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TMI Blog2020 (10) TMI 456X X X X Extracts X X X X X X X X Extracts X X X X ..... .R could not immediately show that the assessee has not claimed depreciation on leased assets. He has submitted that he will furnish the details and accordingly forwarded a reconciliation statement. The very fact that the contention of the assessee could be understood only after examining the reconciliation statement would show that the AO should have also examined the submission of the assessee. Accordingly, we are of the view that the assessment order is rendered erroneous and prejudicial to the interests of revenue in terms of Explanation 2 to sec. 263 - Appeal of the assessee is dismissed. - ITA No.1343/Bang/2019 - - - Dated:- 9-10-2020 - Shri N.V. Vasudevan, Vice President And Shri B.R. Baskaran, Accountant Member For the Assessee : Shri Vikram Vijayraghavan, Advocate. For the Revenue : Shri Pradeep Kumar, CIT (D.R) ORDER PER SHRI B.R. BASKARAN, A.M. : The assessee has filed this appeal challenging the revision order dated 27-03-2019 passed by Ld Pr. CIT, New Delhi u/s 263 of the Act for the assessment year 2012-13. The contention of the assessee is that the initiation of revision proceeding is without authority of law and jurisdiction. 2. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letter dated 21.3.2019, wherein the assessee primarily contended that the Ld Pr. CIT, New Delhi does not have jurisdiction over the assessee, since the registered office of the assessee company is in Bangalore and hence it falls under the jurisdiction of Ld Pr. CIT-5, Bangalore. 6. Ld Pr. CIT, New Delhi noticed that the assessee s name was earlier Freescale Semiconductor India P Ltd with the same PAN number and later its name was changed and merged with M/s NXP India Ltd. The assessee has a written a letter dated September 27, 2018 (the said letter has been extracted by Ld Pr. CIT at page 4 of his order), wherein it has claimed that its Principal Place of business lies in Delhi only, even though the registered office has been shifted to Bangalore. Accordingly, the Ld Pr. CIT observed that the assessee has preferred not to reply to his notice, even after taking a stand before Income tax authorities on the jurisdiction. Accordingly, the Ld Pr. CIT took the view that the assessee company does not want to say anything on the matter. 7. Accordingly, the Ld Pr. CIT took the view that the assessee is not entitled to claim deduction of payment of principal amount of ₹ 1,09,85 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount equal to its fair value. - Profit and Loss account:- The lease payments has been apportioned between the finance charge and the reduction of outstanding liability. Hence, the Company has debited the interest component of the finance lease payments to the profit and loss account and the repayment of the principal component amounting to ₹ 1,09,85,585/- paid during the year has been adjusted against the outstanding liability in the balance sheet. Accordingly, for tax purposes, the Company has separately claimed the deduction with respect to the repayment of the principal component of the lease rental payments amounting to ₹ 1,09,85,585/- since the same is not debited to the profit and loss account (working for the same is enclosed as Annexure 4). We also submit that the Company has not claimed tax depreciation on such leased assets since the Company is not the owner of the said assets. The ld A.R, accordingly, submitted that the AO has applied his mind and accepted the method followed by the assessee for book purposes and income tax purposes. Accordingly, he submitted that the view taken by the AO on this issue is one of the possible views and h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssible view and hence the impugned revision order should be quashed. 14. We heard rival contentions and perused the record. It is seen that the assessee has followed different treatment for leased assets for book purposes and for income tax purposes. It was submitted that it is required to do so in view of the decision rendered by Hon ble Supreme Court in the case of ICDS Ltd (supra), wherein it was held that the lessor is entitled to claim depreciation under the income tax Act. Accordingly the assessee, being lessee, is not entitled to claim depreciation under the Income tax Act. However, as per Accounting Standard -19, the assessee was required to capitalise leased assets in its books of account. Accordingly, it was submitted that the assessee was required to follow different treatment for leased assets for book purposes and for income tax purposes. The Ld A.R also took us through the paper book, depreciation schedules prepared for book and income tax purposes. 15. Before us, the Ld A.R did not argue on the jurisdiction issue, meaning thereby, the assessee has accepted the jurisdiction of the Ld Pr. CIT-06, New Delhi. The Ld A.R contended that the Ld Pr. CIT has erroneously ..... X X X X Extracts X X X X X X X X Extracts X X X X
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