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TMI Blog2024 (8) TMI 818X X X X Extracts X X X X X X X X Extracts X X X X ..... ation on both tangible and intangible assets which would need to be worked out in a dual manner Accounts working of depreciation actually chargeable under the profit and loss account has been correctly worked out and more importantly disclosed in the audit report filed along with the return of income. On this fact alone, the impugned order deserves to be quashed since the issue has been considered by the AO and dropped for any adverse treatment on account of the response filed by the assessee. The two items pertaining to the ICDS were issues on which the case was picked up for scrutiny and whereas on the ground that we have discussed above, the matter was dropped for considering any addition by the AO, the second ground pertaining to the IC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount of change in foreign exchange rates, out of two issues; the second being the increase in profit pertaining to ICDS-V being tangible fixed assets at Rs. 5,82,61,440/- (impugned amount). 1.1. Thereafter, the ld. Pr. CIT, Kolkata-2 initiated proceedings u/s 263 of the Income Tax Act, 1961 (in short the 'Act') on the ground that the auditors in Form-3CD for the present assessment year had certified at Sl. No. 13(d) 13(e) that an adjustment was required to be made in the profit to the tune of Rs. 5,82,61,440/- on account of tangible fixed assets. It is mentioned in the impugned order that the opportunities given to the appellant could not be availed of leading to the presumption that the AO had failed to add back the impugned amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le with the AO or would have been filed along with the return of income for the year under consideration. Thus, apparently all documents placed before us, and which were not considered by Ld. Pr. CIT, would not be fresh evidence. 2. Considering these facts, we have decided to proceed ahead with the adjudication on the basis of documents placed before us. Before proceeding any further, the grounds of appeal may be reproduced for reference: 1. For that on the facts and in the circumstances of the case and in law, the Ld. PCIT was unjustified in law and on facts in revising the assessment order u/s 143(3) of the Act dated 27.04.2021 even though the said order was neither erroneous nor prejudicial to the interest of the Revenue for the reasons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the case and in law, the order dated 21.03.2024 passed u/s 263 of the Act passed by the Ld. Pr.CIT is untenable on facts and in law and thus deserves to be deleted. 6. For that the assessee craves leave to submit additional grounds and/or amend or alter the grounds already taken either at the time of hearing of the appeal or before. 2.1. All the grounds of appeal basically challenge the action of ld. Pr. CIT in resorting to the provisions of Section 263 of the Act and recording that the AO s order was erroneous and prejudicial to the interest of the Revenue and thus meriting its cancellation, and directing the AO to pass a fresh assessment order on the basis of impugned under assessment of tax. 2.2. Ld. D/R relied on the findings containe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... showing a clear increase/decrease in profits as well as the overall net effect of such adjustments. It has been pointed out that the tax auditors had accordingly reported the difference between the depreciation as per books of accounts and depreciation allowable u/s 32 of the Act as under: ICDS Increase in Profit (Rs.) Decrease in Profit (Rs.) Net Effect (Rs.) ICDS V - Tangible Fixed Assets 5,82,61,440/ - NIL 5,82,61,440/- 3.2. The amount of Rs. 5,82,61,440/- does not include values concerning intangible assets and hence, such values were not included for the purpose of ICDS-V. However, as has been mentioned earlier the depreciation as per books of accounts and depreciation as per Income Tax Act has been worked out after including the value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e return of income. On this fact alone, the impugned order deserves to be quashed since the issue has been considered by the AO and dropped for any adverse treatment on account of the response filed by the assessee. It is interesting to note that the two items pertaining to the ICDS were issues on which the case was picked up for scrutiny and whereas on the ground that we have discussed above, the matter was dropped for considering any addition by the AO, the second ground pertaining to the ICDS-V (change in foreign exchange rates) at Rs. 51,54,082/- has been taken adverse note of and an addition has been made to that extent. This amply demonstrates the application of mind by the AO on the issues before him and reveals that he has duly cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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