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2021 (12) TMI 597 - ITAT DELHIDisallowance of depreciation claimed by the assessee u/s 32 on the fixed assets acquired/purchased during the year - asset put to use or not? - one of the main contention raised by the assessee was that nowhere in show-cause notice or queries, AO has asked, whether the assessee has started its business or not - HELD THAT:- From bare perusal of the assessment order, it is seen that ld. AO put a query to the assessee on 18.03.2016 to file the details of fixed assets and why the depreciation should not be denied. In response, the assessee has submitted the details as well as purchased bills as noted by the AO - in the show-cause notice dated 18.03.2016 which has been noted by the ld. CIT (A) that, in the entire show-cause notice, nowhere there was any specific query whether the assets were put to use during the year. Production was carried out by utilizing raw material and finished & semi-finished stocks at the year end. Not only that, the goods produced had also been sold and revenue from the operation has also been shown at ₹ 6,80,056/-. This is not only mentioned in the audited financial accounts, which were there before the AO, but also from the statutory record of RG-1 register, copy of excise return and copy of VAT Return. Once a new factory has been set up with new plant & machinery which was used for production during the year and depreciation has been claimed on such plant & machinery, then same cannot be denied on the ground that the plant & machinery of the new assets purchased during the year were not put to use. The aforesaid finding of the ld. CIT (A) is not only based on appreciation of facts but also in accordance with law and hence said finding is affirmed. - now it is a well trite law even if assets are ready to use, which here in this case was actually put to use, then also depreciation cannot be denied.- Decided in favour of assessee.
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