2018 (12) TMI 1336 - HC - Income Tax

Entitlement to depreciation - Admission of additional evidence by CIT-A - Held that - Assessee had filed documents before the AO to show that production in the second unit had commenced on or before 30.09.2009, but the same were ignored. CIT(Appeals) had verified this fact and the order passed by him specifically states that the documents filed by the assessee were available in the file of the AO. Referring to the documents, the CIT (Appeals) had observed that the assessee had produced evidence of payment of excise duty, sales tax and issue of statutory sales tax forms to the suppliers to show and establish that production in the second unit had commenced on 24.08.2009. Hence, the assessee was entitled to depreciation for the entire year. These findings are factual. There is no ground or reason to hold that the said findings were wrong or incorrect. No substantial question of law. Deduction under Section 43B - Held that - The second issue does not arise from the order of the Tribunal as this issue was not raised by the Revenue in the appeal preferred by them before the Tribunal against the order of the Commissioner of Income-Tax (Appeals).

Summary

Issues involved:
1. Admission of additional evidence under Rule 46A (3) of the Income Tax Rules, 1962.
2. Deduction under Section 43B of the Income Tax Act, 1961.

Analysis:

Issue 1: Admission of additional evidence under Rule 46A (3) of the Income Tax Rules, 1962
The Tribunal upheld the Commissioner of Income-Tax (Appeals)'s factual finding that the respondent-assessee had submitted documents to prove the commencement of production in the second unit before 30.09.2009. The Commissioner verified the documents and noted that they were available in the Assessing Officer's file. The documents evidenced payment of excise duty, sales tax, and issuance of statutory sales tax forms, indicating the commencement of production on 24.08.2009. Consequently, the respondent-assessee was deemed eligible for depreciation for the entire year. The Court found these findings to be factual and declined to entertain the issue further, stating that no substantial question of law arose for consideration.

Issue 2: Deduction under Section 43B of the Income Tax Act, 1961
The Court noted that the second issue regarding deduction under Section 43B did not arise from the Tribunal's order. The Revenue had not raised this issue in their appeal to the Tribunal against the Commissioner of Income-Tax (Appeals)'s order. As a result, the Court dismissed the appeal, emphasizing that the second issue was not within the scope of the Tribunal's consideration and, therefore, could not be addressed in the current appeal.

In conclusion, the High Court dismissed the appeal by the Revenue, upholding the Tribunal's decision on the first issue and clarifying that the second issue was not within the appeal's purview.