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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI D.S. SUNDER SINGH
आदेश /O R D E R
PER N.R.S. GANESAN, JUDICIAL MEMBER:
This appeal of the Revenue is directed against the order of the Commissioner of Income Tax (Appeals) – 3, Coimbatore, dated 15.03.2016 and pertains to assessment year 2011-12.
There is a delay of 3 days in filing the appeal. We heard both the parties. The delay was due to transmission of appeal by post. Therefore, the delay of 3 days is condoned and appeal is admitted.
Shri Shiva Srinivas, the Ld. Departmental Representative, submitted that the assessee claimed depreciation at the rate of 80% on the windmill in the original return. However, in the revised return, the assessee claimed depreciation at the rate of 15%. Both the original return and revised were filed after the due date prescribed under Section 139(1) of the Income-tax Act, 1961 (in short "the Act"). The Assessing Officer found that for the assessment year 2010-11, 44 units of electricity was generated and the assessee has not claimed any depreciation on the windmill. Moreover, the assessee has not exercised any option for claiming higher depreciation on the windmill. Since the option was not exercised by the assessee with regard to higher rate of depreciation relating to windmill, the Assessing Officer disallowed the claim of the assessee for depreciation. On a query from the Bench, whether any form is prescribed for exercising option for claiming depreciation at the higher rate? The Ld. D.R. submitted that the assessee has to file copies of the audited statement before the Assessing Officer.
Therefore, according to the Ld. D.R., the CIT(Appeals) is not justified in allowing the claim of the assessee.
On the contrary, Shri R. Kumar, the Ld.counsel for the assessee, submitted that the only issue arises for consideration is determination of rate of depreciation for the windmill. The assessee claimed 80%. However, the Assessing Officer allowed only 7.69%.
The Assessing Officer disallowed the claim of the assessee on the ground that the assessee has not exercised the option to claim higher depreciation. The Assessing Officer has also found that the assessee has not filed the return of income under Section 139(1) of the Act. The assessee, however, filed the audited statement disclosing the claim of depreciation. According to the Ld. counsel, in the absence of any specific form prescribed under the Income-tax Act, the claim of depreciation in the audited statement would amount to exercising the option.
Referring to the judgement of Madras High Court in KKSK Leather Processors (P) Ltd. v. ITO in 369 ITR 500, the Ld. counsel for the assessee submitted that in the absence of any prescribed procedure for exercising the option, the claim of the assessee in the return of income along with audit report would definitely amount to exercising the option. In the case before us, according to the Ld. counsel, there was a delay in filing the return of income. However, the audited statement was filed within the prescribed time.
Therefore, according to the Ld. counsel, the CIT(Appeals) has rightly allowed the claim of the assessee.
We have considered the rival submissions on either side and perused the relevant material available on record. The only issue arises for consideration is the claim of depreciation on the windmill.
The Assessing Officer disallowed the claim of the assessee on the ground that the assessee has not exercised any option for claiming higher depreciation. It is an admitted fact that the Income-tax Act does not prescribe any specific procedure or form for claiming higher rate of depreciation. The claim made by the assessee in the return of income and audited statement has to be taken as exercising option as found by the Madras High Court in KKSK Leather Processors (P) Ltd. (supra). It is not brought to our notice any provision in the Income-tax Act whereby the assessee has to file return of income within the time prescribed for claiming depreciation under Section 32 of the Act. In the absence of any specific provision in the Act, this Tribunal is of the considered opinion that the return filed by the assessee and the claim made in the audited statement has to be considered for exercising option. Though the return was filed belatedly, the assessee has claimed depreciation at higher rate. In those circumstances, this Tribunal is of the considered opinion that the CIT(Appeals) has rightly allowed the claim of the assessee by placing reliance on the judgement of Madras High Court in KKSK Leather Processors (P) Ltd. (supra) and also the decision of this Bench of the Tribunal in Ravi v. ACIT in I.T.A. No.2064/Mds/2008. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.
In the result, the appeal filed by the Revenue is dismissed.
Order pronounced on 28th October, 2016 at Chennai.