| The Tax Publishers2022 TaxPub(DT) 5747 (Ahd-Trib) INCOME TAX ACT, 1961
Section 115JB Rule 5
Where for purpose of section 115J, assessee claimed depreciation at the rates provided under IT Rules, the action of AO in redrawing profit and loss account and adopting rates of depreciation prescribed under Companies Act, was totally unauthorized.
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Minimum Alternate Tax - Computation of book profit under section 115JB - Depreciation of windmill - Assessee adopted the rate of depreciation as per IT Act, instead of Companies Act, in P&L a/c --Addition made by AO and confirmed by CIT(A) and on account of depreciation
While computing book profit under section 115JB, assessee-company claimed depreciation on windmill at the rate prescribed in the Income Tax Act. According to AO, depreciation as per the Companies Act was required to be claimed by assessee-company while computing book profit under section 115JB, and not depreciation as per the IT Act. He, accordingly added excess depreciation of Rs. 14,40,237 claimed by assessee disallowed and made addition to the book profit of assessee under section 115JB. Held: Depreciation provided under Companies Act was minimum but there was no bar to higher depreciation being claimed by assessee and, thus, for purposes of section 115J, depreciation actually debited to P&L a/c could be allowed. Accordingly, where for purpose of section 115J, assessee claimed depreciation at rates provided under IT Rules, action of AO in redrawing profit and loss account and adopting rates of depreciation prescribed under Companies Act, was totally unauthorized.
Applied:Kansara Popatlal Tribhuvan Metal (P) Ltd. v. Pr. CIT [ITA No. 1057/AHD/2015, dt. 22-7-2022].
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2012-13
IN THE ITAT, AHMEDABAD BENCH
P.M. JAGTAP, V.P. & SIDDHARTHA NAUTIYAL, J.M.
Asstt. CIT v. Kansara Popatlal Tribhovandas Metal (P) Ltd.
ITA No. 412/AHD/2018 & C.O. No. 17/AHD/2019
31 August, 2022
Assessee by: M.J. Shah, Authorized Representative & Rushin Patel, Authorized Representative
Revenue by: Shramdeep Sinha, Senior Departmental Representative
P.M. Jagtap, V.P.
This appeal is preferred by the Revenue against the order of the learned Commissioner (Appeals)-2, Ahmedabad (CIT (A) in short) dated 17-11-2017 and the same is being disposed of along with cross-objection filed by the assessee being C.O. No. 17/AHD/2019.
2. The solitary issue involved in the Revenues appeal relates to the deletion by the learned Commissioner (Appeals) of the addition of Rs. 1,68,42,000 made by the assessing officer on account of disallowance of assessees claim for depreciation on windmill.
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