TaxTMI 
TaxTMI 
2022 (8) TMI 618
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.... revision on this ground be cancelled. 3. The learned C.I.T. has erred in passing revision order on the ground that claim of depreciation on windmill while computing book profit u/s. 115JB was not examined by learned Assessing Officer. Revision on this ground is mere change of opinion, and therefore, illegal, and therefore, requires to be quashed. 4. The learned C.I.T. has erred in passing revision order on the ground that details of valuation of closing stock was not furnished before learned Assessing Officer. Revision on this is mere change of opinion, and therefore, illegal, and therefore, requires to be cancelled. 5. The learned C.I.T. has erred in passing revision order on the ground of non-furnishing of details of stock hypothecated to bank. Your appellant submits that in view of clear legal position, the revision order on this ground is illegal, and therefore, requires to be cancelled. 6. The learned C.I.T. has erred in passing revision order on the ground of six times increase in sale of scrap at Rs. 174,46,006/- as against Rs. 32,57,079/- of immediately preceding previous year. Revision on this ground is mere change of opinion, and there....
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....eciation @ 80% on the same under the Income Tax Act. The PCIT was of the view that depreciation claimed @ 80% by the assessee while computing books profits under section 115JB of the Income Tax Act is not permissible and instead, the assessee should have claimed depreciation @ 15.33% as per the Companies Act for the purpose of calculation of book profits under section 115JB of the Act. Accordingly, the assessee has been allowed excess depreciation of Rs. 2,75,00,917/- on the windmill, while computing the book profits for the relevant period. In the 263 proceedings, the assessee submitted that on the very said issue, the AO had raised query by letter dated 19-02-2012 at serial number 8 of the said query, which was replied by the assessee vide letter dated 12-12-2012. However, the PCIT rejected the assessee's arguments with the following observations: "xxxxxxxxxxxxxxxxxxxxxxx On verification of records, it is gathered that the AO, vide his letter dated 19-02-2012 at sr. no. 8 has asked assessee to submit details of bills/invoice/receipt/Delivery Challan for installation of windmill along with date of put to use with supporting document, whereas the assessee had ....
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....as the Tribunal allowed the assessee's claim and directed the Assessing Officer to allow the claim of depreciation as per the Income-tax Rules for the purposes of computing the book profit under section 115J. On reference, the High Court reworked the profits of the assessee under section 115J by substituting the rates of depreciation prescribed in Schedule XIV of the Companies act, 1956. In appeal, the Supreme Court held that where assessee was consistently charging depreciation in its books of account at rates prescribed in Income-tax Rules and accounts of assessee had been prepared and certified as per provisions of 1956 Act, Assessing Officer would not have any jurisdiction under section 115J to rework net profits of assessee by substituting rates of depreciation prescribed in Schedule XIV to 1956 Act. We further note that the jurisdictional Gujarat High Court in the case of DCIT v. Vardhman Fabrics (P.) Ltd. [2002] 122 Taxman 375 (Gujarat) has also adjudicated on this issue in favour of the assessee. The brief facts of the case were that assessee calculated depreciation on plant and machinery at 33.33 per cent as permissible under the Income-tax Rules, 1962 as against 30 pe....
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....d be made to assessee's income on ground that while calculating total income as per section 115JB, assessee had adopted rate of depreciation as per Income-tax Act instead of Companies Act in profit and loss account. The Andhra Pradesh High Court in the case of Deccan Tools Industries (P.) Ltd. [2014] 52 taxmann.com 55 (Andhra Pradesh) held that where for purpose of section 115J, assessee claimed depreciation at rates provided under Income-tax Rules, action of Assessing Officer in redrawing profit and loss account and adopting rates prescribed under Companies Act, was totally unauthorized. 6.1. In view of the various decisions cited above, we are of the considered view that in the instant facts, PCIT erred in facts and law in holding that the assessment order was erroneous and prejudicial to the interests of the revenue so far as ground number 3 of the assessee's appeal is concerned. 7. In the result, ground number 3 of the assessee's appeal is allowed. Ground number 9: payments for job work not verified by AO at "fair market value" under section 40A(2)(b): 8. The brief facts in relation to this ground of appeal are that in the 263 proceedings, the PCIT obser....
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.... the provisions of section 40A(2)(b) of the Act have been satisfied in the instant set of facts. Hence, the order passed by the AO after carrying out during verification cannot be held to be erroneous and prejudicial to the interests of the revenue. In response, ld. DR relied upon the observations made by the PCIT in 263 order. 10. We have heard the rival contentions and perused the material on record. We note that vide letter dated 4 January 2013, the AO had called for details of business concerns specified in section 40A(2)(b) of the Act. The PCIT has also agreed in his order that the vide letter dated 12-12-2012, the assessee submitted details of parties along with amount of payment and the ledger accounts of the respective parties as per serial number 13 in the said reply. Accordingly, in our view, it is not a case that this issue was not examined by the AO in the assessment proceedings. Specific query in this regard was raised by the AO, to which the assessee replied. We note that the jurisdictional Gujarat High Court in the case of CIT v. Ashok J. Patel (2014) 43 Taxman.com 227 (Gujarat) held that for making the disallowance under section 40A(2)(b) of the Act, onus to prov....