TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 646
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....iz. the impugned assessment order must be erroneous and that error must be prejudicial to the interest of the revenue. In the present case, ld. AO has passed the reasoned assessment order after analyzing all details and therefore there was no error in the impugned assessment order so as to justify action u/s. 263 of the Act. Under the circumstances, the very assumption of power u/s. 263 of the Act is unjustified and bad in law and therefore, order u/s. 263 of the Act deserved to be -quashed. 3. The subject order u/s. 263 passed by the Ld. PCIT is illegal and bad in law in absence of any finding of Ld. PCIT as to how the alleged error of AO has resulted in loss of revenue particularly when the depreciation has been correctly computed in accordance with Section 32 of the Act. 4. The Ld. PCIT has further erred in law and on facts in not appreciating that the view taken by the AO is a possible view and hence the proceedings are illegal and bad in law. 5. The ld. PCIT has further erred in law in not coming to any concrete conclusion and without conducting any inquiry or investigating the issue, merely directed the AO to frame the assessment order afresh. Without there being any po....
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....reciation are mentioned in Para 5.1 to 5.1.2 of his order. 4. Ld. Counsel for the assessee pointed out that the issue raised in the present appeal stands squarely covered in favour of the assessee by the decision of the ITAT in the case of Suzuki Motor Gujarat Pvt. Ltd. vs. PCIT (2025) 172 taxmann.com 469 (Ahmedabad-Trib.). Copy of the order was placed before us. Referring to the same Ld. Counsel for the assessee pointed out that the facts of the said case was identical, in which revisionary power was exercised by the Ld. PCIT noting that the fact that the assessee had been allowed excess depreciation on account of the carry forward of additional depreciation to the impugned year to the extent of 50% which was not set off from its opening written down value of assets for the purpose of calculating depreciation for the impugned year. Ld. Counsel of the assessee pointed out that the ITAT categorically held that the proposition advanced by the Ld. PCIT was not in accordance with law. He pointed out that the ITAT referred to all relevant provisions of law pertaining to depreciation and written down value of assets under Section 32 and 43(6) of the Act and pointed out that the said cal....
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....ays 1,56,00,22,181 - - 15 Total depreciation (10+11+12+13+14) 5,29,41,01,183 - 11,07,99,883 16 Depreciation disallowed under section 38(2) of the I.T. Act (out of column 15) - - 17 Net aggregate depreciation (15-16) 5,29,41,01,183 - 11,07,99,883 18 Proportionate aggregate depreciation allowable in the event of succession, amalgamation, demerger etc. (out of column 17) - - 19 Expenditure incurred in connection with transfer of asset/assets - 20 Capital gains/ loss under section 50(5+ 8-3a-3b -4 -7-19) - - 21 Written down value on the last day of previous year (6+ 9-15) 16,89,99,13,280 - 18,13,29,768 7.2 For the year under consideration, the assessee claimed aggregate depreciation of Rs. 529,41,01,183/- which included additional depreciation of Rs. 156,00,22,181 pertaining to assets put to use for less than 180 days in the preceding assessment year 2017-18. The aforesaid depreciation, it is submitted, was computed in accordance with income tax return utility prescribed by CBDT. The Ld. PCIT, in the impugned order, however held that the assessee should, at first, have reduced the addit....
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....recaition, if any, on 4 13. Additional depreciation, if any, on 7 14. Additional deprecaition relating to immediately preceidng year on asset put to use for less than 180 days 15. Total depreciation (10+11+12+13+14) 16. Depreciation disallowed under section 38(2) of the I.T. Act (out of column 15) 7.4 Even on going through the above, it can be found that no mechanism for the assessee to first compute and reduce the additional depreciation for the preceding year from the opening WDV and then compute the normal depreciation for the relevant year, as directed by the Ld. PCIT. The said computation of depreciation, as provided in the income tax return utility, has also been found to be in consonance with the Clause 18 of the Tax Audit Report. If the method suggested by the Ld. PCIT in the impugned order were to be followed, in that case, the total depreciation allowable to the assessee, would be higher in subsequent years since the closing WDV would be higher. Being so, the assessee would be allowed higher depreciation is subsequent years. In view these facts, we hold that that there is no error in the depreciation claimed by the assessee, hence no case of order being erroneou....