Not a fit case for invoking revisionary powers if the AO takes a particular view during assessment and also after due consideration of the Apex Court decisions

– Assessee’s appeal allowed : PUNE ITAT

Whether it is a fit case for invoking revisionary powers if the AO takes a particular view during assessment and also after due consideration of the Apex Court decisions – NO: ITAT

++ it is a settled legal proposition that the subsidy, received by the assessee under the PSI Scheme, 2007 from Maharashtra Government, is capital in nature. The Assessing Officer is categorical in accepting the same. However, the Assessing Officer altered the claim of depreciation u/s 32 of the Act qua the changes made in the actual cost qua the subsidy. The Assessing Officer is of the opinion that the assessee falls within the purview of the provisions of Explanation 10 to section 43(1) of the Act. The Assessing Officer took this view after due deliberations and also after relying on the Apex Court judgment. This view of reducing the subsidy from the cost of assets for disallowing depreciation was accepted by the Revenue for the assessment year 2014-2015 in the assessee’s own case. To that extent, considering the consistency, no mistake was found in the order of the Assessing Officer for the assessment year under consideration. Similar claim was allowed by the Revenue in the assessment year 2012-2013 also, in which case, the examination of the issue for establishment of true nature of subsidy shall only breed the multiplication of the proceedings. The same issue need not be examined every year, wherever subsidy is received by the assessee. Further, there is an amendment to the provisions of section 2(24) clause (xviii) of the Act by the Finance Act, 2015. The subsidy is an income after the amendment. The clause was further amended in 2017. After the amendment, the subsidy segment, which is capitalized to the actual cost is not the income and the assessee is allowed to claim the depreciation u/s 32 of the Act. These amendments do not apply to the assessment year 2013- 14 under consideration as the amendments apply prospectively only. Infact, the Assessing Officer examined all these issues before treating the subsidy as capital receipt. From this point of view merely based on the ground of verification of the issue by the Assessing Officer, invoking of the provisions of Section 263 of the Act is uncalled for and unsustainable under law. It was decided to uphold the view taken by the Assessing Officer in regular assessment order.

ITA No.777/Pun/2018