ACIT, Gandhinagar Vs Gujarat State Energy Generation Ltd (ITAT Ahemdabad) –
Whether the assessee which once opted for SLM method of depreciation, can change it to WDV by filing a valid revised return before the assessment is made – Whether the expenses for which the liability has crystallized during the year cannot be treated as prior period expenses ?
It can be held that where the assessee in required to exercise an option before a particular date and thus such option is exercised in the original return, yet if the assessee files a valid revised return, the option cannot he said to have been exercised and he will have right to change his option by filing afresh and revised return before the assessment is made for that year, In view of this, it can be held that the option exercised by the assessee in respect of claim on depreciation on SLM method gets substituted by the option of claim of depreciation as per WDV method. Accordingly, the Assessing Officer is directed to allow the depreciation on the basis of revised claim made m the revised return.
Whether the adjustment can be made in the book profit u/s 115JB for the items which are not mentioned specifically in the explanation to section 115JB ?
The matter has been considered. The decision of Hon’ble Supreme Court in the case of Apolly Tyres (supra) is quite unambiguous. Only such items which are specifically mentioned in the Explanation to section 115JB need to be excluded or included, as the case be, and nothing more can be brought in. All the three items listed above do not feature in the Explanation. Otherwise, the disallowance u/s.14A would be material in computation of the normal process of income while the second item interest on investment in bonds stands already included in the book profit. As far as the prior period expenses are concerned, there is no such mention in the explanation. The assessment order on the other hand is silent as to under which category it is being included for the matter to be further analyzed. Therefore, as the matter stands, none of the three items can be added for computation of book profit.
Whether the assessee is entitled to deduction u/s 80IA even when there is no positive income?
In the impugned order, the Learned Commissioner of Income Tax(Appeals) held that there is no positive income, therefore assessee is not in a position to claim deduction under section 80- IA in this year. Further, if situation happens i.e. there is positive income for this year, ld. CIT(A) directed the Assessing Officer to discuss the issue of allow ability of deduction under section 80IA and take into account the decision of CIT Vs. Eltek SGP Ltd. before giving any conclusion. At the time of hearing, ld. Counsel of the assessee could not point out what is the infirmity in the directions given by the Learned Commissioner of Income Tax(Appeals). We, therefore, decline to interfere. Hence, ground no.1 of the assessee’s appeal is rejected.
IN THE INCOME TAX APPELLATE TRIBUNAL : ‘B’ BENCH : AHMEDABAD
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