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2022 (4) TMI 670 - AT - Income TaxRevision u/s 263 - AO allowing the claim of the assessee for loss on sale of shares as well as loss on future trading - HELD THAT:- As found by the learned CIT on examination of the relevant assessment records, the relevant details to ascertain the exact nature of transactions effected by the assessee in shares or future trading were not called for by the Assessing Officer during the course of assessment proceedings and there is nothing brought on record on behalf of the assessee to rebut or controvert this finding of fact specifically recorded by the learned CIT during the course of proceedings u/s 263 - It is thus clear that the claim of the assessee for loss on sale of shares and loss on future trading was allowed by the Assessing Officer without making the necessary inquiry which was called for in the facts and circumstances of the case and there was an error in the order of the Assessing Officer passed under Section 143(3) of the Act on this aspect of the matter as rightly pointed out by the learned CIT which was prejudicial to the interest of the Revenue. Understatement of closing WIP shown by the assessee in respect of Andhra Project - As assessee has contended that the said amount received during the year under consideration represented the liability of the assessee and there being nothing to show that the same represented income of the assessee for the year under consideration from Andhra Project, the learned CIT was not justified in treating the same as an income of the assessee for the year under consideration. We are inclined to accept this contention of the learned Counsel for the assessee. Moreover, this amount treated by the learned CIT as an income of the assessee for the year under consideration from Andhra Project has already been included by the assessee in the amount declared as his income from Andhra Project in the immediately succeeding year, i.e. AY 2010-11, and the addition of the same again in the year under consideration has clearly resulted in double addition which is not justified. After treating the amount as an income of the assessee for the year under consideration for Andhra Project, the balancing figure was treated by the learned CIT as a closing WIP in respect of Andhra Project as on 31.03.2009. Having held that the said addition made in the year under consideration is not sustainable, the balancing figure representing closing WIP in respect of Andhra Project and the amount understated on account of closing WIP in respect of Andhra Project would consequently be increased to that extent. Once this amount is treated as closing WIP of Andhra Project as on 31.03.2009 and added to the total income of the assessee for the year under consideration, it follows that the same would be taken as opening WIP in respect of Andhra Project for the immediate succeeding year, i.e. AY 2010-11. AO allowing wrongly the claim of the assessee for depreciation in respect of the block of asset of "plant and machinery" pertaining to Andhra Project and Earth-work project - As rightly contended by the learned Counsel for the assessee, even the maintenance work and labour work carried out by the assessee in respect of Earth-work project during the year under consideration involved use of plant and machinery and the assumption of the learned CIT, to the contrary, is without any basis. Moreover, as further contended by the learned Counsel for the assessee, the plant and machinery pertaining to Andhra Project as well as Earth-Work Project were kept ready for use by the assessee and, keeping in view the passive use, the assessee was entitled to claim depreciation in respect of the said plant and machinery. It is also pertinent to note here that, as per the concept of block of assets, individual item of plant and machinery losses its identity once it enters the block and the user condition is not required to be satisfied vis-à-vis every item of plant and machinery for claiming the depreciation in respect of the entire block. In our opinion, the claim of the assessee for depreciation on plant and machinery pertaining to Andhra Project and Earth-work Project thus was rightly allowed by the Assessing Officer in the order passed under Section 143(3) of the Act and there was no error in the said order calling for any revision by the learned CIT under Section 263 of the Act.
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