9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (3) TMI 426 - AT - Income TaxRevision u/s 263 - assessee has claimed additional depreciation on plant and machinery u/s 32 (1)(iia) which was not verified by the AO during the course of assessment proceedings - whether activity of mining and extraction of coal amounts to manufacturing activity? - Held that - As relying on CIT vs. G.S Atwal & Co. (2001 (2) TMI 32 - CALCUTTA High Court) there remains no ambiguity that the activity of assessee i.e. mining and extracting of coal is manufacturing activity. Therefore, assessee is very much entitle for additional depreciation u/s 32(1)(iia) of the Act. It was also observed that the issue about the activities of assessee was duly examined by AO during the course of assessment proceedings as evident from the submission of Ld. AR discussed in the preceding paragraphs. Therefore, in our considered view AO allowed the claim of assessee for the additional depreciation after necessary verification and application of his mind. Similarly, we find that Ld. Pr. CIT in his impugned order u/s 263 has held that AO has not verified the necessary details of the plant and machinery purchased during the year. In this regard, we find that the AO has raised the queries regarding the addition of fixed asset which are duly responded by the assessee during the course of assessment proceeding. In view of above, we feel that the assessment order u/s 143(3) of the Act was passed duly after due examination of the records for the addition of plant and machinery as well as activities carried on by assessee - Decided in favour of assessee
Issues Involved:
1. Legality of the order passed by the Ld. Pr. Commissioner of Income Tax (Pr. CIT) under Section 263 of the Income Tax Act, 1961. 2. Justification of setting aside the assessment order by the Ld. Pr. CIT. 3. Determination of whether the assessment order was erroneous and prejudicial to the interests of the revenue. 4. Verification of additional depreciation on Plant & Machinery by the Assessing Officer (AO). Issue-wise Detailed Analysis: 1. Legality of the Order Passed by the Ld. Pr. CIT under Section 263 of the Income Tax Act, 1961: The assessee challenged the order of the Ld. Pr. CIT passed under Section 263 of the Income Tax Act, 1961, arguing that it was bad in law and facts. The Ld. Pr. CIT had observed that the AO did not verify the claim of additional depreciation on plant and machinery amounting to ?12,69,860/- during the assessment proceedings, rendering the order erroneous and prejudicial to the interests of the revenue. 2. Justification of Setting Aside the Assessment Order by the Ld. Pr. CIT: The Ld. Pr. CIT set aside the assessment order, directing the AO to reframe the assessment after proper verification. The Ld. Pr. CIT stated that the AO did not examine whether the additional plants were purchased within the stipulated period and if they were used for manufacturing or production. The Ld. Pr. CIT emphasized the need for verification of ownership, nature of assets, and the period of usage before allowing the claim of additional depreciation. 3. Determination of Whether the Assessment Order was Erroneous and Prejudicial to the Interests of the Revenue: The Ld. Pr. CIT held that the AO's order was erroneous and prejudicial to the interests of the revenue due to inadequate scrutiny and incorrect appreciation of facts. The Ld. Pr. CIT noted that the AO did not verify the details of the plant and machinery purchased and their usage in the manufacturing process. The Ld. Pr. CIT referred to judicial precedents, including CIT vs. G.S. Atwal & Co., which established that mining and extraction activities qualify as manufacturing, thus entitling the assessee to additional depreciation. 4. Verification of Additional Depreciation on Plant & Machinery by the AO: The assessee argued that the AO had conducted necessary enquiries during the assessment proceedings, as evidenced by the replies to notices issued under Section 142(1) of the Act. The AO had raised specific queries regarding the nature of business activities and details of fixed assets, which were duly responded to by the assessee. The assessee provided details of additions to fixed assets and argued that the AO allowed the claim after proper verification. Conclusion: The tribunal concluded that the AO had indeed examined the relevant details during the assessment proceedings and allowed the claim of additional depreciation based on the material facts presented. The tribunal held that the assessment order was passed after due examination and was not erroneous or prejudicial to the interests of the revenue. Consequently, the tribunal set aside the order passed by the Ld. Pr. CIT under Section 263, allowing the assessee's appeal. Order: The assessee's appeal was allowed, and the order pronounced in the open court on 28/02/2018.
|
