9911796707
TMI Blog2015 (7) TMI 833X X X X Extracts X X X X X X X X Extracts X X X X ..... ring. 3. The only issue in the appeal of the Revenue is that Commissioner of Income Tax (Appeals) erred in allowing the assessee's claim under section 10A of the Act. 4. Brief facts are that assessee is a private limited company engaged in the business of export of software. There was a search and seizure operation in the case of Mr. Subash Chand Nahar, director of the assessee company on 26.10.2005 . In the course of search trial balance and profit and loss account dated 12.3.2002 relating to the assessee was found. Therefore, notice under section 153C read with section 153A was issued on 27.11.2008 calling for return of income. In response to the said letter, assessee filed letter stating that it had already filed return for the assessment year 2001-02 on 28.03.2002 and a copy was furnished. The assessment under section 143(3) read with section 153C was completed on 24.12.2008 and while completing the assessment exemption under section 10A was not allowed stating that certificate in Form 10A was not filed along with the return. On verification of schedule, it was found that there was no new plant and machinery and all the plant & machinery were old. It was the observation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luded that assessee is eligible for exemption under section 10A of the Act observing as under:- "4.1 The ld. AR has strongly argued against the disallowance made by the AO as above. He has filed written submission and various details in support of his contention that the claim of deduction u/s 10A is proper. He stated that the AO has given a finding that the deduction u/s l0A is liable to be disallowed in view of the provisions contained in explanation to s.10A(2) since all the items of plant and machinery used in the new business were old. He filed copy of green card bearing no. 1317 issued by the Director, Software Technology Park of India, Chennai and also approval letter dated 05.10.1999. He also filed copy of custom bond register by way of evidence to the effect that the various computer systems and other machinery were imported. It clearly proved that all the computers and stentura machines were acquired / imported only after approval from STPI. Thus, the AO's finding that the machineries were purchased before STPI approval is contrary to the facts. He relied on the decision of Punjab and Haryana High Court in the case of CIT v. Excel Softech Lt (2008) 13 DTR (P&H) 201 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2001-02 was duly filed by the appellant within time along with auditor's report and audited balance sheet. The AO has not been able to lay his hands on the return. The notice for the A.Y. 2001-02 was issued for the first time on 27.11.2008 and the time given to file the return was 15 days. The assessment was required to be completed before 31.12.2008 and accordingly it was completed on 24.12.2008. He further stated that even the AR of the appellant had also attended before the AO. He also stated that the AO has not given any comment in respect of para 3.1 (e), (f), (g) and (b) of the written submission and as such the AO was not at all justified in rejecting the claim u/s l0A and taxing the income as not exempt. The.AO was not justified in ignoring the certificate in form No.10A issued by the Chartered Accountant and ignoring the letter of the appellant dated 22.02.2002 asking for rectification of mistake apparent from records based on note given in the audited statements of account. The AO should have appreciated that the revised WDVs as per rectification were adopted for the A.Y. 2001-02 for the purpose of working out eligible depreciation. Hence, the additions made in the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 2001-02 relevant to the assessment year 2002-03 and 2003-04 the assessee did not get any business of medical transcription but the plant and machinery were kept ready to use. Counsel for the assessee placing reliance on the decision of Third Member decision of Chennai Bench in the case of ACIT Vs. Chennai Petroleum Corporation Ltd. (125 ITD 396) submits that in order to claim depreciation under section 32 it is not necessary that machinery in question should have been actually used in the relevant previous year for the purpose of business and it is sufficient if the same is kept ready for use during the relevant previous year, though not actually used due to circumstances beyond control. Counsel for the assessee submits that decision of the Bombay High Court which the Commissioner of Income Tax (Appeals) relied on was also considered by the Third Member. 11. Departmental Representative supports the orders of lower authorities. 12. Heard both the sides. Perused orders of lower authorities and the decisions relied on. Commissioner of Income Tax (Appeals) denied depreciation for the reason that assessee has not carried on any business during the year and the assets were not pu ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
