2014 (4) TMI 1045 - AT - Income Tax

Disallowance under section 43B - disallowance of depreciation - Held that - Actual grievance of the appellant is not on merits but on the legal issue regarding limitations on the powers of the CIT(A) on the ground that post 1st June 2001, it is no longer open to the Commissioners (Appeals) to remit the matter to the file of the Assessing Officer, whereas in the instant case, learned CIT(A) has done precisely that. While appellant is right in principle but that aspect of the matter is no longer of any practical significance because neither the assessee has raised any grievances on merits nor such a grievance as is raised before us, even if upheld, will affect the powers of this Tribunal in remitting the matter to the file of the Assessing Officer. Revenue thus derives no practical advantage from raising this issue before us. - as also bearing in mind entirety of the case, we see no reasons to interfere in the matter. In any event, even on merits, the issue regarding merits of impugned additions is covered, in favour of the assessee, by an order of this bench. The technical infirmity, as pointed out in the grounds of appeal, is of no practical significance so far as impugned additions are concerned. Therefore, both the appeals filed by the Revenue are found to have no merit - Decided against Revenue.

Summary

Issues involved:
Challenging correctness of the consolidated order for assessment under section 143(3) of the Income Tax Act, 1961 for Assessment Years 2006-07 & 2007-08.

Detailed Analysis:

Issue 1: Disallowance under section 43B of the Income Tax Act, 1961
The Revenue challenged the order of the ld. CIT(A) directing the AO to ascertain the amounts of electricity duty and provident fund, and allowing relief. The Departmental Representative argued that the CIT(A) exceeded authority by setting aside the assessment, a power taken away by the Finance Act, 2001. The Counsel for the assessee argued that the CIT(A) considered a similar relief granted in a previous year and cited a favorable order by the ITAT, Agra Bench. The Tribunal upheld the CIT(A) order, emphasizing compliance with section 43B for deductions based on actual payment before the due date of filing the return. Citing legal precedents, the Tribunal dismissed the Revenue's appeal, finding no merit in challenging the disallowance under section 43B.

Issue 2: Disallowance of Depreciation
The Revenue contested the CIT(A)'s direction to allow depreciation after examining the computation of income. The Counsel for the assessee referred to a previous order where a similar relief was granted and upheld by the ITAT, Agra Bench. The Tribunal found no infirmity in the CIT(A)'s decision, as the assessee provided details of assets and liabilities, claiming depreciation at the lowest rate. The Tribunal dismissed the Revenue's appeal, stating that the CIT(A) rightly granted relief to the assessee on the issue of depreciation. The Tribunal concluded that the technical infirmity raised by the Revenue had no practical significance concerning the impugned additions.

In the final judgment, the Tribunal noted that the Revenue's grievance was more on a legal issue regarding the powers of the CIT(A) post-2001, rather than on merits. However, the Tribunal found no reasons to interfere in the matter, as the issue of remitting the matter to the Assessing Officer did not impact the Tribunal's powers. Ultimately, both appeals filed by the Revenue were dismissed, with the Tribunal finding no merit in the challenges raised.

This detailed analysis of the judgment highlights the key issues of disallowance under section 43B and disallowance of depreciation, along with the arguments presented by the parties and the Tribunal's decision based on legal precedents and factual considerations.