Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (9) TMI 1239 - ITAT HYDERABADRepairs and replacements - whether amount of repairs and replacements claimed in the original return was allowed to assessee under the depreciation head or in the absence of the same allowable as revenue expenditure as was done by the Ld. CIT(A)? - Held that:- Even though the Revenue relied on certain depreciation schedules and assessee also furnished certain schedules, same could not be verified by us in the absence of the original claim of depreciation schedules, the AO’s working of depreciation, submissions of assessee in the course of assessments. As already stated above, there is no separate repairs and replacement expenditure in the schedules to the P&L A/c as verified by us. Whether it was part of any other head of account and claimed in the computation or from balance sheet amounts or from any other schedules of expenditure could not be verified as assessee has not placed the complete certified P&L A/c copies. Assessee being a public limited company, the annual reports filed with the Company Law Authorities and also the Income Tax computations at the time of assessments required to be examined. Since they are not placed before us, we cannot give any finding on this issue at the moment. As seen from the orders of CIT(A), he has considered that the amount was not allowed to assessee in the depreciation schedule and allowed in his order and made further disallowance of 0.5% of the claim as he considered the amount as part of production expenses, disallowed that amount on the basis of orders of ITAT in earlier years as well in the impugned year. To that extent, CIT(A)’s order is to be confirmed. However, in case the same amount was already added in the depreciation schedule as an addition during the year but claimed as revenue expenditure at 100% under the head ‘Repairs and Replacement’, the same cannot be allowed as it will be a double claim. In case the claim of repairs and replacement is in addition to the additions to assets shown in the schedule and those two figures are entirely different, then Revenue’s contentions that there is a double claim, cannot be accepted. However, these require deeper analysis with entire assessment record and unfortunately, neither party placed complete details before us even though written submissions are given, relying on their own stated positions. Therefore, we are of the opinion that this issue requires examination by the AO afresh. Accordingly, he is directed to 1. Examine the claim of repairs and replacement and the original accounts from which the amounts were claimed in the computation of income at the time of filing original return. 2. Whether the amounts claimed under the head ‘Repairs and Replacement’ is same as that of additions shown in the balance sheet as new assets which the AO has considered and allowed depreciation. AO is directed to examine all the depreciation schedules and also account schedules and determine whether the amount is different from the amounts considered in depreciation schedule or not? In case the same amount was taken in the depreciation schedule, AO is directed to exclude the same and allow the amount as revenue expenditure as per the directions of Ld. CIT(A). In fact the entire claim of ‘Redundant Animation Project’, ‘Redundant Software Project’ was directed to be examined and allowed by ITAT but AO allowed partly as revenue expenditure. Therefore, we do not see any reason that balance of the amount should be capitalized. Accordingly, AO is directed to exclude the same, if it is claimed and allowed in the depreciation schedule also. With these directions, while upholding the orders of the CIT(A) to that extent, AO is directed to re-examine the above issues on the basis of the record and schedules of P&L A/c and give a finding whether there is any double claim? In case the amount was also included in the depreciation schedule, he is directed to exclude the same and re-work out the depreciation on the balance amount. The amount is eligible for deduction as revenue expenditure subject to disallowance as directed by CIT(A). - Decided partly in favour of revenue for statistical purposes. Bad debts claim - Held that:- Whether the revised financial statements were only filed for the purpose of Income Tax or the company revised the accounts, not only in this year but also in later year, was not placed on record. In case assessee has written off the amounts in the revised financial accounts in this AY, the claim of assessee is allowable. To that extent, order of CIT(A) is to be upheld. AO is directed to examine and if revised financial schedules are accepted, Assessee’s claim is allowable. - Decided in favour of assessee for statistical purposes.
|