ITAT directs AO to consider allowability of Additional depreciation claimed during assessment proceedings

Lord Krishna Rice Mills Vs ITO (ITAT Delhi)

Whether the assessee can claim additional depreciation which was not claimed in the original return or not claimed through revised return, but, was claimed during the course of assessment proceedings. As per the decision of the Hon’ble Supreme Court in the case of M/s Goetze (India) Ltd. vs. CIT (supra), the decision was limited to the powers of the assessing authority and does not impinge on the power of the Income-tax Appellate Tribunal u/s 254 of the Income-tax Act, 1961. We, therefore, direct the AO to adjudicate the issue of additional depreciation which was not claimed by the assessee either in the original return or during the revised return on the basis of the fact and law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.

FULL TEXT OF THE ORDER OF ITAT DELHI

This appeal filed by the assessee is directed against the order dated 27^th September, 2019 of the CIT(A), Karnal, relating to the assessment year 2014-15.

2. Facts of the case, in brief, are that the assessee is a partnership firm and derives income from manufacturing and trading of rice by husking of paddy and sales thereof. It filed its return of income on 25^th September, 2013 declaring an income of Rs.3,41,830/-. The AO completed the assessment u/s 143(3) of the Act on 15^th February, 2016 determining the total income of the assessee at Rs.7,65,330/- wherein he made certain additions. During the course of assessment proceedings, the assessee has claimed additional depreciation on purchase of machinery of Rs.1,17,14,501/-. The claim of the assessee for additional depreciation was rejected by the AO keeping in view of the decision of the Hon’ble Supreme Court in the case of M/s Goetze (India) Ltd. vs. CIT reported in 284 ITR 323, since the said additional depreciation was not claimed by the assessee either in the original return or through the revised return.

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