Case Law Details
Dakshin Gujarat Vij. Co. Ltd. Vs DCIT (ITAT Ahmedabad)
ITAT Ahmedabad held that an appellate authority can exercise the power u/s. 251(1)(a) to enhance the assessment only after giving a notice for enhancement. Accordingly, enhancement by CIT(A) without issuance of notice is untenable in law.
Facts- The assessee company is an undertaking of Government of Gujarat, came into existence on reorganization of erstwhile Gujarat Electricity Board (GEB). The assessee company is engaged in the activity of distribution of power.
AO noted that the assessee purchased certain fixed assets on 31st March 2006 for the amount aggregating to Rs. 229,49,35,998/- and claimed that the same has been “put to use” on 31st March 2006 only. AO held that the assessee failed to justify the assets purchased on 31st March 2006 were actually put to use on 31st March 2006 only. Thus, the AO disallowed the claim of depreciation on such assets for the year under consideration on reasoning that the assets were not put to use in the year under consideration.
Further, assessee also contested that CIT(A) erred in enhancing the assessed income by making disallowances of deferred revenue expenses of Rs. 41,16,442/-.
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