TaxTMI 
TaxTMI 
TaxTMI 
2024 (12) TMI 1635
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....9-20 was completed u/s.143(3) of the Act. The AO accepted the returned income of Rs.1,33,59,250/- and Rs.6,50,20,360/- declared in AY 2018-19 and 2019-20 respectively. 2.1. The Ld. PCIT examined the assessment records of both the years under consideration and noticed that the assessee had acquired a meat processing unit located at Unnao, U.P. from a partnership firm, named, M/s J.S. International for a lump-sum consideration of Rs.100 crores, vide agreement for sale executed on 27-10-2016. He noticed that the value of building and machinery, lease hold land. Plant & machinery and other assets acquired from the above said firm was shown at Rs.69.77 crores in the sale agreement. The balance amount of Rs.30.23 crores was shown as the value of Intangible assets. However, the sale agreement did not specify the break-up details shown the nature of intangible assets. In both the years under consideration, the assessee claimed depreciation on the intangible assets amount of Rs.30.23 crores. 2.2. The Ld. PCIT noticed that the AO did not examine the correctness or otherwise of depreciation claimed on the Intangible assets in both the years under consideration. He also noticed that the AO h....
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....e considered as the enquiry of AO and hence, it cannot be said that there was application of mind by the AO. The Ld. PCIT also observed that the AO did not discuss anything about the claim of depreciation on the intangible assets in the impugned assessment orders. Accordingly, he held that, the impugned assessment orders are rendered erroneous and prejudicial to the interests of revenue on this count also. In support of this proposition, the Ld. PCIT took support of the decision rendered by Hon'ble Karnataka High Court in the case of Infosys Technologies Ltd., [341 ITR 293], wherein the Hon'ble Karnataka High Court has held that non-discussion of claim of deduction allowed by the AO in the assessment order would make it erroneous and prejudicial to the interest of the Revenue. Accordingly, the Ld. PCIT held that the assessment orders passed by the AO for both the years under consideration are rendered erroneous and prejudicial to the interest of the Revenue. Accordingly, he set aside the assessment orders passed for both the years and restored them to the file of the AO for the limited purpose of conducting enquiry with regard to the claim of depreciation of intangible assets and t....
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....rests of the Revenue‟ has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer, cannot be treated as prejudicial to the interests of the Revenue, for example, when an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue, or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue unless the view taken by the Income-tax Officer is unsustainable in law." The principle which has been laid down in Malabar Industrial Co. Ltd. [2000] 243 ITR 83 (SC) has been followed and explained in a subsequent judgment of the Supreme Court in CIT v. Max India Ltd. [2007] 295 ITR 282." 4.1. Under the provisions of sec. 263 of the Act, the Ld. Pr. CIT can revise the order only if it is shown that the assessment order is erroneous in so far as prejudicial to the interests of the revenue. The question as to when an order can be termed as "erroneous" was explained by the Hon'ble Bombay High Cour....
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....es - 47,28,420 Less: Current liabilities - ( 5,75,500) Total 1,00,00,00,000 Though the purchase consideration specifically included a sum of Rs.30.23 crores as pertaining to "Intangible assets", yet the sale agreement entered between the parties did not mention the details of intangible assets. This lacunae was noted by the AO in the immediately preceding assessment year, i.e., AY 2017-18, wherein he had disallowed depreciation specifically holding that the depreciation cannot be allowed in the absence of nature and break-up details of Intangible assets. The Ld.AR submitted that the assessee actually did not claim any depreciation in AY.2017-18 and hence the question of making any disallowance did not arise in that year. However, the AO disallowed depreciation amount of Rs.7.55 crores under erroneous impression that the assessee had claimed the same. Hence, the assessee has moved a rectification petition u/s 154 of the Act in AY 2017-18 for correcting above said mistake apparent from record and the same is still pending before him. He submitted that the assessee has, however, claimed depreciation on intangible assets in both the years under consideration and the sam....