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TMI Blog2025 (3) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... s on the opening date, which shall be increased by the actual cost of the assets acquired during the year and be reduced by the moneys payable in respect of assets sold during the year and no further adjustment is allowed to be made to the WDV computed as per the provisions of the said section. It is on such WDV so computed that the depreciation has to be computed. The format of income tax return utility notified by the CBDT, the amount of depreciation chargeable on plant and machinery is auto computed in Schedule DPM. An assessee is meant to submit the figure of opening WDV of the block, details of additions made during the year classified by the period for which such asset is put to use (more than or less than 180 days) and the details of assets sold during the year. Basis the aforesaid details submitted, the utility as conceived by the Income-tax Department, calculates the amount of normal and additional depreciation allowable on the block of asset. No mechanism for the assessee to first compute and reduce the additional depreciation for the preceding year from the opening WDV and then compute the normal depreciation for the relevant year, as directed by the Ld. PCIT. The sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... That the PCIT erred on facts and in law in setting aside the assessment order by exercising powers under section 263 of the Act without appreciating that: (a) assessment order was passed by due enquiry and application of mind qua claim of depreciation; (b) computation of depreciation by the appellant as accepted by the assessing officer is not just plausible but the only correct view/ computation; and (c) revisionary powers cannot be exercised merely to substitute view taken by the assessing officer. 1.4. That the PCIT erred on facts and in law in relying on Explanation 2 to section 263 of the Act without appreciating that the same cannot be applied to exercise unfettered powers of revision, in violation of the main section. 1.5 That the PCIT erred on facts and in law in not appreciating that assessments order framed by National Faceless Assessment Centre in terms of procedure prescribed under section 144B of the Act are not amenable to revisionary jurisdiction under section 263 of the Act 2. That on the facts and circumstances of the case and in law, the PCIT erred in holding that the appellant has claimed and is allowed excessive depreciation to the extent of Rs. 23,40,03,3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment order dated 08.11.2021 passed by the assessing officer under section 143(3) r.w.s 144C(3) and 144B of the Act on the ground that the same was erroneous in so far as prejudicial to the interests of the Revenue, inasmuch as the Assessing Officer has failed to examine the claim of depreciation made by the assessee as a consequence of claiming brought forward additional depreciation of Rs. 156,00,22,181 from earlier assessment year 2017-18, which has resulted in the assessee availing excess depreciation. The Ld. PCIT held that brought forward additional depreciation of Rs. 156.00 crore from AY 2017-18 should have first been reduced from the opening WDV and thereafter current year's normal and additional depreciation should have been computed for AY 2018-19. The Ld. PCIT has, accordingly, set-aside the aforesaid assessment order passed under section 143(3) of the Act on the aforesaid issue and directed the assessing officer to pass fresh assessment order and compute correct amount of depreciation and disallow the excess depreciation. 5. Aggrieved by the order of the Ld. PCIT, the assessee is now in appeal before the Tribunal. 6. Before us, the Ld. AR relied on the computatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - - 17 Net aggregate depreciation (15- 16) 5,29,41,01,183 - 11,07,99,883 18 Proportionate aggregate depreciation allowable in the event of succession, amalgamation, demerger etc. (out of column 17) - - - 19 Expenditure incurred in connection with transfer of asset/ assets - - - 20 Capital gains/ loss under section 50(5+ 8-3a-3b -4 -7-19) - - - 21 Written down value on the last day of previous year (6+ 9-15) 16,89,99,13,280 - 18,13,29,768 7.2 For the year under consideration, the assessee claimed aggregate depreciation of Rs. 529,41,01,183/- which included additional depreciation of Rs. 156,00,22,181 pertaining to assets put to use for less than 180 days in the preceding assessment year 2017-18. The aforesaid depreciation, it is submitted, was computed in accordance with income tax return utility prescribed by CBDT. The Ld. PCIT, in the impugned order, however held that the assessee should, at first, have reduced the additional depreciation pertaining to AY 2017-18 from the WDV as on 01.04.2017 and then computed the normal depreciation @ 15% for the year under consideration. As a consequence thereof, the Ld. PCIT has alleged that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4)
16. Depreciation disallowed under section 38(2) of the I.T. Act (out of column 15)
7.4 Even on going through the above, it can be found that no mechanism for the assessee to first compute and reduce the additional depreciation for the preceding year from the opening WDV and then compute the normal depreciation for the relevant year, as directed by the Ld. PCIT. The said computation of depreciation, as provided in the income tax return utility, has also been found to be in consonance with the Clause 18 of the Tax Audit Report. If the method suggested by the Ld. PCIT in the impugned order were to be followed, in that case, the total depreciation allowable to the assessee, would be higher in subsequent years since the closing WDV would be higher. Being so, the assessee would be allowed higher depreciation is subsequent years. In view these facts, we hold that that there is no error in the depreciation claimed by the assessee, hence no case of order being erroneous inasmuch as it is prejudicial to the interest of revenue could be made out.
8. In the result, appeal of the assessee is allowed.
The order is pronounced in the open Court on 28.02.2025 X X X X Extracts X X X X X X X X Extracts X X X X
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