ACIT, CIR-28, KOLKATA, KOLKATA vs. RAGHVENDRA PRATAP SINGH, KOLKATA

This is an appeal filed by the revenue against the order of Ld. CIT(A)-8, Kolkata dated 12.06.2015 for AY 2012-13.

The main grievance of the revenue is against the action of the Ld. CIT(A) in annulling the order of the AO passed u/s. 154 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”). 3. Brief facts of the case are that the assessee is in the business of transportation and had declared a total income of Rs.38,92,667/- for the year under consideration. Later, the case was taken up for scrutiny and vide order dated 08.03.2014 the assessment order u/s. 143(3) of the Act was passed assessing total income at Rs.45,80,600/-. Aggrieved by the said decision of the AO, the assessee preferred an appeal before the Ld. CIT(A), who allowed the appeal for statistical purpose by order dated 12.06.2015. While the appeal before the Ld. CIT(A) was pending, the AO noticed that the assessee had claimed depreciation on trucks, trailors and reach stackers @ 40%. According to AO, as per entry no. III(3)(ii) of Part A of Appendix of Income-tax Rules, 1962 (hereinafter referred to as the “Rules”), the rate of depreciation is allowable @ 30% and not 40% as claimed by the assessee. Therefore, the AO issued notice u/s. 154 of the Act and proposed to rectify the 2 Raghvendra Pratap Singh, AY, 2012-13 rate of depreciation @ 30% as against 40% claimed by the assessee in his return of income. The assessee objected by letter dated 06.02.2015 to the proposed rectification. However, the AO did not accept the objection of the assessee and passed an order allowing only depreciation @ 30% and rectified the assessment order passed on 08.03.2014 by order dated 24.02.2015. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A), who was pleased to annull the 154 proceedings relying on the Hon’ble Gujarat High Court decision in the case of M/s. Niko Resources Ltd. Vs. ADIT (2014) 51 taxmann.com 568 (Guj). Aggrieved, the revenue is before us.

We have heard both the parties and carefully perused the material available on record. We note that the assessee’s case for the year under consideration was selected for scrutiny and assessment order was passed u/s. 143(3) of the Act on 08.03.2014. Later, the AO noticed that the assessee has claimed depreciation on trucks, trailors and reach stackers @ 40% whereas as per the entry no. III(3)(ii) of Part A of Appendix of the Rules the rate of depreciation allowable in assessee’s case is 30%. A show cause notice was issued by the AO to invoke 154 proceedings to rectify the error which was objected to by the assessee by relying on the decision of coordinate Bench of this Tribunal in the case of FIS Logistics Pvt. Ltd. Vs. ACIT in ITA No. 343/Kol/2011 dated 11.07.2013 for AY 20056 and circular no. 609 of CBDT dated 29.07.1991. We note that the AO has specifically made a finding that the circular and the order of the Tribunal do not relate to the relevant year under consideration and the rate of depreciation has undergone change w.e.f. AY 2006-07 onwards and since the assessment year under consideration is AY 2012-13, the AO noticed that the assessee claim of depreciation @ 40% is incorrect. We note that the assessee’s claim of depreciation on the trucks, trailors and reach stackers which up to 2005-06 could have claimed 40% and from AY 2006-07 onwards it is 30%. The Ld. AR could not bring to our notice any error in the decision of the AO, whereas according to the Ld. DR, a perusal of the order of the Hon’ble Gujarat High Court in the case of Niko Resources Ltd. (supra) (head note) itself clearly gives that it was a case of an assessee whose assessment was completed u/s. 143(3) and the AO in that case desired to reopen after four years, so the case and decision thereof have no bearing on the case in hand. We find considerable force in the said contention of the Ld. DR and we find that the order of Hon’ble Gujarat High Court has got no relevance in the present case. We note that Hon’ble P&H High Court in CIT Vs.