TMI Blog2015 (10) TMI 472X X X X Extracts X X X X X X X X Extracts X X X X ..... hines stands allowed in a scrutiny assessment framed for preceding assessment year 2006-07. The hon’ble jurisdictional high court in ACIT vs. S K Patel Family Trust [2012 (6) TMI 790 - GUJARAT HIGH COURT] holds that once a block of assets is put to sue, segregation of assets forming part thereof for the purpose of granting depreciation on the ground that the same had not been put to use; is not justifiable. This lordships quote earlier decision reported as CIT vs. Sonal Hem Industries (2009 (2) TMI 84 - GUJARAT HIGH COURT). The Revenue does not point out distinction on facts and law. Its corresponding ground is accordingly rejected.- Decided against revenue. Low household withdrawal addition - Held that:- It has come on record that asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... educed the paid sum of ₹ 2 lacs accordingly from gross of the two sums of ₹ 8,73,734/- + ₹ 10,56,649/- = ₹ 19,30,383/- and added balance amount of ₹ 17,30,387/- in assessee s hands. 3. The CIT(A) has reversed Assessing Officer s action as follows:- 4.2. During the course of appellate proceedings, the AR of the appellant submitted that the main reason for the delay in payment of labour charges was the non-receipt of the job-work receipt for the month of February and March 2007 since, during this period on account of global recession the diamond industry was facing a tough time. The learned AR explained that the said labour payment stands paid by the appellant in the subsequent month in the next year on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourer month (Rs. 9,476 / 3 months) 3 3,159 In view of the above, the AR of the appellant contended that the AO has made the impugned addition on a wrong footing and in fact the average labour payment per labourer per month works out to ₹ 3,159/- as shown in the above table, which under no circumstances can be considered as low. Moreover, it was also submitted that the AO has not brought any evidence on record to allege that the appellant had earned any income outside the books of accounts, so as to make the labour payments outside the books and there is also no evidence that the appellant had made any payment outside his books to the labourers. In view of these ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion that the AO is at all not justified in presuming that the appellant might have made labour payment outside the books and therefore, I hereby delete the addition of ₹ 17,30,383/- as made by the AO for outstanding labour payments as at the year end. In the result, Ground of Appeal No. 1 of the appellant is allowed. 4. The Revenue strongly reiterates the Assessing Officer s inference drawn of labour payments of ₹ 918/- per household in first February month. The assessee strongly supports the CIT(A) s order under challenge. Its P L forming part of the case file reveals diamond cutting labour charges expenses of ₹ 28,01,793/- up to 31/03/2007 i.e. much more than ₹ 2 lacs stated in assessment order. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be alleged that the diamond marker machines are of no use in the diamond cutting activity carried out by laser machines. The AR further submitted that over and above the diamond laser cutting activity, he is also engaged in the business of importing of rough diamonds, manufacturing of polished diamonds and sales thereof, in his proprietary concern M/s. Amrutlmpex and the said activity has been reported by the statutory auditor in Clause No. 8(a) of the Tax Audit Report and has also been accepted by the AO himself in Para 4 page 2 of the assessment order. Further, it was explained that in the current year, the appellant has imported rough diamonds amounting to ₹ 4,16,99,691/- in February 2007 for manufacturing of polished diamonds poli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts Ltd. Vs. ITO (2008) 22 SOT 429 (Mumbai). In view of these submissions, the AR of the appellant pleaded that the disallowance of depreciation as made by the AO needs to be deleted. 5.2. I have considered the facts of the case, the order of the AO and the submissions of the appellant. It is seen that the Diamond Marker Machines are used to plan the shape, size and design in which the rough diamond is to be cut so as to get the maximum yield of polished diamonds and minimum rejection of rough diamonds and thereafter, the rough diamonds are cut with the help of Diamond Laser Machines. Thus, I agree with the appellant that the Diamond Marker Machines are also used in the activity of cutting diamonds on job-work basis and the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
