Dakshin Gujarat Vij Co. Ltd. Vs DCIT (ITAT Ahmedabad)
Conclusion: Tribunal allowed a claim of Rs. 49.5 crore in the interest of Principle of Natural Justice after finding that the respective authorities failed to appreciate the amended provision of Section 36(1)(iia) of the Income Tax Act, 1961, resulting in the denial of an additional depreciation claim.
Held: Assessee was a company engaged in the business of distribution of electricity. It filed its e-Return of Income on 26.10.2017 declaring Nil income after setting off unabsorbed depreciation loss to the extent of Rs.36,26,50,987/, but a book profit of Rs. 136,80,76,197/-. AO disallowed the claim of additional depreciation ₹.49,52,66,000/ on the ground that assessee failed to submit the details and establish the genuineness of the expenditure. On further appeal CIT(A) held that that assessee had given sample copies of bills before AO, however, it was seen that assessee was in the business of distribution of power, which was covered under section 32(1)(iia). There were certain other conditions, which were required to be satisfied for claiming additional depreciation. Assessee failed to file the required details as per Section 32(1)(iia) therefore, assessee was not entitled for the claim of additional depreciation. It was held that assessee had not produced the details of additional depreciation before AO, it was seen from the submissions made by assessee, detailed submissions on additional depreciation with Annexures were submitted by assessee. But the lower authorities failed to consider the amended provisions of law and denied the claim of additional depreciation to assessee. Therefore, in the interest of Principle of Natural Justice, this issue was set aside to the file of Jurisdictional AO to verify the claim of additional depreciation and allow the same in accordance with the provisions of amended law.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
These cross appeals are filed by the Assessee and Revenue as against separate appellate orders both dated 30.03.2023 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the assessment orders passed under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Years (A.Ys) 2017-18 & 2018-19. Since common issues are involved in all these appeals, the same are disposed of by this common order.
2. We take up ITA No. 330/Ahd/2023 (Assessee’s appeal) relating to the Assessment Year 20 17-18 as the lead case. The brief facts of the case is that the assessee is a company engaged in the business of distribution of electricity. The assessee company filed its e-Return of Income on 26.10.2017 declaring Nil income after setting off unabsorbed depreciation loss to the extent of Rs.36,26,50,987/, but a book profit of Rs. 136,80,76,197/-. The case was selected for scrutiny and assessment order u/s. 143(3) was passed on 30.12.2019 by making additions and disallowances in the assessment order as follows:
