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of <h1>Assessee's Appeals Partly Allowed, Revenue's Appeals Dismissed. Depreciation, MAT, and Asset Acquisition Issues Addressed.</h1> <h3>M/s Ajmer Vidyut Vitran Nigam Ltd. Versus Assistant Commissioner of Income Tax, Circle-2, Ajmer and Vica-Verssa and Deputy Commissioner of Income Tax, Circle-2, Ajmer. Versus M/s Ajmer Vidyut Vitran Nigam Ltd.</h3> M/s Ajmer Vidyut Vitran Nigam Ltd. Versus Assistant Commissioner of Income Tax, Circle-2, Ajmer and Vica-Verssa and Deputy Commissioner of Income Tax, ... Issues Involved:1. Validity of notice U/s 147/148.2. Disallowance of depreciation on non-existing assets.3. Disallowance of depreciation U/s 43(1) explanation 10 of the Income Tax Act.4. Applicability of MAT (sec. 115JB of Income Tax Act, 1961).5. Charging of interest U/s 234B on MAT tax.6. Deleting the disallowance of prior period expenses.Detailed Analysis:1. Validity of Notice U/s 147/148:Ground No. 1 of the assessee's appeals for the A.Y. 2002-03 and 2003-04 was not pressed, and therefore, it was dismissed.2. Disallowance of Depreciation on Non-Existing Assets:The Tribunal initially remanded the matter back to the Assessing Officer (A.O.) with directions to verify the physical existence of assets and allow depreciation accordingly. The A.O. disallowed depreciation due to the assessee's failure to submit the list of physically verified assets. The CIT(A) confirmed this disallowance, doubting the basis of the certificate issued by the Chief Accounts Officer. However, the Tribunal found that the insistence on physical verification was unwarranted since the assets were part of the block of assets transferred from the Rajasthan State Electricity Board (RSEB). The Tribunal allowed the depreciation on the written down value of the transferred assets but emphasized the need for the assessee to maintain a fixed assets register.3. Disallowance of Depreciation U/s 43(1) Explanation 10:The A.O. disallowed depreciation on assets acquired through subsidies, grants, and consumer contributions, arguing that these should not be included in the actual cost of the assets. The CIT(A) confirmed this disallowance. The Tribunal upheld the CIT(A)'s decision, stating that the actual cost of the asset should exclude the portion met by subsidies or grants.4. Applicability of MAT (sec. 115JB of Income Tax Act, 1961):The A.O. applied the provisions of MAT, adjusting the book profit by disallowing excessive depreciation. The CIT(A) partly allowed the appeal, directing the A.O. to take the correct figure for calculation of book profits. The Tribunal, following the order of the Advance Rulings (Income Tax) in a similar case, decided that the provisions of MAT U/s 115JB should not be applied to the assessee.5. Charging of Interest U/s 234B on MAT Tax:This issue was linked to the applicability of MAT. Since the Tribunal decided against the applicability of MAT, the charging of interest U/s 234B on MAT tax was also not applicable.6. Deleting the Disallowance of Prior Period Expenses:The CIT(A) allowed the appeal of the assessee, directing the A.O. to delete the addition of prior period expenses, relying on the Tribunal's decision for earlier assessment years. The Tribunal upheld the CIT(A)'s decision, dismissing the revenue's appeal on this ground.Conclusion:- The appeals of the assessee for all assessment years were partly allowed.- The appeals of the revenue for all assessment years were dismissed.
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