2013 (10) TMI 930 - AT - Income Tax

ITAT affirms reassessment, depreciation adjustment, penalty deletion under IT Act sections

CLP Power India Pvt. Ltd. Versus ITO Ward 1(3), Ahmedabad

CLP Power India Pvt. Ltd. Versus ITO Ward 1(3), Ahmedabad - TMI Issues involved:1. Reopening of assessment under section 147 of the IT Act.2. Adjustment of unabsorbed depreciation while computing book profit under section 115JB.3. Deletion of penalty under section 271(1)(c) of the IT Act.Issue 1: Reopening of assessment under section 147 of the IT ActThe appeal was filed challenging the reopening of assessment under section 147 of the IT Act. The AO noted that the assessee claimed unabsorbed depreciation twice for different assessment years. The AO issued a show cause notice regarding the addition of unabsorbed depreciation while calculating book profit under section 115JB for a specific assessment year. The CIT(A) rejected the objection of the assessee, stating that income had escaped assessment justifiably. The ITAT upheld the decision, emphasizing that the assessee was not entitled to a double claim of unabsorbed depreciation. The reopening of assessment under section 147 was deemed justifiable.Issue 2: Adjustment of unabsorbed depreciation while computing book profit under section 115JBThe next ground challenged the adjustment of unabsorbed depreciation while computing book profit under section 115JB. The CIT(A) held that the deduction of unabsorbed depreciation was not permissible as it had already been utilized in a prior assessment year. The ITAT confirmed the CIT(A)'s order, dismissing the ground of the assessee. The legal provisions were analyzed, and it was concluded that the assessing officer's action was justified in not allowing the deduction of unabsorbed depreciation in the current assessment year.Issue 3: Deletion of penalty under section 271(1)(c) of the IT ActThe Revenue's appeal involved the deletion of a penalty levied under section 271(1)(c) of the IT Act. The penalty was imposed due to alleged evasion of tax by filing inaccurate particulars. The CIT(A) deleted the penalty, citing various decisions in favor of the assessee. The ITAT upheld the CIT(A)'s decision, stating that there was no valid reason for imposing the concealment penalty. The grounds of the Revenue were dismissed, and the penalty deletion was affirmed.In conclusion, the ITAT upheld the decisions regarding the reopening of assessment, adjustment of unabsorbed depreciation, and deletion of penalty under section 271(1)(c) of the IT Act, thereby dismissing the appeals and cross-objection.