2024 (1) TMI 1565

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....the Income Tax Act, 1961 (here-in-after referred to as "the Act") relevant to the Assessment Year 2015-2016. 2. The only issue raised by the assessee is that the learned PCIT under section 263 of the Act erred in holding the assessment framed under section 143(3) of the Act as erroneous insofar prejudicial to the interest of revenue. 3. Briefly, stated facts are that the assessee in the present case is a private limited company and engaged in the activity of the power industry. The assessee in the year under consideration has claimed depreciation on the Windmill at the rate of 80% on the value of the Windmill which was also allowed by the AO in the assessment framed under section 143(3) of the Act. 4. However, the learned PCIT on e....

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....7. It was further pointed out by the learned AR in the said arguments that even assuming that the correct rate of depreciation is 50% on the value of the Windmill, then also there is no tax liability accruing upon the assessee. In other words, at the most the assessment order can be termed as erroneous but there is no loss to the revenue. It is for the reason that even the depreciation is claimed at the rate of 15%, the assessee is not liable to make any payment of income tax on account of losses and unabsorbed depreciation. 8. It was also submitted that the Windmill was sold out by the assessee in the assessment year 2019-20 and short-term capital gain was determined considering the rate of depreciation at the rate of 80% on the value o....

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....icial to the interest of revenue have not been fulfilled. The limited controversy is this that what should be the rate of depreciation in case of the Windmill whether it should be 80% or 15% on the value of the windmills. Admittedly the Windmill was sold out by the assessee in the assessment year 2019-20 and short-term capital gain was accordingly worked out by the assessee in the assessment year 2019-20. 9.2 We further note that even the depreciation is allowed to the assessee at the rate of 15% in the year in dispute, there is no taxable income in the hands of the assessee on account of business loss. Thus, we can safely hold that there can be an error in the assessment order but the same cannot be termed as prejudice to the interest o....