Higher Depreciation on Goods Carriage Vehicles Cannot Be Disallowed at S. 143(1) Stage: ITAT Deletes CPC Adjustment [Read Order]
The tribunal ruled that the rate of depreciation on goods carriage vehicles used in a transportation business is a debatable issue requiring detailed verification and it cannot be summarily adjusted as a "prima facie" error during the processing of a return.
![Higher Depreciation on Goods Carriage Vehicles Cannot Be Disallowed at S. 143(1) Stage: ITAT Deletes CPC Adjustment [Read Order]](https://images.taxscan.in/h-upload/2025/12/24/2114624-higher-depreciation-goods-carriage-vehicles-disallowed-stage-itat-deletes-cpc-adjustment-taxscan.webp "Higher Depreciation on Goods Carriage Vehicles Cannot Be Disallowed at S. 143(1) Stage: ITAT Deletes CPC Adjustment [Read Order]")
The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) deleted a disallowance of ₹25,04,890 originally made by the Centralized Processing Centre (CPC) and held that the CPC exceeded its limited mechanical scope by restricting depreciation to 15% when the assessee had claimed 30% for commercial trucks used in his transport business. Vikas Goyal (assessee) is engaged...
The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) deleted a disallowance of ₹25,04,890 originally made by the Centralized Processing Centre (CPC) and held that the CPC exceeded its limited mechanical scope by restricting depreciation to 15% when the assessee had claimed 30% for commercial trucks used in his transport business.
Vikas Goyal (assessee) is engaged in two distinct business lines: the sale of hardware and cement, and a "Carriage and Forward" (transportation) business. For the Assessment Year 2021-22, he filed a return claiming 30% depreciation on goods carriage vehicles (trucks and lorries) used for hire, while applying the standard 15% rate to other plant and machinery.
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The CPC, while issuing an intimation under Section 143(1), restricted the total depreciation claim to 15%, treating the higher claim as an incorrect entry. The assessee’s subsequent grievance petition resulted in a rectification order under Section 154 that upheld the CPC's 15% rate.
Aggrieved by the AO’s order, the assessee filed an appeal before the commissioner of Income Tax (appeals) [CIT(A)]. The CIT(A) upheld the disallowance. Aggrieved by the CIT(A)’s order, the assessee filed an appeal before the ITAT.
The bench, comprising Prashant Maharishi (Vice President) and Shri Keshav Dubey (Judicial Member) observed the restricted nature of "prima facie" adjustments
The tribunal observed that adjustments under Section 143(1) were confined to arithmetical errors or claims that are patently incorrect based on the return itself. The tribunal observed that matters requiring deeper examination, enquiry, or appreciation of facts such as the specific use of vehicles for hire cannot be adjusted summarily.
The tribunal observed that since determining the correct depreciation rate for these vehicles requires documentary evidence and verification of the business nature, it must be addressed in scrutiny proceedings rather than through automated processing.
The tribunal observed that the 'prima facie' adjustment was an obvious, self-evident error that can be detected and corrected merely from the return without investigation or debate on facts or law.
The tribunal concluded that the CPC's outright disallowance was unjustifiable and directed the Assessing Officer to delete the addition. The appeal of the assessee was allowed.
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