Ansal Crown Infrabuild Pvt Ltd, New Delhi V. ACIT Circle- 2(2), New Delhi

ITA 3303/DEL/2019

AI Insights

The case involves Ansal Crown Infrabuild Pvt. Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals)-XXXII, New Delhi. The appeal arose from an assessment order passed by the Assessing Officer under Section 143(3) of the Income Tax Act, 1961, for the Assessment Year 2014-15. The primary issue was the addition of Rs. 15,32,063 to the assessee's income, which represented the difference in depreciation claimed in the Profit and Loss account and that allowed under the Companies Act. The CIT(A) upheld the Assessing Officer's decision, leading to the present appeal before the Tribunal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 121462 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 13-03-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 15-04-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 43; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “A” DELHI BEFORE SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A. No.3303/DEL/2019 Assessment Year 2015-16 Ansal Crown Infrabuild Pvt. Ltd., 118, UFF Prakash Deep Building 7 Tolstoy Marg, Connaught Place, New Delhi. vs. Asst. Commissioner of Income Tax Circle-2(2), New Delhi. TAN/PAN: AACCC8058M (Appellant) (Respondent) Appellant by: Shri Akash Deepak, CA Respondent by: Shri Kanv Bali, Sr.DR Date of hearing: 14 03 2023 Date of pronouncement: 17 03 2023 O R D E R PER PRADIP KUMAR KEDIA, A.M.: The captioned appeal has been filed by the assessee against the order of the Commissioner of Income Tax (Appeals)-XXXII, New Delhi [‘CI T(A) ’ in s hor t] dated 28. 02. 2019 ari si ng f ro m the assess ment or der dat ed 29. 12. 2017 passed b y t he Assessi ng Of fi cer under S ec ti on 1 43( 3) of t he I nco me Tax A ct , 1961 (the Act ) concer ning A Y 20 14- 15. 2. As per t he gr ounds of appeal , the a ssessee has chall enged the addi t ion of Rs. 15, 32, 063/ - to t he t otal i ncome of the assessee on account of dif fer ence i n depreci ati on cl ai me d. 3. Br iefl y st at ed, t he assessee i s engaged i n t he busi ness of I.T.A. No.3303/DEL/2019 2 dev el opin g reside nt ial, co mmercial pr ope rt ies et c. In t he cour se of the scrut i n y assess ment f or Assess ment Year 2014- 15 i n quest i on, t he Assessi ng Of ficer obse rve d t hat w hi le det er mi ni ng the taxa ble inc o me, t he assessee has adde d back an a mount of Rs.8,74,3 82/- det er mi ned un der Co mpanies Act i nst ead of dep reciati on of R s. 24, 06, 445/ - de bi ted t o the Pr of it and Loss account. I n t he pr ocess, t he taxable i nco me has been reduce d t o the ext ent of Rs. 15, 32, 063/ -. 4. Aggri eved, the assessee pr ef err ed appeal bef ore the CIT( A) . The CI T( A) however also did not see an y merit i n the expla nat io n of f er ed b y t he assessee. The r el eva nt oper at iv e par agr aph i s r epr o duced her eunder: “ 6 . 1 A pp e l l a n t c o m p a ny i s e ng a ge d i n t he p r o j e c t o f r e s i d e n t i al f l a t . It h ad f i l e d i t s I T f o r A . Y . 2 0 1 5 - 16 d e c l a r i ng i n c o m e of R s . 5 1 , 8 8 , 8 40 / -. Th e c a s e w a s s e l e c t e d fo r s c r u t i ny u n d e r C A SS . D ur i n g t h e c o u r s e of as s e s s m e n t p r o c e e di n g s , AO o b se r v e d t h at a s s e s s e e c o m p a ny h ad a dd e d b a c k a n am o u nt o f R s . 8 , 74 , 38 2 / - t o w a r d s de p r e c i at i o n as pe r C om pa ni e s A c t w he r e a s as s e s s e e h a d c l a i m e d d e p r e c i a t i o n o f R s . 24 , 0 6 , 4 4 5 / - i n t h e P &L ac c o u nt . A O d i s a l l o w e d t h e d i f fe r e nc e o f R s . 15 , 32 , 0 6 3 / - be t w e en d e p r e c i at i o n c l a i m i n t h e c o m p u t a t i on of i n c o m e a n d d e pr e c i a t i o n c la i m e d in t h e P &L a c c o u nt . A s s e s s e e i s i n ap p e a l a ga i ns t t h e s a m e . 6 . 2 I h a v e c a r e f ul l y c o n s i de r e d t h e o bs e r v at i o ns o f A O a nd s ub m i s s i o n s o f a p p e l l an t . I t i s s e e n t h a t a s s e s s e e c o m p an y h a d a d de d b a c k a n a m o u n t o f R s . 8 , 7 4 , 3 8 2/ - t o w ar d s d e p r ec i a t i o n a s p e r C o m p a n i e s A c t w he r e a s as s e s s e e h a d c l a i m e d de p re c i at i o n of R s . 2 4 , 0 6 , 4 45 / - i n t h e P &L a c c o u nt . A O di s a l l ow e d t he d i f f e r e nc e o f R s . 1 5 , 3 2 , 06 3/ - be t w e e n d e pr e c i a t i on c l ai m i n t he c o m p ut a t i o n of i n c om e a n d d e pr e c i a t i on c l a i m e d in t h e P &L a c c ou nt . A p pe l l a nt h a s s t at e d t h at t he r e w as m i s t ak e on i ts p a r t a n d the r e f o r e , e x c e s s d e pr e c i a t i on w as c l a i m e d . It h a s f u r t h e r be e n s u bm it t e d t h a t t he c o m p a n y s h ou l d ha v e t ak e n o nl y c u r r e n t y e ar de p r e c iat i o n w h i c h w a s R s . 5, 2 9 , 34 7 / - be i n g d i f f e r e nc e b e t w e e n a c c um ul at e d d e pr e c i a t i on am o u nt i n g t o R s . 2 4 , 06 , 4 4 5 . 43 an d d e pr ec i a t i o n c l a i m u p to 3 1 . 03 . 20 1 4 a m o u nt i n g to R s . 18 , 77 , 0 98 / -. H o w e v er , t he c o r r e c t n e s s o f ba l a n c e s he e t w as no t di s t u r b e d a s to t a l e x pe n d it u r e c l a i m e d r e m a i n e d th e s a m e . O n p e r us al o f t h e P &L a cc ou n t a n d I.T.A. No.3303/DEL/2019 3 c o m p ut a t i o n o f in c o m e , t h e c o n t e n t i o n of A O i s fo u nd t o be c o r r e c t . T he r e i s n o ba s i s i n t h e c l ai m of a p pe l l a nt t h a t c l a i m of t o t al e x p e nd i t ur e r e m ai n e d t h e s a m e a s a p p e ll a n t has c l ai m e d e x c e s s d e p r e c i a t io n . A p pe l l a nt ha s de b i t e d an a m o u nt of R s . 2 4 , 0 6 , 4 45 / - i n t h e P &L ac c o un t w h e r e as h e w a s r eq ui r e d t o h a v e de b i t e d t he de p r e c a t i on f o r t he c u r r e n t y e a r on l y . T he r e f o r e , t h e r e i s e x c e s s de b i t by a pp e l l a n t w h i c h A O h as c o rr e c t l y d i s a l l o w e d. T he r e f o r e , I am i n a gr e e m e nt w i t h A O a nd t he d i s a l l o w an c e o f R s . 1 5 , 32 , 0 6 3 / - i s s us t ai n e d. ” 5. Aggri eved, the assessee pr ef err ed appeal bef ore the Tri bunal. 6. We have heard t he ri val sub mi ssi ons on t he i ssue. The cor rect ness of addit ion on account of de preci at io n cl ai me d i n the Pr ofi t and L oss account qua depr eciati on di sal lowed as per Co mpanies Act b y t he assessee i s under q uest ion. It is t he case of t he assessee t hat account s of a r eal estate compa ny ar e i nt er al ia governed b y Gui dance N ote issued b y I nsti tut e of Chart er ed Accountant of India. In t une wi t h Gui dance Note, i nco me has bee n det er mi ned as per separat e cal culati on sheet whi ch calcul at ed t he i nco me a nd e xpendit ure a nd carr ied to pr ofit and loss account eve r y year. The i nco me has bee n det er mi ned as per the G ui danc e Not e and corr ect taxabl e inco me has been of fer ed in t he r et ur n of i nco me. 7. We see no r at ional e i n t he plea of t he assessee f or expla nat io n in c lai m of depreci at ion. The assessee whi l e co mput ing t he ta xable i nco me has t aken ‘prof it bef or e ta x’ as per it s ‘profi t and loss account ’ as a st ar ti ng point a nd re duced the de preci at i on onl y t o t he ext ent of Rs. 5, 29, 347/- ( bei ng cur rent yea r de pr eci at i on) as pe r Co mpanies Act i nstead of accu mulated depreci at i on of R s. 24, 06, 445/ - cl ai med as I.T.A. No.3303/DEL/2019 4 ded uct ion i n the Profi t a nd L oss Account . If t he ver si on of t he assessee f or cl ai m of curr ent ye ar depreciati on is acc ept ed then b y t he sa me t oke n, ‘pr ofi t bef ore ’ tax wi ll st and increased b y the dif fer ent ial t o the sa me e xte nt . Thus, when seen ho li sti call y, the t ax abl e i nc o me has r e mai ned unde rstated t o t he exte nt of addit ion ri ght l y made b y t he As sessi ng Offi cer. No c ogent expla nat io n has been give n f or maki ng de par t ur e from the tangi ble r ec or ds. We t hus see no r eason to int er f ere wi th the fi rst appel l at e ord er and the assess ment or der . 8. I n t he resul t, t he appeal of t he assessee is di smi ssed. Order was pronounced in the open Court on 17.03.2023. Sd/- Sd/- [CHALLA NAGENDRA PRASAD] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 03.2023 Prabhat