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2015 (8) TMI 164 - ITAT BANGALORE

2015 (8) TMI 164 - ITAT BANGALORE - TMI - Claim of assessee for depreciation @ 80% of energy saving devices denied - CIT(A) deleting the disallowance - Held that:- The CIT(Appeals) has not given any finding as to whether the plant in question formed part of energy saving plant. He has given relief only on the basis that the effluent treatment plant was installed during the F.Y. 2008-09 relevant to A.Y. 2009-10 and the AO in the assessment order dated 28.3.2011 has accepted the fact that effluent .....

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, after the introduction of concept of “block of assets”, the assets loose identity the moment they enter the block and therefore the rate of depreciation of a particular item of depreciable asset cannot be tampered with in a subsequent assessment year. In our view, the reasoning adopted by the CIT(Appeals) is just and proper and calls for no interference. - Decided against revenue.

Disallowance of purchases - CIT(A) deleting the disallowance - Held that:- It is no doubt true that it .....

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rt, there is no complaint by the AO that the purchase bills were not believable or the AO did not think it fit to make any further enquiry on the supporting bills filed by the assessee before the CIT(A). In these circumstances, the very basis on which disallowance was made by the AO no longer survives. Even on that basis, the CIT(A) could have allowed relief. Nevertheless, the CIT(A)’s conclusion was on the basis that the AO should have cross-verified from the parties from whom the assessee clai .....

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report filed by the AO before the CIT(Appeals), no facts have been stated as to why the claim of the assessee and genuineness of the transaction should be doubted. As we have already seen, a sum of ₹ 1.35 crores was received by Balkrishna Malkani from Jitendra Virwani by cheques and the same have been reflected in the income tax returns of Balkrishna Malkani as loans and the corresponding investment in the share application money of the assessee is also reflected. In such circumstances, t .....

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no adjudication. 3. Grounds No.2 & 3 read as follows:- 2. The learned CIT(A) erred in deleting the disallowance of depreciation of ₹ 20,46,677 on energy saving devices without considering that the assessee was not able to prove that the plants formed part of energy saving plant under Rule 5(1) of I.T. Rules. 3. The learned CIT(A) erred in deleing the disallowance of depreciation on energy saving devices by merely accepting the assessee s alternative contention that the said plants can .....

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of spirit used in making of liquors the Assessee also runs a liquor bottling plant. The manufacturing unit was located in Bidar district of Karnataka. As per the requirements of Karnataka Pollution Control Board (KPCB), it was mandatory for the assessee to install water treatment plant/seweage treatment plant. Accordingly the sewage treatment plant was installed by the assessee in the financial year 2008-09. As per section 32 of the Act, the rate of depreciation on such plant is 80%. It was poin .....

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nce of depreciation in the absence of documentary evidence without appreciating the fact that depreciation on sewage treatment plant has been claimed on the basis of written down value as on 1.4.2010 and no fresh addition to the asset has been made. Copy of depreciation schedule for A.Y. 2011012 was filed. The assessee relied on decisions of CIT v. Tajmahal Hotel (1971) 82 ITR 44 (SC), CIT v. Madras Cements ltd., 110 ITR 281 (Mad) and R.C. Chemicals Industries v. CIT (1982) 134 ITR 380 (Del) whe .....

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AO disallowed of ₹ 20,46,677/- being 80% depreciation claimed on Effluent Treatment Plant on the ground that the appellant failed to explain the higher rate of depreciation on the items with documentary evidence. On the other hand the appellant submitted that during the financial year relevant to the assessment year 2009-10 the appellant company had installed Sewerage Treatment Plant and as per the provisions of section 32 of the Act the rate of depreciation on such Sewerage Treatment Pla .....

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have verified the financial statement for the financial years 2008-09 and 2009-10 and from it reveals that the appellant installed Effluent Treatment Plant , with a cost of ₹ 1,27,91,731/- during the financial year 2008-09 and in the return of income for the assessment year 2009-10 depreciation claimed at the rate of 80% which is accepted by the AO in the assessment order u/s 143(3) dated 28/12/2011. During the financial year 2009-10 no addition was made and 80% depreciation was claimed on .....

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lled related to Sewerage Treatment device which could be classified under water pollution control equipment and the same is enumerated III (ix) of Part-A in New Appendix-1, wherein rate of depreciation is more than 80%. On the contrary, the appellant claimed 80% depreciation of total cost of such plant. However, since the genuineness of installation of plant and applicability of higher rate thereon has been accepted, there is no reason to denying the same, in view of fact that no addition was ma .....

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CIT(Appeals) has not given any finding as to whether the plant in question formed part of energy saving plant. He has given relief only on the basis that the effluent treatment plant was installed during the F.Y. 2008-09 relevant to A.Y. 2009-10 and the AO in the assessment order dated 28.3.2011 has accepted the fact that effluent treatment plant was to be treated as energy saving plant on which higher rate of depreciation at 80% has to be allowed. The CIT(A) allowed relief only on the reasoning .....

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r item of depreciable asset cannot be tampered with in a subsequent assessment year. In our view, the reasoning adopted by the CIT(Appeals) is just and proper and calls for no interference. Consequently, grounds No.2 & 3 are dismissed. 9. Ground Nos. 4 & 5 read as follows:- 4. The learned CIT(A) erred in deleting the disallowance of purchases of ₹ 84,48,518 merely on the ground that the AO should have cross verified from the other parties by issue of notice u/s. 133( 6) without app .....

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the assessee had claimed expenses on purchase of raw material and coal totaling ₹ 3,37,94,070 (2,08,49,432 + 1,29,44,538). Since the assessee did not produce invoices or other documents in support of the aforesaid expenses, the AO disallowed 25% of those expenses which resulted in an addition of ₹ 84,48,518 to the total income of the assessee. 11. Before the CIT(Appeals), the assessee contended that its purchases were supported by documentary evidence and that the AO in the course of .....

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o.942/Del/2011 dated 22.3.2013, wherein it was held that merely because the expenditure are expensive, that cannot be a ground for disallowance. If it done so, then that would be a disallowance merely on suspicion and presumption. Without prejudice to the above contentions, the assessee filed before the CIT(A) complete list of purchases along with copies of purchase bills. 12. The evidence filed by the assessee was forwarded by the CIT(Appeals) calling for a remand report from the AO. In the rem .....

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he Act. The AO cannot merely for absence of bills and invoices, make disallowance. In coming to the aforesaid conclusion, the CIT(A) placed reliance on TSL Defence Technologies P. Ltd. He accordingly deleted the addition made by the AO. 13. Aggrieved by the order of CIT(Appeals), the Revenue has raised grounds No.4 & 5 before the Tribunal. 14. We have heard the submissions of the ld. DR, who relied on the grounds of appeal. 15. We have considered his submission and are of the view that there .....

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se bills evidencing purchase of raw materials and coal before the CIT(A). In the remand report, there is no complaint by the AO that the purchase bills were not believable or the AO did not think it fit to make any further enquiry on the supporting bills filed by the assessee before the CIT(A). In these circumstances, the very basis on which disallowance was made by the AO no longer survives. Even on that basis, the CIT(A) could have allowed relief. Nevertheless, the CIT(A) s conclusion was on t .....

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ng the letter of one Mr. Jitendera Virwani who is supposed to have lent ₹ 1,35,00,000/- to Sri Malkani one of the share applicant without appreciating that the assessee could not prove the genuineness of the transaction even during the remand proceedings before the AO. 17. During the previous year, the assessee had received share application money to the tune of ₹ 1,83,09,432. According to AO, the assessee failed to furnish details to prove the identity of investor, creditworthiness .....

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money were furnished. This is in the form of confirmation letter from one Jitendra Virwani who claimed to have paid a sum of ₹ 1,35,00,000 to Balkrishna Malkani in the following manner:- Cheque No. Date Amount Remarks 092862 12/08/2010 Rs.1,00,00,000 Drawn on Citi Bank 029651 21/09/2010 ₹ 35,000 - do - Total Rs.1,35,00,000 19. The documents were forwarded to the AO. In the remand report, the AO did not raise any objection except stating that assessee was given opportunity to furnish .....

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