TaxTMI 
TaxTMI 
2022 (3) TMI 838
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....and complied with. 3. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that the reassessment proceedings initiated by the learned A.O. are bad in the eye of law as the reasons recorded for the issue of notice under Section 148 are bad in the eye of law and are contrary to the facts. 4. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that the order passed by Ld AO is bad both in the eye of law and on facts as the same has been reopened on the basis of reasons without there being any whisper that the income has escaped due to the failure on part of the assessee to disclose fully and truly all material facts necessary for assessment, as the same has been reopened after a period of four years from the end of relevant assessment year and the assessment has already been made under Section 143(3). 5. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the assessee that the notice issued under Section ....
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....come of the assessee at Rs. 47,76,830/- as normal income. Subsequently, the AO initiated reassessment proceedings on the ground that the assessee had not carried forward correct WDV of some assets from AYs 2008-09 to AY 2009-10. He noted that the assessee made additions amounting to Rs. 18,08,727/- in the building, (WDV Rs. 1,18,44,748/-) during the FY 2008-09 and charged depreciation amounting to Rs. 1,80,873/- irregularly on the assets during the year under constructions (work in progress) which was not admissible as the assets were not ready to put to use. The AO further found that the assessee has not carried forward the closing WDV of assets at the beginning of the next year i.e. on 01.04.2008 which led to deduction of excess depreciation amounting to Rs. 11,73,764/-. The AO thereafter issued notice u/s 148 of the Act, which was duly served on the assessee. In response to the same, the assessee stated that the return originally filed on 22.09.2009 for AY 2009-10 may be treated as return filed in compliance to notice u/s 148 of the Act. 4.1. During the course of assessment proceeding, the AO confronted the assessee regarding unexplained investment in the fixed assets. Reject....
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....lock as on 01.04.2008 has been shown by the assessee at Rs. 1,80,53,472/-. This clearly shows that the assessee has inflated the value of machinery by an amount of Rs. 61,80,274/- (Rs. 1,80,53,472/- - Rs. 1.18.73.198/-). Similarly WDV of office equipments as on 31.03.2008 has been shown at Rs. 1,00,90,371/- but WDV of office equipments as on 01.04.2008 has been shown at Rs. 1,25,57,597/-. Thus the assessee has inflated the value of office equipment by an amount of Rs. 24,67,226/- (Rs. 1,25,57,597/- Rs. 1,00,90,371/-). Thus the effect of the above exercise is that the value of relevant assets (machinery and office equipments) has been inflated by the assessee by a sum of Rs. 86,47,500/- (61,80,274/- + 24,67,226/-). This is nothing but unexplained investment in various assets by the assessee u/s 69 of the IT Act. The assessee claimed that the subsidy received by the assessee in AY 2007-08 was deducted from the value of assets first in AY 2007-08 and secondly AY 2008- 09 and that when this mistake was noticed by the assessee, he enhanced the value of assets as on 01.04.2008 with the result that the effect of reducing the value of subsidy two times was nullified and the enhanced value ....
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....y has been deducted twice. The double deduction of amount of subsidy results into wrong closing value of WDV for the A.Y.07-08 and A.Y.08-09. The error came in the notice of the assesses during the A.Y. 09-10 and therefore the opening WDV as per Income Tax. Soles for A.Y. 09-10 fee; amount of subsidy reintroduced and was taken at revised enhanced value by rectifying the impact of double deduction of amount of subsidy. Admittedly, the mistake on the part of the appellant has occurred in the very first year of 2007-08 wherein he has claimed a double deduction, of subsidy by first actually reducing it in the books of account which w evident from the perusal of the ledger of the building and machinery that has ten filed and then again while drawing out the depreciation chart for A.Y. 07-08 the same amount of subsidy has been claimed again. Now apparently, as stated by the ld. Counsel the mistake has been discovered and this was reintroduced in the year under consideration. It is therefore not surprising that the AO prima facie took it as unexplained investment. The Ld. AR has argued that 11 is obvious from the perusal Of fee records and the facts which are undisputed ....
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....to page 7 of the impugned order and submitted that the Ld. CIT(A) has also given a finding that mistake has occurred in the very first year. He submitted that when the mistake is due to some clerical error and the assessee has not made any investment during the impugned assessment year and the error was rectified during the year, therefore, in absence of any unexplained investment made during the year, the provisions of section 69 of the Act are not attracted. He accordingly, submitted that the order of the Ld. CIT(A) be set-aside and the ground raised by the assessee be allowed. 8. The Ld. DR on the other hand, heavily relied on the order of the AO and the Ld. CIT(A). 9. We have heard the rival arguments made by both the sides, perused the orders of the A.O. and the Ld. CIT(A) and the paper book filed on behalf of the assessee. We find the AO in the instant case made addition of Rs. 86,47,500/- to the total income of the assessee u/s 69 of the Act on the ground that the WDV of plant & machinery as on 31.03.2008 was Rs. 1,18,73,198/- but the WDV of machinery & plant as on 01.04.2008 has been shown by the assessee at Rs. 1,80,53,472/-, meaning thereby the assessee has inflated....