TMI Blog2011 (10) TMI 608X X X X Extracts X X X X X X X X Extracts X X X X ..... AL, VP AND SHRI BHAVNESH SAINI, JM Appellant by Shri P. M. Mehta, AR Respondent by Shri S. K. Gupta, CIT DR ORDER PER BHAVNESH SAINI: This appeal by the assessee is directed against the order of the learned CIT(A)-V, Ahmedabad dated 26-03-2007 for the assessment year 2003-04, on the following grounds: 1. On the facts and in the circumstances of the case the CIT(A) has erred in dismissing the first ground raised in appeal that disallowance of depreciation was based not on facts but only on conjectures and surmises and was not valid. 2. On the facts and in the circumstances of the case the CIT(A) has erred in confirming the disallowance of depreciation of ₹ 4,83,92,457/- simply following his predecessor s order of Assessment Year 2000- 01 when the same is set aside and restored back to the file of the learned Commissioner of Income-Tax (Appeals) as per Hon ble ITAT s orders dated 24th April, 2006 in ITA No. 385 to 389/Ahd/2006. 3. On the facts and in the circumstances of the case and without prejudice, the order of the learned Commissioner of Income-Tax (Appeals) cannot stand and deserves to be reversed. 4. On the facts and in the circumstanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowance out of depreciation. Similarly, with regard to disallowance of interest the AO followed his order for assessment year 2000-01 in which it was stated that loan was paid to Rahul Infotech Pvt. Ltd. and Vadana Computers Pvt. Ltd. and the other two companies directly by the bank and by the assessee. Since genuine purchase of the computers was doubted, therefore, interest was also disallowed. The learned CIT(A) following his order for assessment year 2000-01 confirmed the addition. As regards cash credit, the learned CIT(A) noted that cash credits have been taken in a sum of ₹ 5,53,22,463/- from Rahul Infotech Pvt. Ltd. , Vandana Computers Pvt. Ltd., Design Tech Computers and Soft Design. The additions were made because the transactions were found sham. It was submitted before the learned CIT(A) that transactions were carried out through account payee cheques and the transactions with two parties namely Rahul Infotech Pvt. Ltd. and Design Tech Computers were in respect of debit balance, therefore, additions cannot be made and their others details like Permanent Account Number were given. The learned CIT(A), therefore, directed the AO to verify the debit balance in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned with the Official Liquidator and after receipt of the same appeal was filed before the Tribunal. It is, therefore stated that the assessee lost the track because of the litigation going on at different stages including the Hon ble Gujarat High Court. When the assessee received the penalty notice u/s 271 (1) (c ) of the IT Act dt. 05-03-2009, calling for the assessee s explanation for the assessment year under appeal, the assessee came to know of the proceedings though remained in bona fide belief that appeal is pending before the learned CIT(A). It is, therefore, stated that due to the facts and circumstances and the assessee company went in liquidation and heavy litigation, the appeal could not be preferred in time. It is further stated that in assessee s own case in assessment year 1997-98 to 2002-03 ITAT Ahmedabad Bench vide its order dated 24-04-2006 in ITA No. 385 to 389/Ahd/2006 restored the matter back to the file of the learned CIT(A) for decision afresh. It is also stated that the departmental authorities have followed order for the earlier years for making the addition in which the matter is already restored to the learned CIT(A). It is, therefore, prayed that delay i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. We have considered the rival submissions and material on record. It is not in disputed fact that the assessee went in liquidation at the initial stage because of the order passed by the Hon ble Gujarat High Court and the Official Liquidator was appointed in the matter. The AO framed the assessment in the name of the Official Liquidator attached to the assessee company and ultimately after various rounds of litigations and taking steps in the matter winding up was set aside by the Hon ble Gujarat High Court in January, 2008. These facts were sufficient to hold that the assessee was prevented from sufficient cause from preferring the appeal in time before the Tribunal. Since the existence of the assessee was in liquidation before the Hon ble Gujarat High Court, therefore, the assessee could not have moved the appeal for the purpose of filing appeal before the Tribunal. Considering the facts and circumstances and the documents placed on record, we have to take pragmatic and liberal approach while condoning the delay in the matter. Further, the assessee explained that in the earlier years the matter is restored to the file of the learned AO for reconsideration. The assessee furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the Tribunal. We accordingly, condone the delay in filing the appeal. The application of the assessee for condonation of delay is accordingly allowed. 8. Now, considering the additions on merits, it is clear that the learned CIT(A) confirmed the disallowance of depreciation and disallowed the interest on the basis of the appellate order passed in assessment year 2000-01. The AO also made addition on the basis of findings given in assessment year 2000-01. In assessment year 2000-01, the Tribunal decided the cross appeals of the assessee and the revenue vide order dated 15-10-2010 and in Para 6 allowed the appeal of the assessee by restoring the matter to the file of the AO. The parties involved in this year were M/s. Rahul Infotech Pvt. Ltd. (RIFL) and M/s. Vandana Computers Pvt. Ltd. (VCPL). Therefore, the facts being identical, the matter requires reconsideration at the level of the AO. As regards cash credits, the substantial issue is already restored to the file of the AO to verify the debit balance and for other two creditors the assessee did not get any proper opportunity of hearing in the matter. The assessment order is framed in the name of the Official Liquidator and d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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