Case Law Details
Chhattisgarh State Power Transmission Company Ltd Vs ACIT (ITAT Raipur)
ITAT Raipur held that assessee company was entitled for depreciation on WDV on consideration that was paid by it and not on WDV that was lastly shown by CSEB, before its disintegration.
Facts- The assessee company which is owned by the State Government of Chhattisgarh and is engaged in the business of transmission of electricity in the state of Chhattisgarh was formed after the disintegration of erstwhile Chhattisgarh State Electricity Board. The return of income was e-filed by the assessee company for A.Y.2011-12 on 31.03.2013, declaring a loss of Rs.(-) 41,21,48,674/-(as per revised return). Case of the assessee was, thereafter, selected for scrutiny assessment u/s.143(2) of the Act.
It was observed by the A.O that the assessee company had, inter alia, raised a claim for depreciation of Rs.155,28,95,676/- on the basis of WDV received as per the transfer scheme. However, the A.O was of the view that the assessee company was entitled for depreciation on the WDV that was lastly shown by CSEB, before its disintegration, for each block of assets, which thereafter, were ultimately transferred to all the new companies formed on its disintegration, viz. CSPGCL, CSPTCL (i.e. assessee company), CSPDCL and CHPHCL. The A.O on the basis of his aforesaid observations restricted the assessee’s claim for deprecation to an amount of Rs.140,28,29,892/-. Accordingly, the assessee’s claim for excess depreciation of Rs.15,00,65,784/- was disallowed by the A.O.
It was observed by the A.O that the assessee company had failed to come forth with the relevant details with respect to its claim for deduction of repair and maintenance expenses. The A.O observing that his predecessor while framing assessment for the preceding years had held 2/3rd part of the expenditure as capital expenditure and restricted its entitlement under similar circumstances to 1/3rd of its claim for deduction of revenue expenditure, thus, adopted the same approach and disallowed an amount of Rs.14,40,56,831/- out of the aforesaid claim for deduction of repair and maintenance expenses as was raised by the assessee company.
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