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| The Tax Publishers2020 TaxPub(DT) 4253 (Jp-Trib) INCOME TAX ACT, 1961
Section 263
There was nothing on record to suggest that AO raised any query to assessee firm regarding actual usage of concerned property for business purposes especially given description and site plan of property and eligibility of assessee to claim depreciation thereon. Accordingly, assessment order was rightly treated as erroneous and prejudicial.
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Revision under section 263 - Erroneous and prejudicial order - Lack of enquiry by AO regarding claim of depreciation on the residential property -
CIT held assessment order as erroneous and prejudicial to the interest of revenue on the ground of AO not having examined claim of assessee-firm regarding claim of depreciation on the residential property. Assessee contended that property was used by the firm business purposes.Held: There was nothing on record to suggest that AO raised any query to assessee regarding actual usage of concerned property for business purposes especially given description and site plan of property and eligibility of assessee to claim depreciation thereon. CIT examined the contens of Registry and noticed that description of property in terms of site plan and internal construction showed that it was a residential property and not a commercial property and the photographs so submitted by assessee during revisionary proceedings didn't support the claim of assessee that property had been used for business purposes. If AO would have carried out even preliminary verification and examined contents of the registry, the AO would have noted the similar description of the property which was clearly discernable from reading of contents of the Registry and would have raised similar questions regarding conversion and more importantly, usage of such property for business purposes in order to examine the assessee's eligibility to claim depreciation. It was a case of complete lack of enquiry on part of AO to examine description of property and also whether same was used for business purposes in order to examine eligibility of assessee to claim depreciation and, therefore, assessment order was rightly treated as erroneous and prejudicial.
Supported by:Subhlakshmi Vamijya (P) Ltd. v. DCIT-I, Kolkata, (2015) 60 Taxmann.com 60 (Kol-Trib.) : 2015 TaxPub(DT) 2950 (Kol-Trib).
REFERRED :
FAVOUR : Against the assessee.
A.Y. : 2015-16
INCOME TAX ACT, 1961
Section 263
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