2018 (6) TMI 86 - AT - Income Tax

Depreciation claim allowability - assets were utilised for less than 180 days - Held that - As submitted on behalf of the assessee before the CIT(Appeals), depreciation at 50 per cent. of the normal rate only was claimed by it on the addition made to the power plant during the year under consideration after October 1, 2007 since the said assets were put to use for less than 180 days during the year under consideration. Keeping in view this specific claim made by the assessee, the learned Commissioner of Income-tax (Appeals) directed the Assessing Officer to verify the same and allow appropriate relief to the assessee. In our opinion the impugned order of the learned Commissioner of Income-tax (Appeals) on this issue is quite fair and reasonable - Decided against revenue

Summary

Issues Involved:
1. Disallowance of excess depreciation on power plant.

Analysis:
1. The Revenue appealed against the deletion of disallowance of excess depreciation on the power plant by the Commissioner of Income-tax (Appeals). The Revenue challenged the action of the Commissioner in allowing depreciation at 100% instead of 50% for assets used for less than 180 days. The delay of six days in filing the appeal was condoned by the Tribunal due to sufficient cause shown by the Revenue.

2. The assessee, a manufacturing company, filed its return declaring a total income of &8377;23,18,85,114. The Assessing Officer originally determined the total income at &8377;28,02,94,898, making certain additions. The Commissioner found an error in allowing 100% depreciation on power plant additions used for less than 180 days, directing a de-novo assessment. The subsequent assessment by the Assessing Officer restricted the depreciation claim to &8377;98,18,225, resulting in an addition to the total income.

3. The assessee appealed the assessment, highlighting that only 50% depreciation was claimed on power plant additions used for less than 180 days. The Commissioner directed the Assessing Officer to verify and delete the excess disallowance. The Tribunal found the Commissioner's order fair, as it allowed an opportunity for verification before granting relief. The Tribunal upheld the Commissioner's decision, dismissing the Revenue's appeal.

4. The Tribunal concluded by dismissing the Revenue's appeal, affirming the Commissioner's order. The decision was pronounced on 5th January 2018.