9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (10) TMI 2013 - AT - Income TaxRevision under section 263 - the assessee has claimed depreciation at 60% on computer equipments, UPS and SAP instead of depreciation at the rate of 15% on computer peripheral and at the rate of 25% on SAP licence, and and that the assessee has claimed additional depreciation of ₹ 23.35 lakhs on fire safety equipments, weigh scale, printer, storage tank etc - Held that - The Hon ble Delhi High Court in the case of BSES Yamuna Power ltd. (2012 (12) TMI 118 - ITAT DELHI) has held that depreciation at the rate of 60% will be admissible on computer peripherals. Prior to this decision, there are large number of orders at the end of the ITAT, and the ITAT is unanimous in its approach on this issue. Thus, a possible view can be taken by the AO with regard to the admissibility of depreciation on UPS, scanner etc. at the rate of 60%. It is one of the possible views, which the AO has taken. As far as the depreciation at the rate of 60% allowed to the assessee on SAP licence is concerned, we are of the view that the AO has investigated the issue and took an opinion that it might have not been reflected specifically in the assessment order. If the ld.Commissioner has a different opinion on this issue, then it would become a debatable one. According to the assessee, in various judgements, it has been held that the software expense is to be allowed as revenue expenditure. Considering the nature of its debatable-ness, we are of the view that the assessment order cannot be branded as an erroneous order on this issue. The assessee as an entity ought to be engaged in the manufacturing activity. It ought to have installed plant & machinery. It is not necessary that new machinery should be part of the manufacturing activity. The additional deprecation will be admissible. This also to be termed as debatable issue and the ld.AO has taken a view of this aspect, which could not be subject to action under section 263. The AO has invited the explanation of the assessee, gone through the details submitted by it, and thereafter, allowed the depreciation including additional depreciation as per law. His view may not get approval from the point of view of the ld.Commissioner, but, the opinion of the AO is also a possible view, and therefore, no action under section 263 can be justified. On due consideration of these facts and circumstances, we allow the appeal of the assessee, and quash the order passed by the ld.Commissioner under section 263 of the Act. - Decided in favour of assessee.
Issues Involved:
1. Validity of the Principal Commissioner of Income-Tax's action under section 263 of the Income Tax Act. 2. Correctness of the depreciation rates applied to computer equipment, UPS, and SAP. 3. Eligibility for additional depreciation on fire safety equipment, weigh scale, printer, and storage tank. Analysis: Issue 1: Validity of the Principal Commissioner of Income-Tax's action under section 263 of the Income Tax Act The appellant contended that the Principal Commissioner erred in invoking section 263, which allows for the revision of an assessment order if it is erroneous and prejudicial to the interests of the revenue. The Principal Commissioner issued a show cause notice and subsequently set aside the assessment order, directing a fresh assessment. The appellant argued that the Commissioner should have limited the revision to the specific issues identified, rather than setting aside the entire assessment order. The Tribunal agreed, stating that the assessment order should be set aside only concerning the two specific issues identified by the Commissioner. Issue 2: Correctness of the depreciation rates applied to computer equipment, UPS, and SAP The Commissioner argued that the assessee incorrectly claimed depreciation at 60% for computer equipment, UPS, and SAP, instead of the prescribed rates of 15% for computer equipment and UPS, and 25% for SAP. The appellant countered that the Assessing Officer (AO) had already examined these claims during the assessment process and had taken a permissible view supported by various judicial precedents. The Tribunal noted that the AO had indeed issued a show cause notice and considered the details provided by the assessee. Citing judicial precedents, the Tribunal held that depreciation at 60% for computer peripherals is a permissible view. Thus, the AO's decision could not be deemed erroneous or prejudicial to the revenue. Issue 3: Eligibility for additional depreciation on fire safety equipment, weigh scale, printer, and storage tank The Commissioner also contended that the assessee's claim for additional depreciation on these items was erroneous. The appellant argued that the AO had examined this claim and that judicial precedents supported the allowance of additional depreciation. The Tribunal referred to a decision by the Gujarat High Court, which held that additional depreciation is allowable if the assessee is engaged in manufacturing, irrespective of whether the new machinery is directly involved in the manufacturing process. The Tribunal concluded that the AO's decision to allow additional depreciation was a possible view and could not be subjected to revision under section 263. Conclusion: The Tribunal quashed the order passed by the Principal Commissioner under section 263, allowing the appeal of the assessee. The Tribunal held that the AO had taken permissible views on the issues of depreciation and additional depreciation, and therefore, the assessment order could not be deemed erroneous or prejudicial to the interests of the revenue.
|
