2020 (3) TMI 720 - HC - Income Tax

Depreciation on electronic meters/energy meters - HELD THAT - As decided in BSES RAJDHANI POWER LTD. 2020 (1) TMI 464 - DELHI HIGH COURT set aside the matter to the file of the Assessing Officer to verify and allow the claimed depreciation at the rate of 80% on electronic meters/energy meters only after affording opportunity of being heard to the assessee. Higher depreciation on the bus bar chamber - AR submitted that these are devices through which connection from overhead line/underground cable is provided to the meters and the said device forms integral/inextricable part of the meters without which the meter cannot function. The authorities below have denied the claimed higher depreciation on this instrument on the basis that these are not energy saving device - HELD THAT - We set aside this matter to the file of the Assessing Officer to verify the above claim of the assessee that 'bus bar chamber' forms integral/inextricable part of the meters without which a meter cannot function and allow the depreciation thereupon accordingly after affording opportunity of being heard to the assessee. The ground No.1 of the appeal preferred by the assessee is accordingly allowed for statistical purposes

Issues:
1. Appeal filed challenging the order passed by the Income-Tax Appellate Tribunal for the Assessment Year 2006-07.
2. Whether the Assessing Officer exceeded jurisdiction in determining depreciation on electronic meters/energy meters.
3. Whether the Tribunal directed the Assessing Officer to act strictly in terms of the remand order dated 05.10.2015.
4. Whether the Tribunal ensured finality on outstanding issues as per the remand order.

Issue 1:
The present appeal challenges the order passed by the Income-Tax Appellate Tribunal for the Assessment Year 2006-07 under Section 260A of the Income Tax Act, 1961. The Tribunal remanded the matter to the Assessing Officer to determine the extent of electronic meters/energy meters that qualify as energy-saving devices for depreciation at the rate of 80%.

Issue 2:
The Tribunal found that the Assessing Officer exceeded jurisdiction by determining that electronic meters/energy meters were not energy-saving devices entitled to 80% depreciation. The Tribunal highlighted the need for the Assessing Officer to strictly comply with the remand order dated 05.10.2015, which directed a specific examination of the meters to ascertain their energy-saving features.

Issue 3:
The Tribunal was critiqued for not directing the Assessing Officer to address the real issues outlined in the remand order. Despite confirming the entitlement to high depreciation for energy-saving devices, the Tribunal failed to ensure a conclusive determination on the percentage of meters qualifying as energy-saving devices and the status of bus bars as integral parts of meters. Consequently, the Tribunal was instructed to remand the matter back to the Assessing Officer to address these outstanding issues.

Issue 4:
The Court acknowledged the Tribunal's decision on the entitlement to high depreciation for energy-saving devices but emphasized the need for the Tribunal to ensure finality on the outstanding issues specified in the remand order. The Court directed the matter to be remanded back to the Assessing Officer with strict compliance to the remand order dated 05.10.2015, focusing on specific paragraphs detailing the advanced features of the meters and the integral role of bus bars.

This detailed analysis of the judgment covers the key issues addressed by the High Court in the case, focusing on the challenges to the Assessing Officer's jurisdiction, compliance with the remand order, and the need for finality on outstanding issues related to depreciation on electronic meters/energy meters.

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