2018 (9) TMI 2044 - AT - Income Tax

ITAT Delhi allows assessee's appeal on depreciation revision under IT Act

The ITAT Delhi allowed the appeal of the assessee concerning the revision of depreciation allowance under section 263 of the IT Act for the assessment ... Revision u/s 263 - assessee Claiming Depreciation u/s 32 while claiming exemption u/s 11 - allowance of depreciation on the assets was set aside by the ld. CIT(E) to the file of AO to make proper enquiries whether the cost of such assets have been allowed as application of income in the past or not and then to decide the issue afresh - HELD THAT:- Once the issue under consideration stands decided by the ld. CIT(A) in favour of the assessee, there remains nothing to be decided in the present appeal at this stage. Moreover, since the issue has been decided in the case of CIT vs. Rajashthan & Gujrat Charitable Foundation [2017 (12) TMI 1067 - SUPREME COURT] in favour of the assessee, the order u/s. 263 would not survive at all. - Decided in favour of assessee. Issues:1. Revision of depreciation allowance under section 263 of the IT Act for the assessment year 2011-12.Analysis:The appeal in question stemmed from an order under section 263 of the IT Act issued by the ld. CIT(E), New Delhi, pertaining to the allowance of depreciation on assets for the assessment year 2011-12. The ld. CIT(E) directed the matter back to the AO to conduct further inquiries regarding whether the cost of the assets had been previously allowed as an application of income. Subsequently, the AO disallowed the depreciation claimed by the assessee amounting to Rs. 40,62,845 in compliance with the revision order. However, the ld. CIT(A) reversed this decision and allowed the depreciation as an application of income, citing a precedent set by the Hon'ble Supreme Court in a specific case.Upon reviewing the submissions from both parties, the ITAT Delhi observed that since the ld. CIT(A) had already ruled in favor of the assessee on the matter, there was no further issue to be decided in the current appeal. The tribunal noted that the Hon'ble Supreme Court had already made a decisive ruling in a similar case, supporting the assessee's position. Consequently, the ITAT Delhi set aside the order issued under section 263, thereby allowing the appeal of the assessee. As a result, the appeal was deemed successful, and the decision was pronounced in an open court session on 4th September 2018.