2017 (6) TMI 1383 - AT - Income Tax

Procedure when assessee claims identical question of law is pending before High Court or Supreme Court u/s 158A - Tribunal disallowing depreciation on the block of assets still in existence disregarding the provisions of section 32 of the Act - Whether Tribunal is justified recasting the audited book results for the purpose of computation of book profit under section 115JB? HELD THAT - As per section 158A of the Act, assessee has filed the appeal for assessment years 2006-07 and 2007-08 before the Hon ble Bombay High Court. Assessee has given undertaking in form No.8, rule 16. Therefore, all these matters are restored to the file of AO and the AO is directed to decide the appeals as per the outcome of the Hon ble Bombay High Court. In the result, all the appeals are restored to the file of the AO and AO is directed to decide the matters as per the decision stated above.

Summary

Issues:
- Disallowance of depreciation on assets not in existence
- Disallowance of book depreciation for MVAT purposes
- Pending matters before Hon'ble Bombay High Court
- Application of Section 158A of the Income Tax Act

Analysis:
1. The appeals by the Revenue and cross-appeal by an assessee were against different orders of the Commissioner of Income Tax (Appeals) regarding the disallowance of depreciation on assets not in existence. The Tribunal confirmed the disallowance as the assets were not on the balance sheet, leading to disallowance of depreciation under normal Income Tax provisions. However, for the assessment year 2009-10, the assessee provided evidence of asset existence and balance sheet appearance, resulting in deletion of the adjustment made to book profit by the Ld. CIT(A).

2. Questions raised before the Hon'ble Bombay High Court included the correctness of disallowing depreciation on existing assets and recasting audited book results for computing book profit under section 115JB of the Act. Similar questions were pending for multiple assessment years. The assessee requested restoration of the matter back to the AO for decision based on the High Court's decision for other assessment years.

3. Section 158A of the Income Tax Act was invoked by the assessee, claiming identical questions of law pending before the High Court. The Tribunal found substantial law framed by the High Court, leading to the application of Section 158A. Consequently, the matters were restored to the AO for decision in line with the High Court's decision.

4. As per Section 158A, the appeals for the assessment years 2006-07 and 2007-08 were filed before the Hon'ble Bombay High Court, with the assessee providing the required undertaking. Thus, all matters were remanded to the AO for decision as per the High Court's outcome. Ultimately, all appeals were restored to the AO for further proceedings based on the decision of the Hon'ble Bombay High Court.

In conclusion, the judgment focused on the disallowance of depreciation, pending matters before the High Court, and the application of Section 158A of the Income Tax Act to ensure uniformity in decisions across assessment years based on High Court rulings.