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2019 (9) TMI 301 - AT - Income TaxDisallowance u/s 40(a)(ia) - non deduction of tds on discount as interest u/s 2(28) - HELD THAT:- We are of the considered opinion that since the CIT(A) has allowed part of the said discount in A.Y 2007-08, the same should be allowed in full. We, accordingly, dismiss the claim in A.Y 2006-07 and allow the cross objection in A.Y 2007-08. The Assessing Officer is directed to allow the cash discount in A.Y 2007- 08. Disallowance of depreciation on plant and machinery purchased out of surrendered amount - HELD THAT:- We find that the lower authorities have dismissed the claim of depreciation on the ground that there is no evidence and it is not possible to ascertain the value of plant and machinery claimed to be installed during the year under consideration. The surrendered amount of ₹ 3.50 crores on this account has been accepted by the department. Therefore, the revenue cannot blow hot and cold in the same breath. The decision of the co-ordinate bench in the case of Sheth & Sura Engineering [P] Ltd [2007 (7) TMI 373 - ITAT PUNE] relied upon by the revenue authorities is misplaced because in that case the assessee had specifically stated that he is unable to furnish inventories in respect of plant and machinery and furniture and fixtures declared at the time of search action u/s 132 of the Act. Whereas, the facts of the case in hand show that the inventories of plant and machinery have been prepared by the Income tax department itself and has accepted the surrendered amount of ₹ 3.50 crores- the assessee has satisfactorily established its claim of depreciation Additional income disclosed over a period of six years on account of capital expenditure debited to the repairs and maintenance - no error or infirmity in the directions of the CIT(A). We, accordingly direct the Assessing Officer to compute the depreciation as per the rates applicable on the WDV of the block of assets as directed by the CIT(A). Ground No. 2 is, accordingly, allowed. Low tax effect - Monetary limit - retrospective effect of the CBDT circular - HELD THAT:- Tax effect involves in the appeal of the Revenue is below ₹ 50 lakhs. Circular No. 17/2019 dated 08/08/2019 will apply to all pending appeals. Therefore the precedent, it is held that the appeal is not maintainable in the instant case as the tax effect is less than ₹ 50 lakhs. Accordingly, it is held that appeal filed by the revenue is not maintainable. - Decided against revenue.
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