The appellant has raised an additional ground, it is found that the A.O. has not dealt with this issue in the assessment order. However, since this is a legal ground it is being dealt with as under: On the issue of admission of an additional ground, which does not arise from the order of the A.O., as per provisions of section 250(5), these empowers the CIT(A) to admit such additional ground(s), at his discretion which has to be exercised judiciously, provided he is satisfied that IMECO LTd. omission to include the issue in the original appeal was not wilful or unreasonable or that such ground could not have been raised earlier for good reasons [Jute Corporation of India Ltd. vs CIT 187 CIT 688 (SC)]. Further, the primary facts relating to the issue should be available on record; if the relevant facts are not available on record, the issue cannot be taken in the form of additional ground [refer National Thermal Power Co. Ltd. vs CIT, 229 ITR 353 (SC)]. I have considered the material before me and the written submissions of the appellant. It is observed that the appellant has only referred to the availability of certificate in Form 3AA with the return in support of its claim for admission of the additional ground. However, it is found that the appellant has not adduced the reasons for omission for raising the said ground before the A.O. Moreover, the complete details and primary facts regarding the purchase/installation of the concerned plant & machinery were not furnished even during the appellate proceedings to substantiate the genuineness for the claim of allowability of additional depreciation u/s 32(1)(ii) of the Act, as held by the Hon’ble Apex Court in the case of National Thermal Power Co. Ltd. vs CIT 229 ITR 353 (supra). In view of the above discussion, the additional ground of appeal
raised by the appellant is not admitted. Therefore, this ground is not allowed.” Aggrieved by the order of the Ld. CIT(A), the assessee has preferred this appeal before the Tribunal.
4. I have heard the arguments of both the sides and also perused the relevant material available on record. As submitted on behalf of the assessee before the Ld. CIT(A) as well as before the Tribunal, the claim for additional depreciation under section 32(1)(ii) was made by the assessee by way of a letter dated 04.09.2008 filed before the A.O. during the course of assessment proceedings. The report of the Chartered Accountant in the prescribed Form 3AA as required under section 32(1)(ii) of the Act was also filed by the assessee along with the said letter in support of its claim for additional depreciation. A copy of the said letter is placed on record before the Tribunal by the learned counsel for the assessee and perusal of the same shows that IMECO LTd. the relevant details of plant & machinery purchased by the assessee during the year under consideration were duly furnished under the said letter in Annexure A. As rightly contended by the learned counsel for the assessee, the issue relating to its claim for additional depreciation under section 32(1)(ii) thus was very much raised by the assessee company during the course of assessment proceedings before the A.O. and all the primary facts relating to the said issue were also placed on record by way of the auditors certificate in Form 3AA and Annexure A thereto giving all the relevant details. Having regard to these facts of the case, I am of the view that the Ld. CIT(A) was not justified in refusing to admit the additional ground filed by the assessee raising the issue relating to its claim for additional depreciation on the grounds that primary facts relating to the said issue were not available on record and no reasons were adduced by the assessee for omission to raise the said issue before the Assessing Officer. I find that the issue involved in the additional ground was very much raised by the assessee before the A.O. and even all the primary facts related to the said issue were placed on record by the assessee company. Even the learned DR at the time of hearing before the Tribunal has not been able to rebut or controvert this position clearly evident from the record. The only contention raised by him is that the matter may be sent back to the A.O. for verification of new claim made by the assessee for additional depreciation. I find merit in this contention of the learned DR. The impugned order of the Ld. CIT(A) on this issue is accordingly set aside and the matter is restored to the file of the A.O. with the direction to decide the same in accordance with law after giving proper and sufficient opportunity of being heard to the assessee.