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TMI Blog2015 (9) TMI 1676X X X X Extracts X X X X X X X X Extracts X X X X ..... 86,40,279/-. Assessment under section 143(3) was framed on the assessee and disallowance on account of interest paid on capital work in progress was made under section 36(1)(iii) on account of fact that the assessee had shown an amount of Rs. 6,43,261/- as capital work in progress in the balance sheet. Thereafter reassessment proceedings were initiated for the reason that the assessee had opening capital work- in- progress of Rs. 12,17,65,666/- and closing capital work -in- progress of Rs. 6,43,261/- making average investment in capital work- in -progress during the year of Rs. 6,12,044,63/-, while the assessee had paid interest of Rs. 1,47,52,591/- on borrowed funds during the year, the disallowance of interest under section 36(1)(iii) in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of interest already capitalized by the assessee amounting to Rs. 18,77,665/- and the interest disallowed by the AO under section 143(3) vide order dt. 10/12/2008 amounting to Rs. 77,191/- he made a net disallowance of Rs. 48,62,035/- to the income of the assessee. 5. Thereafter notice under section 154 of the Income Tax Act 1961, was issued to the assessee on 09/11/2012 for the reason that though capital work in progress amounting to Rs. 13,33,69,281/- was put to use during the year only in February 2007, depreciation and additional depreciation on substantial part of the addition was claimed for the full year,which was otherwise allowable @ 50% of the amount due, since the assets were put to use for less than six months. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e mistake is obvious and patent and not something which can be established by a long drawn process of reasoning on points on which there may be two opinions, but in this case, there was an obvious and apparent mistake in the assessment order passed on 19.12.2011 and so the argument of the Ld. Counsel is not acceptable. Therefore, it is held that the Assessing Officer was right in disallowing the impugned depreciation on plant & machinery and electrical installation u/s 154 of the Act. Grounds of appeal taken by the appellant are dismissed. " 7. Aggrieved against the order of Ld. CIT(A) the assessee filed an appeal before us taking the following grounds of appeal: 1. That the order of Learned CIT(A) is bad against the facts & Law. 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inery. The certificate from Central Excise Dept. regarding installation of new Plant & Machinery were also relied upon by the Ld. AR to showing the date of installation of new Plant & Machinery. The AR further relied upon details of preoperative expenses which were capitalized on 21/08/2006, to prove the date of start of production from the new Plant & Machinery. The AR further submitted that the fact that power consumption had increased by 33% as compared to last year, wages and labour charges had increased by 86% as compared to last year, consumption of yarn increased by 37% and purchase of unfinished towels decreased by 44% as compared to last year, sales increased by 5% as compared to last year inspite the decrease in purchase of unfini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocess of investigation, argument, elucidation, or debate cannot be said to be " apparent mistakes" and in such cases 154 cannot be resorted to. We rely on decision of Calcutta High Court in case of Hindustan Lever Ltd. Vs. JCIT & Others, 284 ITR 42. 14.In the present case the alleged "mistake" sought to be rectified is the depreciation granted to the assessee u/s 32, on applicable rates for the entire year, which as per the AO should actually have been restricted to 50% only since on the basis of information on record with the AO, the assets were put to use only in February 2007 and thus for less than 180 days. Thus AO wanted to reappreciate facts on record which have already been considered. 15.We find that the fact that the assets wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. In case of T.S. Balram, ITO, Vs. Volkart Brothers and Others, 82 ITR 50, Hon'ble Supreme Court held " A decision on a debatable point of law is not a mistake apparent from record." Hon'ble Punjab & Haryana High Court in case of CIT Vs. Investment Trust of India Ltd. (2009)184 Taxman 381 held " the issue relating to disallowance of depreciation on the ground that the asset did not exist in the assessee's business of hiring out assets, is a debatable one and hence cannot be the subject matter in rectification proceeding." Therefore the provision of section 154 of the Income Tax Act, 1961 is not attracted to the instant case. In view of the above, the proceedings initiated u/s 154 are held to be bad in law and hereby quashed. Resultantly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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