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TMI Blog2016 (10) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) TMI 92 - GUJARAT High Court ) rejects such a contention to invoke merger principle by holding that an assessment order does not have any independent existence after the same is subjected to appeal and it stands adjudicated. Our view in this backdrop of facts is that the assessment order in question sought to be revised does not have any independent existence. Even the issue on merit is rendered academic in view of CIT’s order directing the Assessing Officer to compute sec 80IAB deduction. The Revenue fails to point any distinction on facts or law. We accept assessee’s first argument in challenging the CIT’s order in question. Depreciation claim - Held that:- As far as the claim of depreciation on office equipments @ 15% is concerned, it is Assessee’s submission that the claim of depreciation at 15% on the office equipment which comprises of similar items as are in the present year, has been allowed by the A.O in earlier years in the assessment order passed u/s. 143(3) and those orders have attained finality. Claim of deduction u/s. 35D - Held that:- As far as the claim of deduction u/s. 35D is concerned it is not the case of the Revenue that the expenses have been incurr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to section 14A disallowance. 4. It transpires that the CIT thereafter formed reasons to believe the above stated regular assessment framed in assessee s case was erroneous causing prejudice to the interest of the Revenue. He issued section 263 show cause notice dated 20.07.2015 as under :- The undersigned, called for an examined the assessment records for A.Y. 2009-10. The assessment in this case was completed under section 143(3) r.w.s. 144C of the I.T. Act, 1961 on 15.05.2013 determining total income at ₹ 61,90,96,520/-. 1. It is seen that the assessee had invested ₹ 757.20 crore in exempted income and hence expenditure to the tune of ₹ 32,84,78,040/- was required to be disallowed u/s. 14A r.w.s. 8D of the Act. However, only an amount of ₹ 20,27,94,648/- was disallowed by the AO. The AO has completed the assessment without appreciating the provisions of section 14A. 2. It is further noticed that the assessee has claimed depreciation @ 15% (Rs.1,11,22,934/-) instead of depreciation @ 10% (Rs.74,15,309/-) on office equipment. It appears that the AO has completed the assessment without appreciating the provisions of section 32 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee is entitled to depreciation @ 10% amounting to ₹ 74,15,309/- only and the excess depreciation allowed of ₹ 37,07,655/- is required to be withdrawn and to be added to the total income of the assessee. Further, as per the amended provisions of section 35D(l)(ii) w.e.f. 1- 4-2009, the assessee is not entitled to deduction u/s 35D whereas the AO has allowed the deduction amounting to ₹ 14,74,336/-which requires to be withdrawn and added to total income of the assessee. Accordingly, it is held that the assessment order passed u/s 143(3) r.w.s. 144C dated 15.05.2013 was erroneous and prejudicial to the interest of revenue. Hence, the said assessment for A.Y.2009-10 is cancelled and the AO is directed to make fresh assessment of the total income of the assessee after taking into consideration the issues discussed above for the said assessment year after giving proper opportunity to the assessee as per law. 6. We have heard both the parties vehemently arguing in support of their respective stands. We come to the first issue of section 14A disallowance forming CIT s revision adjudication. This assessee had declared exempt income from dividends amounting to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure in question was incurred much prior to 01.04.2009. Learned Counsel at this stage invites our attention to this tribunal s decision in assessee s own case in ITA No.1362/Ahd/2015 decided on 29.10.2015 in immediately succeeding assessment year adjudicating both these latter issues against the revenue as follows:- 15. On the merits on the issue of amortization of cost of lease hold land, we find on perusing the computation of total income, which is placed at page 27 to 30 of the paper book, that the claim of Assessee of amortized value of lease hold land development was not u/s. 35D whereas ld. CIT in the order has held that the claim of Assessee was u/s. 35D and therefore in such a situation, A.O s order on that issue cannot be considered to be erroneous more so because there was no such claim u/s. 35D by Assessee. As far as the claim of depreciation on office equipments @ 15% is concerned, it is Assessee s submission that the claim of depreciation at 15% on the office equipment which comprises of similar items as are in the present year, has been allowed by the A.O in earlier years in the assessment order passed u/s. 143(3) and those orders have attained finality. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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