9911796707
Advanced Search 
TMI Blog2018 (3) TMI 426X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment to the AO for reframing the same. 3) For that upon facts and circumstances of the case the Ld CIT was not justified in setting aside the assessment order of the AO which was neither erroneous nor prejudicial to the interests of the revenue. 4) For that upon the facts and circumstances of the case the Ld. AO had allowed additional Depreciation on Plant & Machinery after proper verification and forming an opinion as such the order of the AO cannot be said to be erroneous. 5) For that any other ground or grounds which may be urged at the time of hearing." 3. Sole issue raised by assessee in this appeal is that Ld. Pr. CIT u/s 263 of the Act erred in holding the order of Assessing Officer passed u/s 143(3) of the Act as erroneous in so far as prejudicial to the interest of Revenue. 4. Briefly stated facts are that assessee is a private limited company and engaged in business of mining and sale of coal. The assessee filed its return of income electronically dated 27.09.2011 declaring total income of Rs.22,33,67,402/- only. Subsequently, the case was selected under scrutiny u/s 143(3) on the basis of CASS module. Accordingly, notices u/s 143(2)/142(1) of the Act were i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In my view, such plant & machinery would have been verified to come to a valid conclusion, before allowing the assessee's claim. Besides, the number of days used was also another aspect to be questioned and needed to be found out by the AO to accept such a claim. In my case, the claim certainly had not merited for mechanical non-questioning. 11. Much as I would appreciate that the A/R has brought to my notice the settled position of law that mining would stand on the same footing as manufacture, the non-questioning about the claim attributable to such a judicial view and the non-examination of the same have definitely made the AO's order erroneous. 12. The A/R is well within his rights to defend the assessee's claim (although a note in the Assessee's accounts or a not in the assessment order would have saved the whole lot of botheration) but he, in my opinion, is not entitled to certify the correctness of the Assessing Officer's inaction now, especially something what the AO had not evidently questioned nor examined during the assessment proceedings. 13. In the interest of justice therefore, I hereby set aside the impugned assessment order with a direction to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act dated 10.10.2013 where the question raised by AO as under:- "3. Please state in brief business activities performed during the previous year. XXXXXXXXXXXXXXXX 5. Balance Sheet XXXXXXXXXX iii) Fixed Assets Please file details of fixed assets along with production of evidence of purchase and put to use in respect of new assets acquired during the year. Ld. AR further submitted that the reply of the above notices, were duly made by the assessee vide letter dated 27.02.2013 and 21.10.2013 respectively. The reply of assessee dated 27.02.2013 in response to the notice issued u/s 142(1) of the Act vide dated 22.2.2013 stand as under:- "1) ..... 2) Brief note on activities of business is enclosed as Annex B XXXXXXXXXXXXXXXXXXXXXXX 12) Details of addition / deletion of fixed assets is enclosed as Annex J" The reply of the assessee vide letter dated 21.10.2013 in response to the notice issued u/s 142(1) of the Act vide dated 10.10.2013 stand as under:- "1)... ... 2)...... 3) Brief note on activities of business had already been submitted vide letter dated 27/02/2013 as Annexure-B of the submission dated 27/02/2013 XXXXXXXXXXXXXXXXXX 8) Deta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial to the interest of revenue by the ld. Pr. CIT u/s 263 of the Act. As per the notice issued u/s 263 of the Act it was alleged that the activity of the assessee i.e. mining and extracting of coal is not manufacturing activity. Therefore assessee is not eligible for additional depreciation. But the Ld. Pr. CIT in his order u/s 263 held that AO was supposed to verify the facts as detailed under:- 4. The points that were supposed to be verified by the AO, in the case of a complete scrutiny under CASS were: (i) Ownership, Nature of Asset, if the same were meant for manufacturing & User of such additional assets (ii) Period of user (iii) Whether the assessee company was engaged in the business of manufacture or production of any article or thing. 5. I was of the view that since the AO had not even looked into this claim at all, no limb of expected verification had been done and thus the assessment had been rendered erroneous and since the tax impact was to the tune of Rs.4,21,816/- the assessment had caused obvious prejudice to the interest of Revenue." From the allegation raised in the notice u/s 263 of the Act, it was observed that the order of AO was considered as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be allowed to the assessee. [Paras 17 & 18]" From the above proposition, we find that from there remains no ambiguity that the activity of assessee i.e. mining and extracting of coal is manufacturing activity. Therefore, assessee is very much entitle for additional depreciation u/s 32(1)(iia) of the Act. It was also observed that the issue about the activities of assessee was duly examined by AO during the course of assessment proceedings as evident from the submission of Ld. AR discussed in the preceding paragraphs. Therefore, in our considered view AO allowed the claim of assessee for the additional depreciation after necessary verification and application of his mind. Similarly, we find that Ld. Pr. CIT in his impugned order u/s 263 of the Act has held that AO has not verified the necessary details of the plant and machinery purchased during the year. In this regard, we find that the AO has raised the queries regarding the addition of fixed asset which are duly responded by the assessee during the course of assessment proceeding. The query and the replies made by the assessee have already been discussed in the preceding paragraph. Therefore, we are inclined not to repeat the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
