2018 (5) TMI 438 - HC - Income Tax

Rectification of mistake u/s 154 - claim of depreciation - Held that - As perused the order impugned in which the ITAT held that the assessee is having two vehicles which were purchased and used only for the transportation and against the said service assessee firm charged transportation charges from customers in their sale bills as it is evident from the ledger account submitted that transport outward and inward have been maintained commonly and net balance of ₹ 4,48,172/- has been shown in profit and loss account as an expense. The assessee is justified in charging the depreciation as claimed because no mistake has been pointed out by the AO himself and as per Section 154(2) of the Act the income tax authority can rectify the mistake apparent from the records on its own and in this case, the order has been passed under Section 154 rectifying the mistake on the basis of objection by the audit party which is not an income tax authority as per law. No error has been committed by the learned ITAT.

Summary

Issues:
Challenge to order under Section 154 of the Income Tax Act, 1961 for assessment year 2009-10.

Analysis:
The appeal was filed challenging the judgment passed by the Income Tax Appellate Tribunal, Jodhpur Bench, for the assessment year 2009-10. The respondent assessee declared an income of ?8,29,678 for that year. The revenue audit raised an objection regarding the depreciation allowed on certain vehicles, which was rectified under Section 154 by reducing the depreciation amount. The CIT (A) upheld this decision. Subsequently, the assessee appealed to the ITAT, which allowed the appeal and set aside the order passed under Section 154. The appellant contended that no error was committed by the assessing officer or CIT (A) in allowing reduced depreciation. However, the ITAT found that the vehicles were used for transportation services, and the depreciation claimed was justified as the AO did not identify any mistake in the claim. The ITAT also noted that the audit party's objection was not from an income tax authority as per law. The High Court concurred with the ITAT's decision, stating that no substantial question of law arose, and therefore dismissed the appeal.

In conclusion, the High Court upheld the ITAT's decision, emphasizing that the depreciation claimed by the assessee was justified based on the use of vehicles for transportation services. The Court found no error in the ITAT's judgment and ruled that no substantial question of law was raised in the appeal. Consequently, the appeal challenging the order under Section 154 of the Income Tax Act for the assessment year 2009-10 was dismissed.