Vikas Goyal Vs DCIT (ITAT Bangalore)
143(1) Has Its Limits: ITAT Bangalore Allows 30% Depreciation on Goods Carriages; CPC Cannot Decide Debatable Issues at Processing Stage
Bangalore ‘ ITAT quashed the adjustment made by CPC while processing the return u/s 143(1) and allowed the Assessee’s claim of higher depreciation @30% on goods carriage vehicles used in transportation business.
The Tribunal held that CPC exceeded its jurisdiction by restricting depreciation to 15% and disallowing ₹25,04,890/-, as the issue whether vehicles are used in a business of running them on hire is a debatable issue requiring factual verification, and cannot be treated as an “incorrect claim apparent from the return”. Such matters fall outside the limited scope of prima facie adjustments permissible u/s 143(1), which is co-terminus with rectification u/s 154.
Relying on the Supreme Court decision in Gupta Global Exim Pvt. Ltd. (305 ITR 132) and CBDT Circular No.652 dated 14-06-1993, the Tribunal reiterated that higher depreciation @30% is admissible on goods carriages used in the Assessee’s own transportation business. It was further held that once deeper examination of facts is required, the CPC must resort to scrutiny proceedings and not make mechanical adjustments at the processing stage.
Accordingly, the ITAT directed deletion of the entire disallowance made u/s 143(1) and allowed the Assessee’s appeal in full.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
