ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE - 1,, KOLHAPUR vs. SADASHIVRAO MANDLIK KAGAL TALUKA SAHAKARI SAKHAR KARKHANA LTD,, KOLHAPUR

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.

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).

4. The appellant prays that the order of the CIT(A)-2, Kolhapur be vacated and that of the Assessing Officer be restored.

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 :

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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.

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Order pronounced in the open Court on 28.02.2024.