M/s. Delhi Aviation Services Pvt. Ltd., New Delhi V. Pr. CIT, New Delhi

ITA 2989/DEL/2015

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0314 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Appeal Filed On: 14-05-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST DATED PASSED
• Keywords: Depreciation; Revised return; TDS; Set aside
• Section: 143(3); 13; 32; 263

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G: NEW DELHI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO.2989/DEL/2015 ASSTT. YEAR: 2011-12 O R D E R PER SUDHANSHU SRIVASTAVA, JM: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST O RDER DATED 27.3.2015 PASSED BY THE LD. PRINCIPAL COMMISSIONER OF INCOME TAX, DELHI-3 {PR. CIT} FOR ASSESSMENT YEAR 2011-12 WHEREIN, VIDE THE IMPUGNED ORDER, THE LD. PR. CIT HAS HELD THAT T HE ORIGINAL ASSESSMENT ORDER IN THE ASSESSEES CASE PASSED U/S 143(3) OF THE M/S. DELHI AVIATION SERVICES PVT . LTD. NEW UDAAN BHAWAN, OPP. TERMINAL-3, INDIRA GANDHI INTERNATIONAL AIRPORT, NEW DELHI 110 037 PAN AACCD6349L VS. PR. CIT DELHI-3, ROOM NO. 394-A, C.R. BUILDING, I.P. ESTATE NEW DELHI 110 002 (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI A NKIT A GARWAL, CA DEPARTMENT BY : SHRI S.S. RANA, CIT (DR) DATE OF HEARING 09 / 12 /201 9 DATE OF PRONOUNCEMENT 30 / 1 2 /2019 IT A NO. 2989/DEL/2015 DELHI AVIAT ION SERVICES PVT. LTD. VS PR. CIT 2 INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) VIDE ORDER DATED 11.12.2013 WAS PASSED WITHOUT PROPER APPRECIA TION OF FACTS OF THE CASE AND WITHOUT DUE APPLICATION OF PR OVISION OF LAW IN SO FAR AS DEPRECIATION WAS ALLOWED AT 100% AND F INANCE COST WAS ALLOWED AS DEDUCTION ALTHOUGH IT WAS ATTRIBUTAB LE TO THE PERIOD PRIOR TO THE COMMENCEMENT OF BUSINESS. 2.0 BRIEF FACTS OF THE CASE ARE THAT THE ASS ESSEE HAD FILED ITS RETURN OF INCOME SHOWING A LOSS OF RS. 54,53,847/- . THEREAFTER, THE RETURN WAS REVISED DECLARING A LOSS OF RS. 41,8 9,49,543/-. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT AT THE REVISED LOSS OF RS. 41,89,49,543/-. 2.1 THEREAFTER, ON SCRUTINY OF ASSESSMENT RECOR DS IT WAS SEEN THAT THE ASSESSEE COMPANY WAS ENGAGED IN MANAG ING OPERATIONS OF GROUND POWER UNIT AND PRE-CONDITIONED AIR UNIT AT INDIRA GANDHI INTERNATIONAL AIRPORT, NEW DELHI. IT WAS FURTHER SEEN THAT IN THE ORIGINAL RETURN OF INCOME, THE ASS ESSEE HAD CLAIMED DEPRECIATION ON GROUND POWER UNIT (GPU) AND PRE CONDITIONED AIR UNIT (PCA) AT NORMAL RATE OF DEPREC IATION I.E. 15% FOR PLANT AND MACHINERY. HOWEVER, IN THE REVISED RE TURN OF INCOME, THE ASSESSEE HAD CLAIMED 100% DEPRECIATION ON THESE IT A NO. 2989/DEL/2015 DELHI AVIAT ION SERVICES PVT. LTD. VS PR. CIT 3 TWO ITEMS. IN THE ORIGINAL RETURN, THE DEPRECIATION CLAIMED WAS RS. 7,30,02,697/- WHEREAS IN THE REVISED RETURN IT WAS IN THE RS. 486,498,393/-. IT WAS FURTHER SEEN THAT DURING THE YEAR THE ASSESSEE HAS DEBITED FINANCE EXPENSE OF RS. 43,046, 771/- TO ITS PROFIT AND LOSS ACCOUNT. IT WAS THE OBSERVATION OF THE LD. PR. CIT THAT ALTHOUGH THE ASSESSEE COMPANY WAS INCORPORATED IN 2007, IT HAS NOT COMMENCED ITS BUSINESS UNTIL IT HAD ENTERED INTO CONCESSION AGREEMENT ON 30.7.2010 WITH DELHI INTERN ATIONAL AIRPORT PVT. LTD. THE LD. PR. CIT WAS OF THE OPINIO N THAT, THEREFORE, PART OF FINANCE COST ATTRIBUTABLE TO THE PERIOD WHEN THE ASSESSEE HAD NOT COMMENCED BUSINESS WAS REQUIRED TO BE DISALLOWED. THE LD. PR. CIT NOTED THAT THE AO HAD A CCEPTED THE ASSESEES CLAIM FOR DEPRECIATION WITHOUT PROPERLY E XAMINING THE ISSUE AND HAD SIMILARLY NOT MADE A PROPORTIONATE DI SALLOWANCE OF THE FINANCE EXPENSES ON ACCOUNT OF CAPITALISATION O F A PART OF EXPENSES FOR THE PERIOD PRIOR TO THE COMMENCEMENT O F THE BUSINESS. A SHOW CAUSE NOTICE U/S 263 OF THE ACT WA S ISSUED ON THESE TWO ISSUES. 2.2 IT WAS THE ASSESSEES RESPONSE TO THE SHOW CAUSE NOTICE THAT AS FAR AS THE ISSUE OF DEPRECIATION WAS CONCERNED, DGCA CIRCULAR NO. 23-11/2011 AED DATED 26 TH MAY, 2011 HAD IT A NO. 2989/DEL/2015 DELHI AVIAT ION SERVICES PVT. LTD. VS PR. CIT 4 SPECIFIED THAT AIRLINES SHOULD MAKE USE OF AEROBRID GE MOUNTED FIXED ELECTRICAL GROUND POWER FOR PARKED AIRCRAFTS TO ADDRESS THE PROBLEM OF ENVIRONMENT POLLUTION ENVIRONMENT AND TH AT BOTH THE GPU AND PCA INDIRECTLY REDUCED THE PROBLEM OF NOISE AND EMISSION AT IGI AIRPORT. IT WAS FURTHER SUBMITTED B Y THE ASSESSEE THAT AS PER SECTION 32 READ WITH RULE 5 OF THE INCO ME TAX RULES, 1962, 100% DEPRECIATION WAS ALLOWABLE FOR AIR POLLU TION CONTROL EQUIPMENT AND WATER POLLUTION CONTROL EQUIPMENT AND , THEREFORE, CLAIM FOR 100% DEPRECIATION HAD BEEN MADE. SIMILARL Y WITH RESPECT TO THE CLAIM OF FINANCE EXPENSES THE ASSESS ES SUBMISSION WAS THE CLAIM OF INTEREST INCLUDED BANK CHARGES. 2.3 AFTER CONSIDERING THE SUBMISSIONS OF TH E ASSESSEE, THE LD. PR. CIT CAME TO THE CONCLUSION THAT THE GPU AND PCA UNITS COULD NOT BE EQUATED WITH EQUIPMENT ELIGIBLE FOR 100% DEPRECIATION AS THEY WERE NOT FUNCTIONALLY IDENTICA L. THE LD. PR. CIT NOTED THAT THE ASSESSEE HAD NOT BROUGHT ANY EVI DENCE ON RECORD TO ESTABLISH THAT GPU AND PCA CAUSED LESSER POLLUTION. THE LD. PR. CIT CONCLUDED THAT THERE WAS EXCESS ALL OWANCE OF DEPRECIATION BY THE AO THEREBY MAKING THE ORDER ERR ONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. SIMILARLY, WITH RESPECT TO THE FINANCE EXPENSES, THE LD. PR. CIT OBSERVED THA T FROM THE IT A NO. 2989/DEL/2015 DELHI AVIAT ION SERVICES PVT. LTD. VS PR. CIT 5 DOCUMENTS AVAILABLE ON RECORD IT COULD NOT BE ASCER TAINED WHETHER THE ENTIRE CLAIM OF INTEREST PERTAINED TO P OST COMMENCEMENT PERIOD OR NOT. THE LD. PR. CIT OBSERVE D THAT AS THE AO HAS FAILED TO EXAMINE THE MATTER, THE ORDER WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE ASSESSMENT ORDER DATED 11.12.2013 WAS SET ASIDE AND THE AO WAS DIRECTED TO REFRAME THE ASSESSMENT ORDER IN ACCORDANCE WITH THE DIRECTIONS GIVEN IN THE IMPUGNED ORDER AFTER MAKING THE REQUIR ED VERIFICATION. 2.4 THE ASSESSEE IS NOW IN APPEAL AGAINST THIS ORD ER PASSED U/S 263 OF THE ACT. 3.0 THE LD. AR SUBMITTED THAT THE AO HAD MADE DUE INQUIRY DURING THE COURSE OF ASSESSMENT PROCEEDINGS WITH RESPECT TO THE CLAIM OF DEPRECIATION. HE DREW OUR ATTENTION TO THE SUBMISSIONS OF THE ASSESSEE DATED 26 TH SEPTEMBER, 2013 WHICH WERE GIVEN IN RESPONSE TO QUERY NO. 1 OF THE QUESTI ONNAIRE ALONG WITH THE NOTICE ISSUED U/S 142 (1) OF THE ACT. IT W AS SUBMITTED THAT SIMILARLY, IN QUERY NO. 8 OF THE QUESTIONNAIRE , THE AO HAD ASKED THE DETAILS OF ADDITIONS MADE TO AND SALE OF FIXED ASSETS ALONG WITH COPIES OF BILLS/EVIDENCES OF TRANSACTION S ABOVE RS. 1 IT A NO. 2989/DEL/2015 DELHI AVIAT ION SERVICES PVT. LTD. VS PR. CIT 6 LAC AND THE EXACT DATE OF THE ASSETS BEING PUT TO U SE FOR BUSINESS PURPOSE WAS ALSO ASKED. IT WAS SUBMITTED THAT THESE QUERIES WERE DULY RESPONDED TO BY THE ASSESSEE AND FURTHER A CER TIFICATE ISSUED BY M/S. M. CHOUDHARY & ASSOCIATES, CHARTERED ENGINE ERS CERTIFYING THAT THE GPU AND PCA UNITS WERE POLLUTIO N CONTROLLING EQUIPMENT ALSO WAS SUBMITTED. IT WAS ALSO SUBMITTED THAT THE AO HAD SPECIFICALLY ASKED FOR THE REASONS FOR REVISING THE RETURN OF INCOME AND THE ASSESSEE, VIDE SUBMISSION DATED 10 TH DECEMBER 2013, HAD CATEGORICALLY STATED THAT THE RETURN HAD BEEN REVISED IN ORDER TO CLAIM 100% DEPRECIATION ON GPU AND PCA. IT WAS SUBMITTED THAT IT WAS ONLY AFTER THE AO HAD MADE DE TAILED INQUIRIES AND HAD DULY VERIFIED THE SUBMISSIONS AND DETAILS SUBMITTED BY THE ASSESSEE, THAT THE ASSESSEES ENHA NCED CLAIM OF DEPRECIATION WAS ALLOWED. IT WAS SUBMITTED THAT, TH EREFORE, THE LD. PR. CIT HAD INCORRECTLY INVOKED JURISDICTION U/ S 263 OF THE ACT. IT WAS SUBMITTED THAT IT WAS INCORRECT OBSERVA TION OF THE LD. PR. CIT THAT THE AO HAD ALLOWED DEPRECIATION WITHOU T EXAMINING THE FACTS BECAUSE THE SAME HAD BEEN ALLOWED AFTER D UE EXAMINATION OF THE DOCUMENTS. IT WAS FURTHER SUBMIT TED THAT THE AO HAD TAKEN ONE OF THE TWO PLAUSIBLE VIEWS THAT TH E GPU AND PCA UNITS FELL UNDER THE CATEGORY OF POLLUTION CONT ROL EQUIPMENT IT A NO. 2989/DEL/2015 DELHI AVIAT ION SERVICES PVT. LTD. VS PR. CIT 7 AND THE REVISIONARY POWER U/S 263 COULD NOT HAVE BE EN INVOKED MERELY FOR THE REASON THAT THE LD. PR. CIT HAD A DI FFERENT OPINION IN THE MATTER.. IT WAS SUBMITTED THAT IT WAS ONLY A FTER THE AO HAD MADE DETAILED INQUIRIES AND HAD DULY VERIFIED THE S UBMISSIONS AND DETAILS SUBMITTED BY THE ASSESSEE, THAT HE ALLO WED THE ASSESSEES ENHANCED CLAIM OF DEPRECIATION. IT WAS S UBMITTED THAT, THEREFORE, LD. PR. CIT HAD INCORRECTLY ASSUMED JURI SDICTION U/S 263 OF THE ACT. IT WAS SUBMITTED THAT IT WAS INCORR ECT OBSERVATION OF THE LD. PR. CIT THAT THE AO HAD ALLOWED DEPRECIA TION WITHOUT EXAMINING OF THE FACTS BECAUSE THE SAME HAD BEEN AL LOWED AFTER DUE EXAMINATION OF THE DOCUMENTS. 3.1 IT WAS FURTHER SUBMITTED THAT PROVIDIN G FOR 100% DEPRECIATION WAS A BENEFICIAL PROVISION FOR PROVIDI NG INCENTIVE TO THE ASSESSEE FOR INSTALLING AIR POLLUTION CONTROL E QUIPMENT AND, THEREFORE, THE SAME SHOULD HAVE BEEN INTERPRETED LI BERALLY. IT WAS ALSO SUBMITTED THAT THE TAX AUDIT REPORT FILED BY T HE ASSESSEE HAD NOT BEEN NEGATED BY THE LD. PR. CIT AND, THEREFORE, THE JURISDICTION U/S 263 COULD NOT BE INVOKED. THE LD. AR ALSO ARGUED THAT THE ORDER COULD NOT BE ERRONEOUS AND PR EJUDICIAL TO THE INTEREST OF THE REVENUE ONLY FOR THE REASON THA T NO DETAILED DISCUSSION HAD BEEN MADE IN THE ASSESSMENT ORDER WH EREAS IT A NO. 2989/DEL/2015 DELHI AVIAT ION SERVICES PVT. LTD. VS PR. CIT 8 DETAILED INQUIRIES HAD BEEN MADE BY THE AO. IT WAS FURTHER SUBMITTED THAT IT WAS AT THE MOST A CASE OF INADEQU ATE INQUIRY AND NOT A CASE OF NO INQUIRY AND, THEREFORE, EXPL ANATION 2 TO SECTION 263 COULD NOT HAVE BEEN INVOKED. 3.2 WITH RESPECT TO THE ISSUE RELATING TO THE INTEREST EXPENSE, IT WAS SUBMITTED THAT DURING THE YEAR ASSE SSEE HAD PAID FINANCE CHARGES TO DIAL AND IDBI AND BASED ON THE PERIOD FOR WHICH THE LOAN HAS BEEN TAKEN, THE ASSESSEE HAD SUO MOTO CAPITALISED THE INTEREST PERTAINING TO THE PERIOD P RIOR TO THE COMMENCEMENT OF BUSINESS. IT WAS ALSO SUBMITTED THA T IN THIS REGARD DETAILED INQUIRES HAD BEEN MADE BY THE AO DU RING THE COURSE OF THE ASSESSMENT PROCEEDINGS AND OUR ATTENT ION WAS DRAWN TO SUBMISSIONS OF THE ASSESSEE BEFORE THE AO VIDE DATED 26 TH SEPTEMBER, 2013 WHEREIN THE DETAILS OF FINANCE EXP ENSES HAD BEEN GIVEN. IT WAS SUBMITTED THAT IT WAS FACTUALLY INCORRECT ON THE PART OF THE LD. PR. CIT TO HAVE HELD THAT THE PRIOR PERIOD INTEREST HAD NOT BEEN CAPITALISED. IN LIGHT OF THE ABOVE SUB MISSIONS IT WAS PRAYED THAT THE ORDER PASSED U/S 263 OF THE ACT BE QUASHED. 4.0 IN RESPONSE, THE LD. CIT (DR) SUBMITTED THAT I N VIEW OF THE NEWLY INSERTED EXPLANATION 2 TO SECTION 263 W.E .F. 1.6.2015, IT A NO. 2989/DEL/2015 DELHI AVIAT ION SERVICES PVT. LTD. VS PR. CIT 9 AN ASSESSMENT ORDER WOULD BE SUBJECT TO REVISION IF IT IS PASSED WITHOUT MAKING INQUIRY OR VERIFICATION WHICH SHOULD HAVE BEEN MADE IF THE ORDER IS PASSED ALLOWING ANY RELIEF WIT HOUT INQUIRY INTO ANY CLAIM ETC AND, THEREFORE, IN THE PRESENT C ASE, SINCE THE AO HAD NOT VERIFIED AND EXAMINED THE CLAIM OF DEPRE CIATION AND INTEREST, THE ORDER WAS ERRONEOUS IN MUCH AS WAS PR EJUDICIAL TO THE INTEREST OF THE REVENUE. THE LD. CIT (DR) ALSO POINTED OUT THAT QUERY NO. 8 TO WHICH LD. AR HAS REFERRED TO DOES NO T SPECIFICALLY RAISED THE QUERY ABOUT THE DEPRECIATION CLAIM @ 100 % BUT IT WAS A GENERAL QUERY. IT WAS FURTHER SUBMITTED THAT THE ASSETS UNDER QUESTION DO NOT FALL UNDER THE CATEGORY OF AIR POLL UTION EQUIPMENT AND, THEREFORE, THE ASSESSMENT ORDER WAS PREJUDICIA L TO THE INTEREST OF THE REVENUE. IT WAS FURTHER SUBMITTED T HAT ONLY THE RETURN OF INCOME HAD BEEN REVISED BUT THE TAX AUDIT REPORT HAD NOT BEEN REVISED AS WAS EVIDENT FROM THE RECORD. 4.1 WITH RESPECT TO THE ISSUE OF INTEREST, IT WAS SUBMITTED THAT THERE WAS NO SPECIFIC QUERY ON THIS ISSUE ALSO BY THE AO AND, THEREFORE, EXPLANATION 2 COULD HAVE BEEN INVOKED. T HE LD. CIT (DR) ALSO SUBMITTED THAT IN ALL CASES WHERE THE AO HAD ALLOWED THE CLAIM OF THE ASSESSEE WITHOUT ANY EXAMINATION A ND APPLICATION OF MIND, THE ORDERS COULD BE REVISED U/ S 263 OF THE IT A NO. 2989/DEL/2015 DELHI AVIAT ION SERVICES PVT. LTD. VS PR. CIT 10 ACT. IT WAS SUBMITTED THAT THE ORDER U/S 263 DESERV ED TO BE UPHELD. 5.0 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALSO PERUSED THE MATERIAL ON RECORD. THERE ARE TWO ISSUE S ON WHICH THE LD. PR. CIT HAS HELD THAT THE ORDER OF THE AO W AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE FIRST ISSUE IS THE ASSESEES CLAIM OF DEPRECIATION. IN THE ORIGINA L COMPUTATION OF INCOME AND THE TAX AUDIT REPORT, DEPRECIATION HAD B EEN CLAIMED ON GROUND POWER UNIT AND PRE CONDITIONED AIR UNIT @ 15% WHILE IN THE REVISED RETURN THE ASSESSEE CLAIMED DEPRECIA TION @ 100% BY HOLDING THAT THE SAME FELL UNDER THE CATEGORY OF AIR POLLUTION CONTROL EQUIPMENT WHICH WAS ELIGIBLE FOR 100% DEPRE CIATION. THE AO ALLOWED THE CLAIM OF THE ASSESSEE. THE LD. PR. C IT WAS OF THE VIEW THAT THE ASSESSEES CLAIM OF DEPRECIATION AT E NHANCED RATE HAS BEEN ALLOWED BY THE AO WITHOUT MAKING DUE INQUI RIES IN THIS REGARD. IT IS THE ASSESSEES CONTENTION THAT THE AO HAD RAISED QUERY IN THIS REGARD AND THE ASSESSEE HAD FILED SUB MISSIONS IN RESPONSE THERETO AND THE AO HAD ALLOWED THE CLAIM A FTER DULY CONSIDERING THE ASSESSEES SUBMISSIONS. WE HAVE GON E THROUGH THE QUESTIONNAIRE ISSUED BY THE AO AND THE RESPONSE S SUBMITTED BY THE ASSESSEE. HOWEVER, WE NOTE THAT THERE IS NO SPECIFIC QUERY IT A NO. 2989/DEL/2015 DELHI AVIAT ION SERVICES PVT. LTD. VS PR. CIT 11 RAISED BY THE AO WITH RESPECT TO THE ASSESSEES CLA IM OF DEPRECIATION @ 100%. THE AO HAS SIMPLY ASKED FOR DE TAILS PERTAINING TO FIXED ASSETS. NO SPECIFIC QUERY HAS B EEN RAISED BY THE AO AS TO WHY THE GROUND POWER UNIT AND THE PREC ONDITIONED AIR UNIT FELL IN THE CATEGORY OF AIR POLLUTION CONT ROL EQUIPMENT ELIGIBLE FOR DEPRECIATION @ 100%. THE ASSESSEE HAS ALSO RELIED ON A CERTIFICATE OF FROM CHARTERED ENGINEERS WHEREIN I T HAS BEEN STATED THAT THESE TWO EQUIPMENTS FALL UNDER THE CAT EGORY OF AIR POLLUTION CONTROL EQUIPMENT. THIS CERTIFICATE IS PL ACED AT PAGE 63 OF THE ASSESSEES PAPER BOOK. HOWEVER, WHY AND HOW THIS CERTIFICATE WAS FILED BEFORE THE AO IS NOT CLEAR BE CAUSE NO SPECIFIC QUERY HAS EMANATED FROM THE AO IN THIS REGARD. WE A LSO NOTE THAT SECTION 32 PROVIDES FOR DEPRECIATION AT THE EN HANCED RATE OF 100% ON AIR POLLUTION CONTROL EQUIPMENT. HOWEVER AT SERIAL NO. 3 (VIII) OF PART A (III) OF NEW APPENDIX I OF RULE 5 OF THE INCOME TAX RULES, 1962 AIR POLLUTION CONTROL EQUIPMENTS HAVE B EEN DEFINED AS BEING (A) ELECTROSTATIC PRECIPITATION SYSTEMS (B) FELT-FILTER SYSTEMS (C) DUST COLLECTOR SYSTEMS IT A NO. 2989/DEL/2015 DELHI AVIAT ION SERVICES PVT. LTD. VS PR. CIT 12 (D) SCRUBBER-COUNTER CURRENT / VENTURE / PACKED BED / CYCLONIC SCRUBBERS (E) ASH HANDLING SYSTEM AND EVACUATION SYSTEM 5.1 IT IS SEEN THAT GPU AND PCA DO NOT FALL UNDER ANY OF THE ABOVE 5 CATEGORIES. WE ALSO NOTE THAT ALTHOUGH THE ASSESSEE HAS FILED REVISED RETURN OF INCOME, THE ASSESSEE HA S NOT FILED ANY REVISED TAX AUDIT REPORT WHEREIN THE DEPRECIATION A T ENHANCED RATE WAS STATED TO BE ELIGIBLE. THUS, APPARENTLY IN OUR CONSIDERED OPINION, IT IS A CASE OF CLEAR NON-APPLICATION OF M IND BY THE AO. WE ALSO DO NOT AGREE WITH THE CONTENTION OF THE LD. AUTHORISED REPRESENTATIVE THAT THE AO TOOK ONE OUT OF THE TWO PLAUSIBLE VIEWS BECAUSE IF THE GPU AND PCA EQUIPMENT DO NOT F ALL UNDER THE CATEGORY OF AIR POLLUTION CONTROL EQUIPMENT AT ALL, THE ONLY VIEW POSSIBLE IS THAT DEPRECIATION IS TO BE ALLOWED @ 15% ONLY. THE ASSESSEE HAS ALSO CONTENDED THAT THIS BEING A B ENEFICIAL PROVISION SHOULD BE CONSTRUED LIBERALLY BUT FOR THA T PURPOSE THE ASSESSEE SHOULD FIRST FULFIL THE ELIGIBILITY CONDIT ION AT THE THRESHOLD AS EVEN A BENEFICIAL PROVISION CANNOT BE APPLIED WITHOUT DUE AND PROPER EXAMINATION OF THE FACTS. T HEREFORE, IT IS VERY MUCH APPARENT THAT IN THE PRESENT CASE THE AO HAS ALLOWED IT A NO. 2989/DEL/2015 DELHI AVIAT ION SERVICES PVT. LTD. VS PR. CIT 13 DEPRECIATION AT THE ENHANCED RATE WITHOUT EXAMINING THE ELIGIBILITY OF THE SAME. THE HONBLE DELHI HIGH COU RT IN THE CASE OF BSES RAJDHANI POWER LTD. VS. PCIT REPORTED IN (2 017) 399 ITR 228 (DELHI) HAD HELD THAT THE NON CONSIDERATION OF LARGER CLAIM OF DEPRECIATION AND CONSIDERATION OF ONLY PART OF IT B Y THE AO WHO DID NOT GO INTO THE ISSUE WITH RESPECT TO THE WHOLE AMOUNT WAS AN ERROR THAT COULD BE CORRECTED U/S 263 OF THE ACT . IN THIS CASE IT IS OUR CONSIDERED VIEW THAT THE AO HAS NOT EXAMINED THE COMPLETE ASPECT OF THE CASE AND HAS ALLOWED THE ASS ESSEES CLAIM WITHOUT ANY INQUIRY. THE ACTION OF THE LD. PR. CIT IS BOUND TO BE UPHELD. THE HONBLE APEX COURT IN THE CASE OF DENEA L MERCHANTS PVT. LTD. VS. ITO AND ANOTHER IN SLP NO. 2396/2017 HAS CATEGORICALLY HELD THAT WHERE THE COMMISSIONER OF I NCOME TAX HAD PASSED AN ORDER U/S 263 OF THE ACT WITH OBSERVA TION THAT THE AO DID NOT MAKE ANY PROPER INQUIRY WHILE MAKING THE ASSESSMENT AND HAD ACCEPTED THE EXPLANATION OF THE ASSESSEE, SUCH ORDER WAS TO BE UPHELD. THUS, WE UPHOLD THE VA LIDITY OF SECTION 263 PROCEEDINGS ON THE ISSUE OF ENHANCED DE PRECIATION CLAIMED BY THE ASSESSEE AT 100% ON ALLEGED AIR POLL UTION CONTROL EQUIPMENT. IT A NO. 2989/DEL/2015 DELHI AVIAT ION SERVICES PVT. LTD. VS PR. CIT 14 5.2 AS FAR AS THE SECOND ISSUE REGARDING ASS ESSEES CLAIM OF INTEREST IS CONCERNED, IT IS THE ASSESSEE S CONTENTION THAT THE ASSESSEE HAS DULY BIFURCATED THE INTEREST EXPEN SE BETWEEN PRE AND POST BUSINESS COMMENCEMENT PERIOD AND HAS M ADE DISALLOWANCE ACCORDINGLY. AGAIN, NO SPECIFIC QUERY HAS BEEN RAISED BY THE AO IN THIS REGARD AND THE AO HAS SIMP LY RELIED ON THE DETAILS PROVIDED IN THE AUDITED FINANCIAL STATE MENTS. ALTHOUGH THE ASSESSEE SUBMITS THAT THE AO HAS RAISED A SPECI FIC QUERY AT SERIAL NO. 23 OF THE QUESTIONNAIRE DATED 9.9.2013 W ITH REGARD TO INTEREST EXPENSES, WE FIND THAT SUCH ASSERTION IS I NCORRECT IN AS MUCH AS THE SAID QUESTION REQUIRES THE ASSESSEE TO FILE COMPLETE DETAILS OF EXPENSES EXCEEDING RS. 10 LACS AND RS. 1 LACS FOR SIMILAR TRANSACTIONS ALONG WITH REASONS FOR INCREAS E OVER THE LAST YEAR. IN QUERY NO. 24, THE ASSESSEE WAS ASKED FOR A COMPLETE CHART OF LOANS AND ADVANCES GIVEN SHOWING OPENING B ALANCE ALONG WITH DETAILS OF INTEREST, TDS EXPENSES AND CLOSING BALANCES. THUS, THIS QUESTION ALSO DOES NOT SPECIFICALLY ASKE D FOR BREAK-UP OF INTEREST INTO POST AND PRE BUSINESS COMMENCEMENT PERIOD. SIMILARLY, IT HAS BEEN SUBMITTED THAT THE ASSESSEE HAD SUBMITTED THE CONFIRMATION OF LOANS AS WELL AS DETAILS OF INT EREST EXPENSES WHICH ARE PLACED ON PAGE 69 OF THE PAPER BOOK. A PE RUSAL OF THE IT A NO. 2989/DEL/2015 DELHI AVIAT ION SERVICES PVT. LTD. VS PR. CIT 15 SAME SHOWS THAT THE REPLY CONTAINS THE TOTAL INTERE ST PAID TO IDBI. HOWEVER THE BREAK UP BETWEEN PRE AND POST BUS INESS COMMENCEMENT HAS AGAIN NOT BEEN DISCLOSED. THEREFOR E, IN THIS REGARD ALSO WE AGREE WITH THE CONTENTION OF THE LD. PR. CIT THAT THE AO DID NOT EXAMINE THE ISSUE IN THE MANNER IN W HICH IT WAS EXPECTED FROM HIM IN THIS REGARD AND, THEREFORE, TH E IMPUGNED ACTION U/S 263 OF THE ACT IS ENTIRELY JUSTIFIED. 5.3 ACCORDINGLY, IT IS OUR CONSIDERED OPINION THAT THE LD. PR. CIT WAS PERFECTLY JUSTIFIED IN INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT IN THE ASSESSEES CASE AND W E UPHOLD HIS ACTION ACCORDINGLY. 6.0 IN THE FINAL RESULT THE APPEAL OF THE A SSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH DECEMBER, 2019. SD/- SD/- (N.K.BILLAIYA) (SUDHANSHU SRIVASTAV A) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30/12/2019 VEENA COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT IT A NO. 2989/DEL/2015 DELHI AVIAT ION SERVICES PVT. LTD. VS PR. CIT 16 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI