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TMI Blog2015 (12) TMI 554X X X X Extracts X X X X X X X X Extracts X X X X ..... reciation and opening WDV of this year stood at ₹ 10,03,676. Since assessee claim of 50% depreciation on that vehicle was made in earlier year and as no action was undertaken by the Principal CIT to modify that, we are of the opinion that Principal CIT erred in directing the A.O. to restrict the depreciation to 15% in this year. This action of the Principal CIT, without considering the facts on record cannot be upheld, leave alone on legal principles. Coming to the other asset which was acquired during the year, it was TATA ACE purchased at cost of ₹ 2,93,444 and registered as ‘goods carriage LMV’ on 27.04.2009. This vehicle was put to use as per the provisions before 1st October, 2009 during the year. Thus, it is entitled fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not approve the action of the Principal CIT in exercising the jurisdiction under section 263 to set aside the validly completed assessment under section 143(3). In view of that, the order of Principal CIT u/s 263 is set aside and that of the A.O. is restored. - Decided in favour of assessee. - ITA.No.814/Hyd/2015 - - - Dated:- 9-10-2015 - SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER For The Assessee : Mr. A.V. Raghuram For The Revenue : Mr. Konda Ramesh, CIT-DR ORDER PER B. RAMAKOTAIAH, A.M. This is an assessee s appeal against the Order of Principal CIT-III, Hyderabad dated 18.03.2015. The only issue agitated in appeal is whether the action of the Principal CIT in assuming ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bad (2010) 35 SOT 50 (Hyd.), for the proposition that under the proviso to clause 3(b) to section 32(1), higher rate of 50% depreciation is available for new commercial vehicles acquired in view of Explanation given to the words Commercial Vehicle . It was submitted that the order of the A.O. was not erroneous or prejudicial to the interests of the Revenue. Accordingly, assessee objected the proceedings. 3.2 However, the Ld. Principal CIT opined that the A.O. failed in his basic duty to examine these aspects while completing the assessment. He relied on various case law on assuming jurisdiction and came to conclusion that an error has crept in the assessment order framed by the A.O. and accordingly set aside the assessment with a direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Ld. Counsel submitted that assessee has submitted the detailed depreciation schedules to the A.O. including the vouchers for purchase of assets and A.O. having examined the claim, disallowed part of excess depreciation on building, as can be seen from the assessment order. It was further submitted that Principal CIT was not correct in denying the depreciation when the Rules permit and referred to the Rules thereon. 5. The Ld. D.R. on the other hand, has relied on the order of the Principal CIT. 6. We have examined the rival contentions and paper book placed on record. As can be seen from the paper book, the assessee in fact has addressed a letter to the DCIT, Circle-3(1) in the course of assessment proceedings wherein it was cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as % of written down value (via) New commercial vehicle which is acquired on or after 1st day of January, 2009 but before first day of April, 2009 and is put to use before 1st day of April, 2009 for the purpose of business or profession. 50% 6.2. The period of 1st April, 2009 stands extended to 1st day of October, 2009 by virtue of 11th Amendment Rules 312 ITR (ST) 330. Thus, the Rule itself provides that new commercial vehicles are eligible for depreciation at 50%. Nowhere it is prescribed that they should be used in a business of running them on hire. As per notes to the Annexure-1, Item-6, commercial vehicle means Heavy Goods Vehicle , Heavy Passenger Vehicle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per the provisions before 1st October, 2009 during the year. Thus, it is entitled for depreciation at 50%. If at all, the Principal CIT would have to consider that there is an error, he should have restricted himself to the new vehicle acquired during the year. But he has considered restricting the amount even on the vehicle which was purchased in earlier year and on which depreciation was allowed at 50% in that year. In that regard, the action of the Principal CIT is not based on facts on record and no application of mind while considering the proceedings under section 263. 8. Now coming to the eligibility of depreciation at 50%, there is no dispute that under the Rules new commercial vehicles acquired between 01.01.2009 to 01.10.200 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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