Detailed Review of ITAT Decision on Depreciation Claims by Gulati Steel Fab P. Ltd. for AY 2011-12

Introduction

The Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘C’ addressed the appeals filed by Gulati Steel Fab P. Ltd. regarding depreciation claims for the assessment year 2011-12, which were initially disallowed by the assessing officer.

Background

Gulati Steel Fab P. Ltd., based in Faridabad, faced disallowance of depreciation claims on machinery purchased from Neel Kanth Steel, deemed bogus by the Assessing Officer (AO) for the assessment years 2010-11 and 2011-12.

Case Proceedings

The appellant challenged the disallowances made by the AO, pointing to subsequent verifications in Assessment Year 2017-18 where no such disallowances were made despite detailed inquiries into the same transactions.

Arguments and Tribunal’s Observations

The appellant’s counsel argued that consistent treatment in subsequent years, where the AO accepted the depreciation claims on the same machinery, should influence the earlier years’ assessments. The tribunal recognized the merit in the appellant’s arguments, noting that factual consistency across assessment years should be maintained.

Judgment

The tribunal reversed the disallowance of depreciation for AY 2010-11 and 2011-12 based on the findings for AY 2017-18, thus allowing both appeals by Gulati Steel Fab P. Ltd.

Conclusion

This decision underlines the importance of consistent factual findings in tax assessments and the impact of subsequent assessments on earlier years. The tribunal’s approach in this case reflects a principled stand on maintaining consistency and fairness in tax adjudications.

The decision was pronounced openly in court on August 22, 2022, ensuring transparency and accountability in the proceedings.

Detailed Review of ITAT Decision on Depreciation Claims by Gulati Steel Fab P. Ltd. for AY 2011-12