Srei Equipment Finance Limited, Kolkata V. PCIT-2, Kolkata

ITA 163/KOL/2021

AI Insights

The case involves Srei Equipment Finance Limited appealing against the order passed by the Principal Commissioner of Income Tax, Kolkata-2, under section 263 of the Income Tax Act, 1961, which directed a fresh assessment. The original assessment for AY 2015-16 had been completed under section 143(3) r.w.s. 144C(1), where the Assessing Officer made certain additions and disallowances. The Principal Commissioner later found the assessment order to be erroneous and prejudicial to the interests of the Revenue, leading to the revisionary proceedings. The Tribunal examined three main issues: the write-back of provision for NPA, disallowance of CSR expenses, and disallowance of additional depreciation, concluding that the original assessments were correct and did not require revision.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 128692 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 10 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 04-01-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 02-05-2021
• Other Referred Cases: Malabar Industrial Co. Ltd. vs. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revision of order; Depreciation; Opportunity of being heard; Additional depreciation; Period of limitation; Assessment record; Revised return
• Section: 263; 143(3); 32(1)(iia); 37(1); 43; 13; 22

Judgement Text

आयकर अपीलीय अधिकरण कोलकाता 'ए' पीठ, कोलकाता म ें IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘A’ BENCH, KOLKATA श्री संजय गग ग , न्याधयक सदस्य एवं डॉ. मनीष बोरड, ल े खा सदस्य क े समक्ष Before SRI SANJAY GARG, JUDICIAL MEMBER & DR. MANISH BORAD, ACCOUNTANT MEMBER I.T.A. No.: 163/KOL/2021 Assessment Year: 2015-16 Srei Equipment Finance Limited..............................Appellant [PAN: AAKCS 3431 L] Vs. Pr. CIT, Kolkata- 2, Kolkata..................................Respondent Appearances by: Sh. S.K. Tulsiyan, Adv. and Smt. Puja Somani, CA., appeared on behalf of the Assessee. Sh. Subhrajyoti Bhattacharjee, CIT (D/R), appeared on behalf of the Revenue. Date of concluding the hearing : January 5 th , 2023 Date of pronouncing the order : March 29 th , 2023 ORDER Per Manish Borad, Accountant Member: This appeal filed by the assessee pertaining to the Assessment Year (in short “AY”) 2015-16 is directed against the order passed u/s 263 of the Income Tax Act, 1961 (in short the I.T.A. No.: 163/KOL/2021 Assessment Year: 2015-16 Srei Equipment Finance Limited. Page 2 of 17 “Act”) by ld. Pr. Commissioner of Income-tax, Kolkata-2, Kolkata [in short ld. “CIT(A)”] dated 04.03.2021. 2. The assessee is in appeal before this Tribunal raising the following grounds: “1. That on the facts and in the circumstances of the case, the Learned Principal Commissioner of Income Tax - 2, Kolkata, (here- in- after referred to as Ld. Pr. CIT) was not justified in initiating proceedings u/s 263 of the Income Tax Act, 1961 since the order passed by the Assessing Officer (A.O.) was neither erroneous nor prejudicial to the interest of the revenue. 2. That on the facts and in the circumstances of the case, the impugned order passed u/s 263 is grossly arbitrary and bad in law in relation to the issues raised and adjudicated therein and needs to be summarily quashed. 3. That the Ld. Pr. CIT has erred both on facts and in law, in assuming and exercising the jurisdiction u/s 263 of the Income Tax Act, 1961 without considering the material fact that during the course of the assessment proceedings, the assessee had brought on records all the materials and evidences relating to the issues and the same were duly verified by the AO before passing the impugned assessment order. 4. That on the facts and in the circumstances of the case and without prejudice to Ground No. 1, 2 & 3 above, the Ld. Pr. CIT was not justified and grossly erred in directing the AO to examine the claim for exclusion of provision for NPA of Rs. 64,74,97,633/- written back without appreciating the fact that provision for NPA made in earlier years was duly added back. 5. That on the facts and in the circumstances of the case and without prejudice to Ground No. 1, 2 and 3 above, the Ld. Pr. CIT was not justified and grossly erred in directing the AO to disallow CSR expenses to the tune of Rs. 1,27,00,000/- without appreciating the fact that appellant had itself added back CSR expenses while computing total income in the Return of Income. 6. That on the facts and in the circumstances of the case and without prejudice to Ground No. 1, 2 and 3 above, the Ld. Pr. CIT was not justified and grossly erred in in directing the AO to disallow additional I.T.A. No.: 163/KOL/2021 Assessment Year: 2015-16 Srei Equipment Finance Limited. Page 3 of 17 depreciation to the tune of Rs. 87,08,860/- without appreciating the fact that appellant had itself withdrawn the claim in the Revised Return of Income and hence it was never allowed by the Assessing officer in the order u/s 143(3). 7. That the appellant craves to leave, add, amend, modify, rescind, supplement or alter any of the Grounds stated here-in-above, either before or at the time of hearing of this appeal.” 3. Brief facts of the case as culled out from the records are that the assessee is a limited company. Assessment u/s 143(3) r.w.s. 144C(1) of the Act AY 2015-16 completed on 27.02.2019 assessing income at Rs. 174,68,89,836/- as against the return of income of Rs. 127,08,64,720/-. Thereafter, ld. Pr. CIT called for the assessment records and issued following show cause notice u/s 263 of the Act: “Whereas the undersigned had called for and examined the record of your case and it is considered that the impugned assessment order passed u/s 143(3) r.w.s. 144C(1) of the I T Act, 1961 by the DCIT, Circle-11(1), Kolkata on 27.02.2019 for A.Y. 2015-16 is prima facie, erroneous in so far as it is prejudicial to the interests of the revenue for the following reasons: In the instant case following observations have been made.(i) the assessee has written back provision for NPA amounting to Rs. 64,74,97,633/- and consequently reduced from the income. This write back was on account of gross provision (before write back) made in A.Y. 2012-13 to A.Y. 2014-15. In the assessment u/s 143(3) completed for A.Y. 2012-13 and A.Y. 2013-14, the provision was added back. Accordingly, in the computation of income the assessee had claimed provision for NPA written back against provision made in A.Y. 2012-13 & A.Y. 2013-14 on protective basis. Further, the assessee in its submission stated that in case claimed amount in A.Y. 2012-13 & 2013-14 is allowed in appeal, the aforesaid claim be treated as withdrawn. As the matter is pending in appeal, the assessee is not allowed to write back Provision for NPA on protective basis as per the Income Tax Act, 1961, (ii) the assessee has debited CSR expenses to the tune of Rs. 1,27,00,000/-. However, the same is not an allowable expense as per Section 37(1) of the Income Tax Act, I.T.A. No.: 163/KOL/2021 Assessment Year: 2015-16 Srei Equipment Finance Limited. Page 4 of 17 1961 and is required to be added back to the total income of the assessee. (iii) as per Form 3CD it was noted that the assessee company has claimed depreciation of Rs. 3,04,55,58,016/- as per Income Tax Act, 1961. However, on further perusal of additional details (from point no. 18 of Form 3CD) it transpired that the assessee company has claimed excess depreciation of Rs. 87,08,860/- on the Block of Plant and machinery (80%) which is required to be disallowed, the details of which is given below: Block Opening Balance Purchase more than 180 days Purchase less than 180 days Dedu ction Total depreciation allowable Depreciation Allowed Difference P&M (80%) 65,26,2 97 3,03,54,407 31,45,10,006 15,53,08,56 5 16,40,17,42 5 87,08,86 0 Therefore, the assessment completed appears to be erroneous in so far as it is prejudicial to the interest of revenue. 2. Having regard to the facts and circumstances of the case and in law and in accordance with the provisions of Sec. 263(1) of I T Act, 1961 you are hereby given an opportunity of being heard to show cause as to why the impugned assessment order passed u/s 143(3) r.w.s. 144C(1) by DCIT, Circle-11 (1), Kolkata on 27.02.2019 for A.Y. 2015-16 should not be held as erroneous in so far as it is prejudicial to the interests of the revenue. You may accordingly furnish your written submissions u/s 263(1) of LT. Act, 1961 by 10.02.2021, in this regard elaborating and/or evidencing your contentions/submissions. Considering the pandemic situations arising due to COVID-19, physical attendance is not considered necessary and you are requested to make written submissions with necessary details through E-mail ID: and it will be treated as compliance to this notice u/s 263(1).” 4. Subsequently, revisionary proceedings u/s 263 of the Act were carried out and it was submitted by the assessee that the issues referred in the show cause notice have been examined by ld. AO carrying out detailed enquiries which thus, do not call for carrying out of alleged revisionary proceedings. However, ld. Pr. CIT was not satisfied and he after considering the submissions of I.T.A. No.: 163/KOL/2021 Assessment Year: 2015-16 Srei Equipment Finance Limited. Page 5 of 17 the assessee held the order of ld. AO as erroneous and prejudicial to the interests of the Revenue directing ld. AO to pass a fresh assessment order considering the directions given in para 5 of the impugned order which reads as follows: “5. I have considered the facts of the case and gone through submission of the assessee and details available on record. On perusal of assessment record and assessment order, it is observed that the A.O completed assessment accepting the claim of the assessee company. During the course of assessment proceedings, no explanation was called for, from the assessee in respect of written back provision for NPA amounting to Rs.64,74,97,633/- which was consequently reduced from the income. The assessee has debited CSR expenses to the tune of Rs.1,27,00,000/-. However, the same is not an allowable expense as per Section 37(1) of the Income Tax Act, 1961 and is required to be added back to the total income of the assessee. The assessee company has claimed depreciation of Rs. 3,04,55,58,016/- and further perusal of additional details, it transpired that the assessee company has claimed excess depreciation of Rs.87,08,860/- on the Block of Plant and machinery (80%) which is required to be disallowed. The assessee has failed to completely disclose its true and correct income by non-furnishing of details as required under provisions of IT Act, 1961. The A.O. has passed the assessment order without making enquiries or verification which should have been made in the instant case. Clause (a) of Explanation - 2 to Section 263(1) is attracted in this case. Accordingly, it is held that the assessment order is erroneous insofar as it is prejudicial to the interest of the revenue.” 5. Aggrieved, the assessee is now in appeal before this Tribunal. Ld. Counsel for the assessee vehemently argued referring to the written submissions placed on record and further, summarising the facts that as regards the issue of provisions of NPA at Rs. 64,74,97,633/- that provision of NPA written back during the year in computation of income for normal provisions was not on protective basis and no appeal has been filed by the assessee and I.T.A. No.: 163/KOL/2021 Assessment Year: 2015-16 Srei Equipment Finance Limited. Page 6 of 17 therefore suo-moto disallowed by the assessee in the computation of income at the earlier years. As regards disallowance of CSR expenses of Rs. 1.27 Cr it was stated that the assessee has suo- moto added the CSR expense in the computation of total income filed with the revised return of income and therefore, there is no prejudice caused to the Revenue. As regards the excess depreciation of Rs. 87,08,860/- ld. AO has allowed the depreciation of only Rs. 15,53,08,565/- in the revised return as against Rs. 16,40,70,425/- claimed in the original return. It was thus, contended that neither the order of ld. AO is erroneous nor prejudicial to the interests of the Revenue. 6. On the other hand, ld. D/R vehemently argued supporting the order of ld. CIT(A). 7. We have heard rival contentions and perused the records placed before us. The revisionary proceedings u/s 263 of the Act are in challenge before us. We find that the provision of Section 263 of the Act has direct bearing on the issue raised before us, therefore, it is pertinent to take note of this section which reads as under: "263(1) The Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. Explanation- For the removal of doubts, it is hereby declared that, for the purposes of this sub-section,- I.T.A. No.: 163/KOL/2021 Assessment Year: 2015-16 Srei Equipment Finance Limited. Page 7 of 17 (a) an order passed on or before or after the 1 st day of June, 1988 by the Assessing Officer shall include- (i) an order of assessment made by the Assistant Commissioner or Deputy Commissioner or the Income-tax Officer on the basis of the directions issued by the Joint Commissioner under section 144A; (ii) an order made by the Joint Commissioner in exercise of the powers or in the performance of the functions of an Assessing Officer conferred on, or assigned to, him under the orders or directions issued by the Board or by the Chief Commissioner or Director General or Commissioner authorized by the Board in this behalf under section 120; (b) record shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at the time of examination by the Commissioner; (c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject matter of any appeal filed on or before or after the 1 st day of June, 1988, the powers of the Commissioner under this sub-section shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal. (2) No order shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. (3) Notwithstanding anything contained in sub-section (2), an order in revision under this section may be passed at any time in the case of an order which has been passed in consequence of, or to give effect to, any finding or direction contained in an order of the Appellate Tribunal, National Tax Tribunal, the High Court or the Supreme Court. Explanation- In computing the period of limitation for the purposes of sub-section (2), the time taken in giving an opportunity to the assessee to be reheard under the proviso to section 129 and any period during which any proceeding under this section is stayed by an order or injunction of any court shall be excluded." 7.1. On a bare perusal of the sub section-1 would reveal that powers of revision granted by section 263 to the learned Commissioner have four compartments. In the first place, the I.T.A. No.: 163/KOL/2021 Assessment Year: 2015-16 Srei Equipment Finance Limited. Page 8 of 17 learned Commissioner may call for and examine the records of any proceedings under this Act. For calling of the record and examination, the learned Commissioner was not required to show any reason. It is a part of his administrative control to call for the records and examine them. The second feature would come when he will judge an order passed by an Assessing Officer on culmination of any proceedings or during the pendency of those proceedings. On an analysis of the record and of the order passed by the Assessing Officer, he formed an opinion that such an order is erroneous in so far as it is prejudicial to the interests of the Revenue. By this stage the learned Commissioner was not required the assistance of the assessee. Thereafter the third stage would come. The learned Commissioner would issue a show cause notice pointing out the reasons for the formation of his belief that action u/s 263 is required on a particular order of the Assessing Officer. At this stage the opportunity to the assessee would be given. The learned Commissioner has to conduct an inquiry as he may deem fit. After hearing the assessee, he will pass the order. This is the 4 th compartment of this section. The learned Commissioner may annul the order of the Assessing Officer. He may enhance the assessed income by modifying the order. He may set aside the order and direct the Assessing Officer to pass a fresh order. At this stage, before considering the multi-fold contentions of the ld. Representatives, we deem it pertinent to take note of the fundamental tests propounded in various judgments relevant for judging the action of the CIT taken u/s 263. I.T.A. No.: 163/KOL/2021 Assessment Year: 2015-16 Srei Equipment Finance Limited. Page 9 of 17 7.2. Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. vs. CIT (2000) 243 ITR 83 (SC) has laid down following ratio with regard to provisions of section 263 of the Act: “There can be no doubt that the provision cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer; it is only when an order is erroneous that the section will be attracted. An incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous. In the same category fall orders passed without applying the principles of natural justice or without application of mind. The phrase 'prejudicial to the interests of the revenue’ has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the revenue, for example, when an ITO adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the ITO has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the revenue unless the view taken by the ITO is unsustainable in law. It has been held by this Court that where a sum not earned by a person is assessed as income in his hands on his so offering, the order passed by the Assessing Officer accepting the same as such will be erroneous and prejudicial to the interests of the revenue - Rampyari Devi Saraogi v. CIT [1968] 67 ITR 84 (SC) and in Smt. Tara Devi Aggarwal v. CIT [1973] 88 ITR 323 (SC). [Emphasis Supplied]” 8. Now, three issues have been referred to in the impugned order; i) provision for NPA of Rs. 64,74,97,633/- written back, ii) CSR expenses claimed of Rs. 1.27 Cr and iii) excess depreciation of Rs. 8,70,860/-. 9. Now, we will examine the above three issues one by one keeping into consideration the original and revised return filed by the assessee along with the computation of income and the enquiries conducted by ld. AO. I.T.A. No.: 163/KOL/2021 Assessment Year: 2015-16 Srei Equipment Finance Limited. Page 10 of 17 10. As regards the provision for NPA at Rs. 64,74,97,633/- ld. Counsel for the assessee has appraised us about the facts of the issue in hand and the net amount offered in return of income during AY 2009-10 to AY 2014-15 in the following manner: “In the SCN dated 28-01-2021, the learned PCIT has stated that, “The assessee has written back provision for NPA amounting to Rs.64,74,97,633/- and consequently reduced from the income. This write back was on account of gross provision (before write back) made in A.Y. 2012-13 to A.Y. 2014-15. In the assessment u/s 143(3) completed for A.Y. 2012-13 and A.Y. 2013-14, the provision was added back. Accordingly, in the computation of income the assessee had claimed provision for NPA written back against provision made in A.Y. 2012-13 & A.Y. 2013-14 on protective basis. Further, the assessee in its submission stated that in case claimed amount in A.Y. 2012-13 & 2013-14 is allowed in appeal, the aforesaid claim be treated as withdrawn. As the matter is pending in appeal, the assessee is not allowed to write back Provision for NPA on protective basis as per the Income Tax Act, 1961.” This according to PCIT has made the assessment order erroneous and prejudicial to the interest of the revenue. In this regard, your kind attention is invited to Form 29B filed by the assessee, refer page 19-22. On perusal of Note 5, refer page 22 of the paper book, it may kindly be seen that the assessee here was referring to the computation of income under MAT provisions. The relevant extract of the Note is reproduced below: “During the year, the company has written back Provision for NPA amounting to Rs.64,74,97,633/-. The above write back was on account of gross provision (before write back) made in A.Y. 2012-13 to A.Y. 2014-15. In the assessment u/s 143(3) completed for A.Y. 2012-13 and A.Y. 2013-14, the provision for NPA was added back (net of write back for earlier years). Accordingly, in the computation of book profit above, the assessee has claimed provision for NPA written back against provision made in A. Y. 2012-13 & A.Y. 2013-14 on protective basis. In case claim in A.Y. 2012-13 & 2013-14 is allowed in appeal, the aforesaid claim be treated as withdrawn.” I.T.A. No.: 163/KOL/2021 Assessment Year: 2015-16 Srei Equipment Finance Limited. Page 11 of 17 The assessee has written back Provision for NPA amounting to Rs.46,75,71,359/- in computation of book profits on protective basis. The said claim of the assessee was not allowed by the learned AO in the assessment order passed u/s 143(3) of the Act. The relevant part of the order is reproduced below: ‘10. Provision for NPA written back As per the calculation of MAT, the assessee has excluded Rs.46,75,71,539/- on account of provision for NPA written back during the year on the basis that it was added back in earlier year. Since the assessee has not accepted the addition made on account of NPA in MAT calculation it cannot claim write back to be excluded during the year under consideration. Therefore, Rs. 46,75,71,359/- is added back to the income for MAT calculation. Penalty proceedings u/s 271(l)(c) of the Income Tax Act, 1961 is initiated separately. [Add: Rs. 46,75,71,359/-] ’ Hence, the learned PCIT failed to appreciate the facts of the case and erred in his understanding that the said provision for NPA relates to computation of income under normal provisions and that the assessee is not allowed to write back Provision for NPA on protective basis as per the Income Tax Act, 1961. Here, it is humbly submitted that Provision for NPA written back during the year of Rs.64,74,97,633/-in computation of income for normal provisions was not on protective basis and no appeal has been filed by the assessee w.r.t the provision for NPA added back by the learned AO in the order passed u/s 143(1)/254(D) of the Act dated 27-09-2011 and suo moto disallowed by the assessee in the computation of income of the earlier years as per the chart below. It is further submitted that as a common practice, in computation of total income under normal provisions, provision for NPA debited during the year is added back i.e the same is not claimed as deduction in computation of income. Status of Provision for NPA in earlier years added back in normal computation is as under:- A.Y. Net amount offered in ROI and/or permanently disallowed (Amount in Rs.) Refer Pg of the paper book Remarks AY 2009- 10 38,67,02,214 29-30 Disallowed by the AO in the order passed u/s 143(1)/254(D) of the Act dated 27-09-2011 by virtue of I.T.A. No.: 163/KOL/2021 Assessment Year: 2015-16 Srei Equipment Finance Limited. Page 12 of 17 settlement order dated 29-07- 2011. AY 2011- 12 19,43,15,400 33 Suo moto disallowed by the assessee in the computation of income AY 2012- 13 2,61,95,220 38 Suo moto disallowed by the assessee in the computation of income AY 2013- 14 4,57,16,887 43 Suo moto disallowed by the assessee in the computation of income AY 2014- 15 6,43,76,878 46 Suo moto disallowed by the assessee in the computation of income Total 71,73,06,600/- It is further submitted that during the course of assessment, the assessee was asked to furnish the details for Non-Performing assets written back and claimed in computation of income. The assessee submitted that out of the sum of Rs.71,73,06,600/-, it has claimed write back of provision for NPA amounting to Rs.64,74,97,633/- under normal provisions and Rs.46,75,71,359/- under MAT provisions. The above details were duly submitted during the course of assessment vide letter dated 24-12-2018. Copy of the letter was duly submitted before the learned PCIT also, copy enclosed at page 50-52 of the paper book. It was also submitted that after due verification, the learned AO in his assessment order allowed the deduction of Rs.64,74,97,633/- in computing total income under normal provisions but disallowed the claim of Rs.46,75,71,359/- in computation of income under MAT provisions. Here, it is further submitted that the sum of Rs.64,74,97,633/- was already added back by the assessee in computation of income under normal provisions for AYs 2009-10, 2011-12, 2012-13, 2013-14 and 2014-15, thus adding the same again in the current year would tantamount to double addition of the same income. Thus, it is humbly submitted that this issue was duly examined by the learned AO during assessment and after due verification he has taken a plausible view to add back the sum of Rs.46,75,71,359/- in computation of income under MAT provisions and not to disallow the claim of Rs.64,74,97,633/- made by the assessee in computation of income under normal provisions since the same will amount to double addition of the same amount. Hence, on the backdrop of the above facts, the assessment order cannot be said to be erroneous or prejudicial to the interest of the revenue to trigger the provisions of section 263 of the Act. I.T.A. No.: 163/KOL/2021 Assessment Year: 2015-16 Srei Equipment Finance Limited. Page 13 of 17 However, the learned PCIT did not properly peruse the assessment records and also failed to appreciate the submissions filed by the assessee and held that, “During the course of assessment proceedings, no explanation was called for, from the assessee in respect of written back provision for NPA amounting to Rs.64,74,97,633/- which was consequently reduced from the income.” On such wrong facts, he held that the AO has passed the assessment order without making enquiries or verification which should have been made in the instant case and thus clause (a) of explanation — 2 to section 263(1) of the Act is attracted. Hence, the assessment order is erroneous and prejudicial to the interest of the revenue on this ground. Here, your kind attention is again invite to page 51 of the paper book. On perusal of the same, it may kindly be note that the assessee was asked to furnish details of provision for NPA written back in accounts and claimed in computation of total income. On perusal of the submissions made by the assessee dated 24-12-2018, the learned AO took a possible view that the claim of Rs.64,74,97,633/-made by the assessee in computation of income under normal provisions is an allowable claim and hence no disallowance was made in this regard in the assessment order. To substantiate that the letter dated 24-12- 2018 was filed by the assessee was duly acknowledged by the learned AO, reference is made to Para 9.0 of the assessment order wherein it is stated that, ‘The assessee made a detailed reply on 24-12-2018 regarding the same’ As such, it is evident that letter dated 24-12-2018 was in the assessment records and hence, it cannot be said that lno explanation was called for, from the assessee in respect of written back provision for NPA amountingto Rs.64,74,97,633/- which was consequently reducedfrom the income. ” As such, this allegation of the learned PCIT is incorrect. Further, please note that if a query has been raised at the time of assessment and the same was duly responded to by the assessee, it would not lead to the conclusion that the AO has passed the assessment order without making adequate enquiries/verification which he was required to make so as to render the assessment order erroneous and prejudicial to the interests of the revenue. Further, it is I.T.A. No.: 163/KOL/2021 Assessment Year: 2015-16 Srei Equipment Finance Limited. Page 14 of 17 a trite proposition that in a case where the AO has taken a plausible view, then the CIT is not permitted to substitute his own view because he disagrees with the view of the AO to warrant initiation of proceedings u/s 263 of the Act.” 11. From perusal of the above submissions which remained uncontroverted by ld. D/R, we are satisfied that firstly, ld. AO conducted necessary enquiry on this issue of provisioning for non- performing assets and we also find that in the computation of total income under normal provisions, provision for NPA debited during the year is added back i.e. not claimed as deduction. The assessee submitted that the details for the AY 2009-10 to AY 2014-15 out of the total amount disallowed by ld. AO/suo-moto disallowed by the assessee of Rs. 71,73,06,600/- it claimed write back of provision for NPA at Rs. 64,74,97,633/- under normal provisions and of Rs. 46,75,71,359/- under MAT provision. These details were filed before ld. AO who has passed the assessment order after conducting the necessary enquiries. Further, we find that since the alleged sum of Rs. 64,74,97,633/- was already added back by the assessee in the computation of income under normal provisions for AY 2009-10 to AY 2014-15 adding the same in the current year would tantamount to double addition. Under these given facts and circumstances since the enquiry has been conducted on this issue and the alleged sum has already been offered to tax in the preceding years neither the order of ld. AO is erroneous nor prejudicial to the interests of the Revenue. 12. Now, we take the second issue of CSR expenses of Rs. 1.27Cr. From perusal of the computation of income under normal provisions we find that the assessee has suo-moto added back the I.T.A. No.: 163/KOL/2021 Assessment Year: 2015-16 Srei Equipment Finance Limited. Page 15 of 17 alleged CSR expenses in the computation of income filed with the revised return of income and offered it to tax. Under these given facts we do not find any justification in the finding of ld. Pr. CIT invoking the revisionary proceedings and restoring it for examination of ld. AO. 13. Now, we take the third issue regarding excess depreciation of Rs. 87,08,860/-. The learned PCIT in the show cause notice stated that as per Form 3CD it was noted that the assessee company has claimed depreciation of Rs.3,04,55,58,016/- as per Income Tax Act, 1961. However, on further perusal of additional details (from point no. 18 of Form 3CD) it transpired that the assessee company has claimed excess depreciation of Rs.87,08,860/- on the Block of Plant and machinery (80%) which is required to be disallowed, the details of which is given below: Block Opening Balance Purchase more than 180 days Purchase less than 180 days Dedu ction Total depreciatio n allowable Depreciation Allowed Differenc e P&M (80%) 65,26,297 3,03,54,40 7 31,45,10,0 06 15,53,08,5 65 16,40,17,42 5 87,08,86 0 14. In this connection, it was submitted that the difference in depreciation of Rs.87,08,860/- was on account of Additional Depreciation u/s 32(1)(iia) on Block of Plant & Machinery (80%). The claim of additional depreciation, though made by the assessee in its Original Return, was subsequently withdrawn by the assessee in the Revised Return. Details of depreciation claimed in the Original Return vis-a-vis the Revised Return is as under:- Particulars Depreciation claimed in Original Return Depreciation claimed in Revised Return Difference P & M (80%) 16,40,17,425 15,53,08,565 87,08,860 I.T.A. No.: 163/KOL/2021 Assessment Year: 2015-16 Srei Equipment Finance Limited. Page 16 of 17 Other Depreciable Assets 2,90,96,49,905 2,89,02,49,451 1,94,00,454 Total 3,07,36,67,330 3,04,55,58,016 2,81,09,314 15. On perusal of the above, it is evident that depreciation of only Rs. 15,53,08,565/- was claimed in the Revised Return on the 80% block. Computation of income under Normal provisions for the relevant assessment year filed with the revised return of income showing the reduced claim of depreciation was also submitted. It was also submitted that in the assessment order passed u/s 143(3) of the Act, the learned AO has also allowed depreciation of Rs. 15,53,08,565/- as claimed by the assessee in the revised return depreciation and not Rs. 16,40,17,425/- as claimed in the original return. However, we find that ld. Pr. CIT failed to appreciate the submissions filed by the assessee and held that the assessee failed to completely disclose its true and correct income by non-furnishing of details as required under the provisions of Income Tax Act and held that the assessment order is erroneous and prejudicial on this ground. We, therefore, are of the considered view that the assessee has revised the depreciation claim and reduced it by Rs. 87,08,860/- which thus brings to a conclusion that there is no prejudice caused to the Revenue. 16. We, therefore, under the given facts and circumstances of the case are of the considered view that ld. Pr. CIT erred in invoking the jurisdiction u/s 263 of the Act on the above stated three issues which have been examined by ld. AO and in the alternate the assessee has suo-moto offered it to tax and therefore, for these reasons the order of ld. AO cannot be held to be erroneous and prejudicial to the interests of the Revenue. We accordingly quash I.T.A. No.: 163/KOL/2021 Assessment Year: 2015-16 Srei Equipment Finance Limited. Page 17 of 17 the impugned proceedings and restore the assessment order u/s 143(3) r.w.s. 144C(1) of the Act dated 27.02.2019. Hence all the grounds of appeal raised by the assessee are allowed. 17. In the result, the appeal filed by the assessee is allowed. Kolkata, the 29 th March, 2023 Sd/- Sd/- [Sanjay Garg] [Manish Borad] Judicial Member Accountant Member Dated: 29.03.2023 Bidhan (P.S.) Copy of the order forwarded to: 1. Srei Equipment Finance Limited, 86C, Vishwakarma, Topsia Road (South), Topsia, Kolkata -700 046. 2. Pr. CIT, Kolkata- 2, Kolkata. 3. CIT(A)- 4. CIT- 5. CIT(D/R), Kolkata Benches, Kolkata. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata