TMI Blog2014 (11) TMI 470X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the AO has not found any discrepancy in the supporting evidence furnished by it regarding the acquisition and installation of the new fixed assets during the relevant year - he has verified the evidence regarding the new fixed assets acquired during the AY and the claim of the assessee in respect to the depreciation is valid in law – the order of the CIT(A) to allow the depreciation for the new fixed asset as per the claim of the assessee is upheld – Decided against revenue. Administrative and manufacturing expenses – Held that:- CIT(A) has recorded a finding that there was no material available with the AO on the basis of which he could have estimated the disallowance to the extent of 10% of expenses - there was no material or evidence before the AO, to support the disallowance at an ad-hoc rate of 10% of the total expense - CIT(A) has pointed out that the disallowance of the ad-hoc disallowance, smacks of arbitrariness and is devoid of any logic – thus, the order of the CIT(A) is upheld – Decided against revenue. Amount surrendered during the survey operation u/s 133A – Held that:- CIT(A) have pointed out that the AO has in all fairness has admitted in the remand re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luded the surrendered amount in the return income. 06. The appellant craves leave to add, to alter, or amend any grounds of the appeal raised above at the time of hearing. 3. Apropos deletion of addition of ₹ 1,00,12,658/- u/s 68 of the IT Act (hereinafter the Act) being unexplained cash credits. 4. Brief facts of the case are that the assessee company is engaged in the business of manufacturing and trading of kitchen cabinets, wardrobes and panel doors which are made of wood. 5. In this case, a survey operation was carried out under section 133A of the Act, was carried out at 1st Floor, JMD Regent Plaza, MG Road, Gurgaon and at Vill. Naharpur, Kassain, Manesar Distt. Gurgaon on 29.11.2005. During the course of survey operations, the following inconsistencies were found:- 1. Excess Cash ₹ 9,41,557/- 2. Excess stock ₹ 40,69,990/- 3. Unclaimed advances from customer ₹ 19,87,001/- 4. Unexplained investment for construction of office cum factory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment Year 2006-07 and earlier Assessment Year 2005-06. 9. The records reveals that the Ld CIT(A) forwarded the aforesaid documents to the Assessing Officer and after receiving the remand report from the Assessing Officer and after taking into consideration the rejoinder filed by the assessee the ld CIT(A) passed the impugned order by which he partly allowed the appeal of the assessee. Aggrieved by the said order of the ld CIT(A), the revenue is before us. 10. The ld DR relied on the Assessing Officer s order and the ld AR relied on the order of the ld CIT(A). 11. We have heard the rival submissions and perused the records. 12. From a perusal of the impugned order we note that the unexplained credits of ₹ 1,00,12,658/- consists of the following: (i) Unsecured loans ₹ 62,27,800/- (ii) Sundry Creditors ₹ 30,63,807/- (iii) Advance from Customers ₹ 7,21,051/- 13. The Assessing Officer made addition of ₹ 62,27,800/- being difference of closing and opening balance i.e. &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... os deletion of addition of ₹ 3,53,281/- made by the Assessing Officer on account of depreciation of new fixed assets. 18. The ld DR pointed out that the assessee did not file any evidence in support of the addition made to fixed assets during the relevant Assessment Year and therefore the Assessing Officer rightly completed the assessment u/s 144 of the Act and disallowed the depreciation on new fixed assets. On the other hand, according to the ld AR, Assessing Officer failed to consider the fact that new fixed assets were owned by the assessee and used for the purpose of business and thus the assessee was entitled to depreciation for the new fixed assets. According to the ld AR, since the particulars for claiming depreciation, were already available on the record of the Assessing Officer, it was wrong to disallow the depreciation on the new fixed asset. The ld AR also pointed out that the assessee brought the copies of the invoices in respect of the new assets acquired during the relevant year before the Ld CIT(A) who had forwarded the same to the Assessing Officer for his remand report and in the remand report of the Assessing Officer, there was no adverse comments again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t incurred for the purposes of business. 23. We would like to reiterate that it is a well settled principle of law that, when a Judicial or Quasi-judicial Authority are deciding a question of fact, that has to be decided on the basis of materials and evidences to support the same and not on the basis of surmises and conjectures as laid down in a catena of decisions of Hon ble Apex Court and that suspicion, howsoever, strong cannot take the place of proof. Here we find there was no material or evidence before the AO, to support the impugned disallowance at an ad-hoc rate of 10% of the total expense. 24. Ld CIT(A) has pointed out that the disallowance of the said ad-hoc disallowance, smacks of arbitrariness and is devoid of any logic. Therefore, in the said circumstances we find no infirmity in the order passed by the Ld CIT(A) and the appeal of the revenue fails on this ground also. 25. Apropos deletion of the addition of ₹ 75,00,000/- made by the Assessing Officer on account of amount surrendered during the survey operation under section 133A of the Act. 26. Brief facts of the case are that the assessee company is engaged in the business of manufacturing and tradi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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