2023 (4) TMI 813 - AT - Income Tax

Assessment of trust - Depreciation claim - show cause notice called for the information from the assessee so as to prove that whether the assessee has in earlier claimed the capital expenditure on which the depreciation is claimed and assessee has not filed any details the same was denied - HELD THAT - AR was not sure whether the reply of the said information was filed or not. As regards the alternate claim of the assessee so as to allow the claim of capital expenditure incurred in the current year as application of income, we concur with the arguments of the ld. DR that even the ld. CIT(A) cannot allow the alternative plea without submitting any details before him. Here also ld. AR failed to demonstrate as to whether this pleas was supported with any other details / information before the ld. CIT(A) or not. In absence of these information, we do not find any faults in the finding of the lower authorities. However, we have acceded the request of the ld. AR of the assessee to allow one more opportunity to the assessee so as deal the case of the assessee on its merits and therefore, in the interest of justice we consider the request of the assessee and restore the matter to the file of the assessing officer to decide the issue in accordance with law. Appeal of the assessee is allowed for statistical purpose.

Issues Involved:
1. Jurisdiction and validity of additions and disallowances.
2. Disallowance of depreciation amounting to Rs. 54,63,625/-.
3. Alternative claim for the entire cost of acquisition of capital assets amounting to Rs. 1,33,01,256/-.
4. Charging of interest under sections 234B, 234C, and 234D of the Income Tax Act, 1961.

Summary of Judgment:

1. Jurisdiction and Validity of Additions and Disallowances:
The assessee challenged the jurisdiction and the factual basis of the additions and disallowances made in the order dated 19.11.2018 under section 143(3) of the Income Tax Act, 1961.

2. Disallowance of Depreciation Amounting to Rs. 54,63,625/-:
The assessee claimed depreciation of Rs. 54,63,625/- as an application of income. The AO disallowed this claim citing Section 11(6) of the Income Tax Act, 1961, which prohibits the deduction of depreciation if the cost of the asset has already been claimed as an application of income. The CIT(A) upheld this disallowance. The assessee argued that the cost of the assets was never claimed as an application of income in any previous year, supported by the computation of total income and depreciation charts from earlier years. The Tribunal found that the assessee did not provide sufficient evidence to the AO or CIT(A) to support this claim and thus upheld the disallowance but allowed the assessee another opportunity to present the necessary evidence.

3. Alternative Claim for the Entire Cost of Acquisition of Capital Assets Amounting to Rs. 1,33,01,256/-:
The assessee alternatively claimed that the entire cost of acquisition of capital assets during the year should be allowed as an application of income. The CIT(A) rejected this claim due to a lack of documentary evidence. The Tribunal noted that the assessee failed to provide the necessary details to support this claim and thus upheld the CIT(A)'s decision but allowed the assessee another opportunity to present the necessary evidence.

4. Charging of Interest Under Sections 234B, 234C, and 234D:
The charging of interest under sections 234B, 234C, and 234D was deemed consequential and dependent on the outcome of the other issues.

Conclusion:
The Tribunal restored the matter to the file of the assessing officer to decide the issue in accordance with the law, giving the assessee another opportunity to present the necessary evidence. The assessee was directed to pay a cost of Rs. 1,000/- to the Prime Minister's Relief Fund for their casual approach. The appeal was allowed for statistical purposes.

← Previous Next →