Upon amalgamation, unabsorbed depreciation not 'actually allowed' is not reduced from asset value; moreover, income tax deductions are permissible against gross total income and are not restricted solely to business income. Revisional authorities must adjudicate issues on merits when sufficient evidence is available rather than remanding.

आदेश/ORDER

Per Madhusudan Sawdia, A.M.:

These two appeals are filed by VITP Private Limited (“the assessee”), feeling aggrieved by the order passed by the Learned Principal Commissioner of Income Tax-2, Hyderabad, (“Ld.PCIT”), dated 30/03/2024 for the A.Y.2017-18. As both the appeals are interrelated and belongs to the same, both are heard together and one consolidated order is being passed for the sake of brevity.

ITA No. 573/Hyd/2024

2. The assessee has raised the following grounds of appeal:

1. The learned PCIT has erred in passing the revision order under Section 263 of the Act which is bad in law as well as on facts and hence liable to be quashed.

2. The learned PCIT has erred in law and on facts in concluding that the order of the Assessing Officer (“AO”) is ‘erroneous and prejudicial to the interest of revenue’ and accordingly has erred in directing the AO to redo the assessment afresh for the subject AY.

Scope of revision proceedings

3. The learned PCIT has erred in law and on facts in initiating proceedings under Section 263 of the Act with respect to the assessment order dated June 28, 2021 passed under Section 143(3) read with Section 144C(3) read with Section 144B of the Act.

4. The learned PCIT is not justified in invoking revisionary proceedings under Section 263 of the Act when the essential conditions for invoking the aforesaid section did not exist.

5. The learned PCIT has erred in law and on facts in considering the matter w.r.t claim of deduction under section 80IA of the Act in the revised Return of Income (“ROI”), as being erroneous without establishing the same.

6. The learned PCIT has erred in law and on facts in considering the matter w.r.t claim of excess depreciation in the revised ROI, as being erroneous without establishing the same.

7. The learned PCIT has erred in stating that the impugned assessment order passed for AY 2017-18 is erroneous in so far as it is prejudicial to the interest of Revenue, without appreciating the facts put forth and submission filed by the Company and circumstance of the current case.

8. The learned PCIT has erred in law and on facts in holding that the AO had not examined the matter and has not applied his mind during regular assessment proceedings although details w.r.t claim of deduction under Section 80-IA and tax depreciation have been appropriately disclosed in the tax audit report and submissions made during scrutiny assessment proceedings.

9. Without prejudice to the above grounds, we wish to submit the following with respect to contention of the learned PCIT regarding the claim of excess depreciation and deduction under section 80IA of the Act:

9.1 The learned PCIT has erred in facts in holding that there has been an excess claim of Written Down Value (“WDV”) of assets to the extent of INR 56,78,75,869 in the revised ROI filed by VITP for the subject AY without taking into cognizance of the reconciliation statement furnished by the Company during the course of revision proceedings.

9.2 The learned PCIT has erred in law and on facts by holding that there is an excess claim of depreciation to the extent of INR 3,37,71,787 in the revised ROI consequent to the alleged excess claim of WDV without considering the submissions furnished during the course of revision proceedings.

9.3 The learned PCIT has erred in law and on facts by holding that there is a balance excess claim of WDV to the extent of INR 53,41,04,082 in the revised ROI consequent to the alleged ex