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Income Tax Appellate Tribunal, PUNE “A” BENCH : PUNE
Before: SHRI SATBEER SINGH GODARA & DR. DIPAK P. RIPOTE
Date of Hearing : 26.02.2024 Date of Pronouncement : 28.02.2024 ORDER PER SATBEER SINGH GODARA, J.M. : This assessee’s appeal for assessment year 2011- 2012, arises against the CIT(A)-2, Kolhapur, Kolhapur’s Order in appeal no.Kop/147/2015/16, dated 28.10.2015, involving proceedings u/s. 154 of the Income Tax Act, 1961 (in short “the Act”).
Case called twice. None appears at assessee’s behest. It is accordingly proceeded ex-parte.
The Revenue pleads the following substantive grounds in the instant appeal :
2 I.T.A.No.2730/PUN./2017 1. “On the facts and in the circumstances of the law, the CIT(A)-2, Kolhapur has erred in allowing additional depreciation for AY 2011-12 considering the fact that assessee has forgone such claim which was available to him for AY(s) 2006-07 to 2009-10; when, such claim is not allowed in the light of an Explanation 5 inserted by the Finance (No.2) Act, w.e.f 01/04/2002.
2. On the facts and in the circumstances of the law, the CIT(A)-2, Kolhapur, erred in not appreciating the legal position, that additional depreciation u/s.32(l)(iia) of the Act is allowed for the "only" year during which new machinery or plant acquired and installed, as well as, such claim of additional depreciation cannot be endorsed further to succeeding year(s).
On the facts and in the circumstances of the law, the CIT(A)-2, Kolhapur, erred in allowing the claim of additional depreciation on WDV ignoring the legal position, that such claim is allowed only on actual cost of new machinery or plant acquired and installed after the 31st day of March, 2005.
4. The appellant prays that the order of the CIT(A)-2, Kolhapur be vacated and that of the Assessing Officer be restored.
The appellant craves leaves to add, alter, amend, modify any of the grounds or raise any other ground at the time of 3 I.T.A.No.2730/PUN./2017 proceedings before the Hon'ble Tribunal which may please be granted.”
3. Dr. Patil vehemently submitted during the course of hearing that the CIT(A)'s herein has erred in law and on facts in reversing the Assessing Officer’s action disallowing the impugned additional depreciation relief to the assessee vide following detailed discussion :
4 I.T.A.No.2730/PUN./2017
We have given our thoughtful consideration to the Revenue’s pleadings as well as it’s foregoing vehement contentions and see no merit therein. This is for the precise reason that we are dealing with an instance of sec.154 rectification proceedings wherein the learned Assessing Officer had framed his sec.143(3) regular assessment on 07.01.2014 accepting the assessee’s depreciation as well as additional depreciation claims, as the case may be. This followed the Revenue Audit Party [“RAP”]’s objections that the Assessing Officer’s regular assessment had resulted in under-assessment of income qua the foregoing depreciation/additional
5 I.T.A.No.2730/PUN./2017 depreciation issue(s). This made the Assessing Officer to initiate sec.154 rectification vide notice to the assessee dated 09.06.2015. The Revenue could hardly dispute before us that the Assessing Officer’s rectification order herein dated 07.10.2015 went for a detailed discussion for the purpose of re-computing the assessee’s depreciation/additional depreciation claim(s) resulting in consequential disallowances; which in turn, stand reversed in the CIT(A)'s lower appellate findings.
This leaves Revenue aggrieved.
5. All these foregoing clinching facts sufficiently indicate that the Assessing Officer’s impugned action invoking sec.154 rectification for the purpose of carrying-out a detailed exercise of re-computing the assessee’s depreciation/ additional depreciation could hardly be held as sustainable in law in principle in light of TS Balram, ITO vs. Volkart Bros. [1971] 82 ITR 50 (SC). Their lordship’s have settled the law long back that the purpose of sec.154 rectification is to deal with the apparent mistakes on record than carrying-out detailed roving enquiries. This is indeed coupled with the fact that the CIT(A)'s has already termed the impugned rectification as a debatable one which further strengthens the assessee’s stand against the applicability of sec.154 proceedings. We thus see no reason to accept the Revenue’s instant sole substantive grievance. Ordered accordingly.
6 I.T.A.No.2730/PUN./2017
This Revenue’s appeal is dismissed in above terms.
Order pronounced in the open Court on 28.02.2024.