Validity of Income Tax orders upheld for assessment years 2012-13 and 2014-15. Depreciation allowed post verification.

The Tribunal upheld the validity of orders passed by the Principal Commissioner of Income Tax (PCIT) under section 263 for assessment years 2012-13 and 2014-15. In both years, after the PCIT set aside the assessment orders for verification of expenditure genuineness, the Commissioner (Appeals) directed to allow depreciation. The fresh assessment orders allowed depreciation after verifying the expenditure. The Tribunal found the reassessment not erroneous and dismissed the appeals as infructuous, applying similar reasoning for both years.

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Issues:
Validity of orders passed by PCIT under section 263 for assessment years 2012-13 and 2014-15.

Analysis:
For the assessment year 2012-13, the assessee, a resident company engaged in infrastructure projects, filed a return declaring a loss. The assessing officer allowed depreciation initially but later disallowed it as the assessee was deemed ineligible. The assessing officer then allowed amortization under a circular. The PCIT, under section 263, set aside the orders, directing verification of expenditure genuineness. The Commissioner (Appeals) later directed to allow depreciation. The fresh assessment order allowed depreciation after verifying the genuineness of the expenditure. The Tribunal found the reassessment not erroneous and dismissed the appeal as infructuous.

For the assessment year 2014-15, a similar scenario unfolded where the assessing officer disallowed depreciation but allowed amortization. The PCIT set aside the assessment order for verification of expenditure genuineness. The Commissioner (Appeals) allowed depreciation, and the fresh assessment order allowed depreciation after verifying the expenditure. The Tribunal applied the same reasoning as in the previous year and dismissed the appeal as infructuous.

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