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TMI Blog2022 (6) TMI 258X X X X Extracts X X X X X X X X Extracts X X X X ..... ning AY 2014-15. The grounds of appeal raised by the Revenue read as under: "1. On the facts and under the circumstances of the case, the Ld. CIT(A) has erred in law and facts in deleting the addition of Rs. 5,78,00,000/- made by the Assessing Officer on account of adjustment due change in the depreciation rate. 2. On the facts and under the circumstances of the case, the Ld. CIT(A) has erred in law and facts in deleting the disallowance on account of loss on revaluation of fixed assets for Rs. 1,00,15,882/- ignoring the provisions of the Act to exclude the diminution in revaluation of assets, assessee cannot be allowed to claim any loss on revaluation of fixed assets whether called diminution/depreciation in revalued assets or by any o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of an asset. Further, under paragraph 13 of AS-6, it is permitted for the company to apply the higher rate of depreciation where the management estimates of the useful life of an asset is shorter than that envisaged under the provision of the relevant statutes (here, The companies Act, 1956). The provisions regarding rates of depreciation charged by a company were explained in Circular dated 07/03/1989 issued under the Companies Act, the relevant portion of which is reproduced as under: "It may be clarified that the rates as contained in Schedule XIV should be viewed as the minimum rates, and, therefore, a company shall not be permitted to charge depreciation at rates lower than those specified in the schedule in relation to assets purch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Supreme Court; and further, that report(s)/opinion(s) of statutory auditor(s) and the reports/opinions/recommendations as a result of Supplementary Audit are not final: these are not only subject to approval by the company in its general meeting, but also subject to examination by Registrar of Companies and his satisfaction that the accounts of the assessee are maintained in accordance with the requirements of the Companies Act. However, on the perusal of records before us, which includes the Assessment Order, the order of the Ld. CTT(A), the Paper book filed by the Assessee, Form 35, Form 36 etc; we find that the both the lower authorities, AO as well as Ld. CIT(A), have not considered whether, after examination by Registrar of Compani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assets with retrospective effect, as a result of which the Assessee has made additional claim of depreciation amounting to Rs. 52.74 crores. Since the relevant information is not on our records, we restore the matter to the file of the AO with the direction to pass fresh order on this issue. Thus, the order of the Ld. CIT(A) is set aside on this limited issue and the matter in dispute in the present appeal before us is restored to the file of the AO for fresh order on this limited issue. In the result, appeal of the Revenue is partly allowed for statistical purposes." 4. In view of the consensus arrived in the matter we restore the issue back to the file of the Assessing Officer to implement the directions as applicable in AY 2012-13 in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 115JB on this score. 7. The Ld. DR for the Revenue, on the other hand, assailed the action of the CIT(A) and submitted that the impugned fact of actual write off of loss on account of impairment of fixed asset is neither borne out from records nor would by itself allow the assessee to reduce the book profit for the purposes of Section 115JB of the Act. Seen it differently, the impugned loss is capital loss in nature which are not allowable as revenue expenditure even under normal provisions and therefore liable to be adjusted for the purposes of determination of book profit which is only alternate scheme of taxation in certain circumstances. Ld. DR accordingly relied upon the action of the Assessing Officer and urged for reversal of the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lified' opinion on the financial statement and one of the qualifications relates to claim of loss on revaluation of assets in question. The qualification of Auditor has the effect of stating that book profits declared by the Assessee do not bear the trappings of true and fair expression of 'statement of profit and loss'. This being so, it cannot be said that book profits disclosed in the financial statement is sacrosanct and assessee acquires indefeasible right in the matter of its declaration of book profits. Secondly, we also find merit in the plea of the Revenue that notwithstanding the fact that 'loss on account of revaluation of fixed asset' does not arise by way of provision for diminution in the value of asset but ..... X X X X Extracts X X X X X X X X Extracts X X X X
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