2023 (11) TMI 845 - AT - Income Tax

Revision u/s 263 - Excess depreciation on the tipper (goods vehicle) which are used for delivery of stone to the party - PCIT supposed to allow the claim @ 15% as against 30% allowed by AO - HELD THAT - The assessee is running the business since long. The assessee claimed the depreciation in two blocks; i) @ 15% and another @ 30%. On that basis the assessment was completed in earlier years and the depreciation was duly accepted by the ld. AO. The balance and the chart of depreciation was duly submitted before the ld. AO during assessment proceeding. The assessee also in revisional proceeding explained before the PCIT about the variation of rate of depreciation in two blocks. The rate of depreciation was duly supported by the Income Tax Rule 1962 and also it is duly covered in the case of Bharat Carriers Ltd. 2022 (5) TMI 1599 - ITAT CUTTACK So, there is no ambiguity for accepting the depreciation @ 30% for tipper which used in the assessee s business for hiring for transporting the goods. We find that the assessment order is not at all erroneous and prejudicial to the interest of revenue. Assessee appeal allowed.

Summary

Issues involved:
The appeal against the order of the Principal Commissioner of Income-1, Amritsar, passed under section 263 of the Income-tax Act, 1961 for assessment year 2017-18, involving delay in filing, initiation of proceedings without application of mind, assessment of depreciation on tipper, and setting aside the order for denovo assessment.

Delay in filing appeal:
The appeal was filed with a delay of 354 days, which was condoned by the Appellate Tribunal considering the reasonable cause of wrong advice by the consultant. The Tribunal relied on relevant legal precedents and the lack of strong objection from the Department.

Initiation of proceedings under section 263:
The Principal Commissioner was alleged to have erred in initiating proceedings under section 263 without proper application of mind, claiming that the Assessing Officer failed to conduct necessary inquiries or verifications before making the assessment. The Principal Commissioner set aside the assessment order, deeming it erroneous and prejudicial to the revenue's interest, leading to the appeal.

Assessment of depreciation on tipper:
The assessee, engaged in the stone crusher and tipper business, claimed depreciation on the tipper used for stone delivery at 30% and on trucks collecting stones at 15%. The Principal Commissioner, invoking section 263, challenged the depreciation claim on the tipper at 30%, suggesting it should be 15%. The Tribunal, after considering submissions and legal provisions, upheld the assessee's depreciation claim at 30%, citing compliance with the Income Tax Rule 1962 and relevant case law.

Setting aside the order for denovo assessment:
The Tribunal found no error in the assessment order regarding the depreciation claim on the tipper and concluded that it was not erroneous or prejudicial to the revenue's interest. Consequently, the order passed by the Principal Commissioner under section 263 was set aside and quashed, leading to the allowance of the assessee's appeal.

This judgment highlights the Tribunal's meticulous consideration of the issues surrounding the delay in filing, initiation of section 263 proceedings, assessment of depreciation on the tipper, and the subsequent setting aside of the order for denovo assessment, ensuring a fair and just outcome for the appellant.