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2019 (7) TMI 418 - AT - Income Tax
Assessment u/s 153A - addition made by the A.O. without incriminating material and the assessment was completed and not pending on the date of order - violation of principles of natural justice due to non-allowing the cross examination of the witness - addition made U/s 68 of the Act in respect of the unsecured loan and share capital received from M/s Jalsagar Commerce Pvt. Ltd - benefit of telescoping, recycling and rotation of funds by rejecting the peak credit theory - HELD THAT:- As relying on M/S. KOTA DALL MILL VERSUS THE DEPUTY COMMISSIONER OF INCOME-TAX AND VICE-VERSA [2019 (1) TMI 344 - ITAT JAIPUR] and M/S. BARAN ROLLER FLOUR MILLS P. LTD. AND VICE-VERSA [2019 (1) TMI 1543 - ITAT JAIPUR] addition made by the A.O. U/s 153A of the Act is not sustainable and liable to be deleted when the assessment for the A.Y. 2010-11 was completed U/s 143(3) of the Act and was not pending as on the date of search on 02/7/2015. grounds of the assessee’s appeal stands allowed.
Disallowance u/s 14A - HELD THAT:- The fact recorded by the ld. CIT(A) that the assessee has not earned any exempt income during the year under consideration has not been disputed by the department and therefore, in view of the settled proposition of law on this point and particularly the decision of Hon’ble Delhi High Court in the case of Chemvest Ltd. Vs CIT [2015 (9) TMI 238 - DELHI HIGH COURT] we do not find any error or illegality in the order of the ld. CIT(A) qua this issue. Hence, we uphold the same.
Disallowance on account of depreciation - assessee company has not carried out any business activity during the year - HELD THAT:- In the immediate preceding year, the assessee has disclosed substantial amount of turnover and business income and the A.O. has allowed the depreciation. Therefore, merely because there is no turnover during the year under consideration, cannot be a reason for disallowance of deprecation once the asset was already put to use in the preceding years. We find that the disallowance of depreciation on the ground of the asset not to put use can be considered only at the first year of acquisition of asset but once the asset was duly used in the business of the assessee then in the subsequent year if there is no business activity due to temporary suspension of activity or lull in the business, the claim of depreciation being a statutory allowance cannot be disallowed. Accordingly, we do not find any error or illegality in the order of the ld. CIT(A) qua this issue.