Maxxis Rubber India Pvt. Ltd Vs PCIT (ITAT Ahmedabad)
ITAT Ahmedabad held that law doesn’t require brought forward additional depreciation from preceding year to be set off against opening WDV of the assets. Thus, revision u/s. 263 of the Income Tax Act not sustained as order of AO not erroneous.
Facts- The present appeal has been filed by the assessee against the order passed by PCIT, Ahmedabad-1 dated 18.03.2025 passed u/s. 263 of the Income Tax Act, 1961. The order of PCIT reveals that the assessment order passed in the case of the assessee u/s. 143(3) of the Act was found to be erroneous causing prejudice to the Revenue on account of having allowed excess claim of depreciation to the assessee as per Section 32(1) of the Act. As per PCIT, the assesee had claimed excess depreciation pertaining to 15% of the remaining 50% additional depreciation, which as per his calculation amounted to Rs. 3,03,22,137/-.
Conclusion- Held that there is no provision in law requiring brought forward additional depreciation from preceding year to be set off against opening WDV of the assets and depreciation thereafter for the year being calculated by applying prescribed rate to the balance WDV of the assets. Therefore, we have no hesitation in holding that the Ld. PCIT was wrong in holding the assessment order passed in the case of the assessee to be erroneous for having allowed depreciation on the opening WDV without setting off brought forward additional depreciation of preceding year. The finding of error in the order of the AO by the Ld. PCIT, is therefore, we hold, incorrect. Thus, the order passed by the Ld. PCIT in the present case under Section 263 of the Act is held not sustainable. In the result, the appeal of the assessee is allowed.
