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2018 (12) TMI 748 - AT - Income TaxDisallowance of depreciation on fixed assets of media library created by way of capitalisation of stock and scrap in trade - Held that:- It is evident that in the assessment year 2007-08, the total addition of ₹ 7,97,00,000/-has been made to the fixed assets of media library, which included amount of ₹ 3,19, 95,890/- on account of revaluation of the stock in trade. No doubt that in view of the order of the Tribunal(supra), the assessee is not entitled to depreciation in respect of the amount of ₹ 3,19,95,890/-however, the claim of the depreciation in respect of the balance amount of rupees ( 7,97,00,000 – 3,19,95,890) = 4,77,04,110/- cannot be denied, if otherwise it is allowable in terms of section 32 of the income tax act. Similarly the additions made to the media library of ₹ 2,13,783/- and ₹ 11,21,148/- are also eligible for depreciation if actual addition to fixed asset has been made by the assessee subject to the conditions of Section 32. We find that the lower authorities have not examined this issue of allowability of the depreciation other than the amount of ₹ 3,19,95,890/-, we feel it appropriate to restore this issue to the file of the Ld. Assessing Officer for examining the allowability of the depreciation on the amount other than the ₹ 3,19,95,890/-in accordance with the provisions of the Act. It is needless to mention that the assessee shall be afforded adequate opportunity of being heard. The ground of the appeal, is accordingly allowed for statistical purposes. Disallowance of staff welfare and other business expenses - Held that:- Addition mainly in view of nonproduction of the vouchers or logbook or other evidences in support of the claim of the expenses by the assessee. It is also settled law that no such disallowance can be made on ad hoc basis without pointing out specific defects in the claim of the assessee. In view of the above facts and circumstances of the case and the issue of the claim of depreciation already restored to the file of the Ld. Assessing Officer, we feel it appropriate to restore this issue also to the file of the Assessing Officer for deciding a fresh after providing adequate opportunity of being heard to the assessee. Disallowance of expenditure incurred through the credit card held by the directors of the company - Held that:- In absence of the details of expenses incurred by the credit card for the purpose of the business of the company, the AO made disallowance at the rate of 50% of the total expenses incurred through the credit card . We have heard the rival submissions of the parties on the issue in dispute .Since the disallowance on this account has also been made on percentage basis in ad-hoc manner without pointing out specific expenditure being not for the purpose of the business, we feel it appropriate to restore the issue also to the file of AO for deciding afresh after providing adequate opportunity of being heard to the assessee. This ground of the appeal is also allowed for statistical purposes.
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