Assessee wins appeal against revision of 30% depreciation rate on tipper vehicles under section 263

The ITAT Amritsar allowed the assessee's appeal against PCIT's revision under section 263 regarding depreciation rates on tipper vehicles. The assessee claimed depreciation at two rates - 15% and 30% for different vehicle blocks, which was accepted by AO in earlier years. PCIT sought to restrict depreciation to 15% instead of 30% allowed by AO. The tribunal held that 30% depreciation rate for tippers used for goods transportation was properly supported by Income Tax Rules 1962 and precedent in Bharat Carriers Ltd. case. The assessment order was found neither erroneous nor prejudicial to revenue interests.

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Issues involved:
The appeal against the order of the Principal Commissioner of Income-1, Amritsar, passed under section 263 of the Income-tax Act, 1961 for assessment year 2017-18, involving delay in filing, initiation of proceedings without application of mind, assessment of depreciation on tipper, and setting aside the order for denovo assessment.

Delay in filing appeal:
The appeal was filed with a delay of 354 days, which was condoned by the Appellate Tribunal considering the reasonable cause of wrong advice by the consultant. The Tribunal relied on relevant legal precedents and the lack of strong objection from the Department.

Initiation of proceedings under section 263:
The Principal Commissioner was alleged to have erred in initiating proceedings under section 263 without proper application of mind, claiming that the Assessing Officer failed to conduct necessary inquiries or verifications before making the assessment. The Principal Commissioner set aside the assessment order, deeming it erroneous and prejudicial to the revenue's interest, leading to the appeal.

Assessment of depreciation on tipper:
The assessee, engaged in the stone crusher and tipper business, claimed depreciation on the tipper used for stone delivery at 30% and on trucks collecting stones at 15%. The Principal Commissioner, invoking section 263, challenged the depreciation claim on the tipper at 30%, suggesting it should be 15%. The Tribunal, after considering submissions and legal provisions, upheld the assessee's depreciation claim at 30%, citing compliance with the Income Tax Rule 1962 and relevant case law.

Setting aside the order for denovo assessment:
The Tribunal found no error in the assessment order regarding the depreciation claim on the tipper and concluded that it was not erroneous or prejudicial to the revenue's interest. Consequently, the order passed by the Principal Commissioner under section 263 was set aside and quashed, leading to the allowance of the assessee's appeal.

This judgment highlights the Tribunal's meticulous consideration of the issues surrounding the delay in filing, initiation of section 263 proceedings, assessment of depreciation on the tipper, and the subsequent setting aside of the order for denovo assessment, ensuring a fair and just outcome for the appellant.

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