2021 (2) TMI 1019 - AT - Income Tax

Depreciation for assets classified under KILN-III - Whether CIT(A) has erred in law and on facts in admitting the assessee's additional evidence regarding the purchase of invoice (s) of the fixed asset in the nature of generator during the lower appellate proceedings and that too, in violation of Rule 46A of the Income Tax Rules.? - HELD THAT -Assessee's statement of depreciation as per Income Tax Act sufficiently revealing that it had placed not only the details of the corresponding fixed asset generator but also filed necessary particulars during the course of assessment as per the certificate coming from the paper book. We thus see no merit in Revenue's foregoing technical grievance under Rule 46 of the Income Tax Rules. The same is accordingly declined. - Decided against revenue.

Summary

Issues Involved:
Appeal against CIT(A)'s order admitting additional evidence on depreciation issue in violation of Rule 46A of Income Tax Rules.

Analysis:
The appeal by Revenue for AY 2011-12 stems from CIT(A)-1, Hyderabad's order under section 143(3) of the Income Tax Act, 1961. The main contention raised was the admission of additional evidence by the CIT(A) regarding the purchase of a generator and depreciation issue, allegedly violating Rule 46A of the Income Tax Rules. The CIT-DR argued that the CIT(A) erred in law and fact by allowing this evidence during the lower appellate proceedings. The appellant company had claimed additional depreciation on additions to Plant & Machinery under section 32(iia) of the Income Tax Act, 1961. Discrepancies in depreciation calculations were attributed to typographical errors during retyping and printing of the depreciation statement. The appellant maintained that the income tax return accurately reflected the depreciation claimed. The appellant's submissions emphasized maintaining complete and accurate books of accounts, including computerized records and vouchers, to support the contention that the errors were inadvertent and did not warrant rejection of books. The CIT(A) accepted the appellant's explanation, noting that the issues arose due to typing mistakes, and deleted the addition made by the Assessing Officer.

The authorized representative presented the appellant's statement of depreciation as per the Income Tax Act, supported by details of the generator purchase, to demonstrate compliance during the assessment process. The tribunal found no merit in the Revenue's argument regarding the violation of Rule 46 of the Income Tax Rules and dismissed the technical grievance. No additional arguments were raised during the proceedings, leading to the dismissal of the Revenue's appeal based on the findings related to the depreciation issue and the admission of additional evidence. The order was pronounced in open court on 16th February 2021.