9911796707
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Issues:
1. Assessment order under section 263 challenged by assessee for allowing 100% depreciation on centering plates without proper examination. 2. Whether the AO's findings on the status of the firm and depreciation on centering plates were erroneous and prejudicial to the interests of Revenue. 3. Jurisdiction of CIT to revise AO's order on debatable issues. 4. Examination of factual aspects regarding depreciation on centering plates. Analysis: 1. The appeal was filed by the assessee against the CIT(A)'s order under section 263 of the Income Tax Act for the assessment year 1993-94. The assessee contended that the assessment order was challenged on the grounds that the AO erred in allowing 100% depreciation on centering plates without properly examining the claim. The assessee argued that the AO had raised specific queries during assessment, which were duly responded to with material evidence, leading to the allowance of the claim. The counsel emphasized that once the AO had adjudicated the issue after due consideration, it should not be revised under section 263 unless the CIT was aggrieved with the findings. Reference was made to relevant case laws to support this argument. 2. The Departmental Representative contended that the AO did not adequately examine the claim for 100% depreciation on steel centering plates. It was argued that the AO accepted the assessee's statements without proper scrutiny, and it was essential to determine whether individual centering plates constituted plant and machinery for depreciation purposes. Reference was made to a judgment remanding a similar issue back to the Tribunal for factual examination. The Departmental Representative asserted that the CIT had the authority to revise the AO's order on debatable issues if it was deemed erroneous and prejudicial to Revenue's interests. 3. Upon careful consideration, it was found that the issue of the firm's status was properly examined by the AO during assessment, as queries were raised and rectified with the filing of the certified copy of the partnership deed. The AO's findings on this matter were deemed correct as the procedural irregularity was rectified during assessment. However, concerning the claim for 100% depreciation on centering plates, it was noted that there was no specific discussion in the assessment order. The AO did not examine whether individual centering plates constituted plant and machinery eligible for depreciation. The Tribunal found the AO's findings on this issue to be erroneous and prejudicial to Revenue's interests, upholding the CIT's decision to set aside the AO's order and directing a reassessment in accordance with the law. 4. In conclusion, the appeal was partly allowed, with the Tribunal affirming the CIT's decision regarding the depreciation on centering plates while vacating the order on the issue of the firm's status. The judgment highlighted the importance of thorough examination and proper documentation in assessing claims for depreciation to ensure compliance with relevant legal provisions.
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