Tribunal restores AO's assessments, deems orders consistent and not prejudicial.

The Tribunal set aside the CIT's orders under section 263 for all the impugned assessment years, restoring the AO's original assessments. The appeals of the assessee were allowed, and the Tribunal held that the orders were neither erroneous nor prejudicial to the interests of the Revenue. The Tribunal emphasized that the rule of consistency and judicial precedents supported the assessee's classification of income and depreciation claims.

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Issues Involved:
1. Erroneous and Prejudicial Order
2. Business Income vs. Income from House Property
3. Depreciation on Assets
4. Limitation Period for Revision

Issue-Wise Detailed Analysis:

1. Erroneous and Prejudicial Order:
The assessee contested the CIT's decision that the assessment order dated December 30, 2011, was erroneous and prejudicial to the interest of the revenue. The CIT argued that the assessee was not entitled to a deduction under section 32(iia) of the Income Tax Act, 1961, despite the appellant not making such a claim in its return of income. The Tribunal found that the CIT's order was not justified as the assessment orders were neither erroneous nor prejudicial to the interests of the Revenue. The assessee had correctly offered income under the head "Income from House Property" and relied on various Supreme Court judgments to support this classification.

2. Business Income vs. Income from House Property:
The CIT held that rental income earned from letting out immovable property should be assessed as 'Business Income' rather than 'Income from House Property.' The assessee argued that the rental income was correctly classified under 'House Property' and cited several Supreme Court rulings, including United Commercial Bank Ltd. vs. CIT and East India Housing Land Development Trust Ltd. vs. CIT. The Tribunal noted that the assessee's income from rentals had been consistently accepted under 'House Property' in previous years and that the CIT's reliance on the ITAT Bangalore judgment in the case of Global Tech Park P. Ltd. was distinguishable. The Tribunal concluded that the CIT's order was based on a difference of opinion and not on any erroneous assessment by the AO.

3. Depreciation on Assets:
The assessee argued that if the income was classified as 'Business Income,' it should be allowed depreciation on its assets, including buildings, fittings, and machinery. The CIT had rejected this claim, stating that the assessee was eligible for only 10% depreciation compared to the 30% deduction claimed under 'House Property.' The Tribunal found that the CIT's reasoning was flawed as the basis for the deductions was different. The Tribunal agreed with the assessee that the depreciation claim under 'Business' would be higher than the deductions under 'House Property,' thus not prejudicial to the interests of the Revenue.

4. Limitation Period for Revision:
The assessee raised an additional ground that the CIT's order dated March 28, 2009, was beyond the period of limitation. The Tribunal agreed, noting that the original assessment orders for A.Y. 2006-07 and 2007-08 were concluded on October 31, 2008, and September 30, 2008, respectively. The Tribunal relied on the judgments of Punjab & Haryana High Court in CIT vs. Darshan Singh and Rajasthan High Court in CIT vs. Hemraj Udyog, which held that the CIT could not revise an order beyond the period of limitation. The Tribunal concluded that the CIT's orders were time-barred and lacked jurisdiction.

Conclusion:
The Tribunal set aside the CIT's orders under section 263 for all the impugned assessment years, restoring the AO's original assessments. The appeals of the assessee were allowed, and the Tribunal held that the orders were neither erroneous nor prejudicial to the interests of the Revenue. The Tribunal emphasized that the rule of consistency and judicial precedents supported the assessee's classification of income and depreciation claims.

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