TMI Blog2015 (11) TMI 750X X X X Extracts X X X X X X X X Extracts X X X X ..... al Member This Revenue's appeal for assessment year 2007-08, arises from order of the CIT(Appeals)-VIII, Ahmedabad, dated 16.12.2010 passed in Appeal No. CIT(A)-VIII/IDC-4/757/09-10, in proceedings u/s.143(3) of the Income Tax Act, 1961, hereafter 'the Act'. 2. The Revenue's first substantive ground challenges CIT(A)'s order deleting disallowance of ₹ 75,89,298/- of depreciation and additional depreciation as made by the Assessing Officer in a regular assessment framed on 29.12.2009. The assessee company trades in engineering spheres and tools. It had filed bills of fixed assets and ledger of M/s. Collective Marketing Pvt. Ltd. showing purchases there from of ₹ 1,41,65,777/-. The Assessing Officer in course of scrutiny noticed this payee entity to have been operating from Ahmedabad. The array of supplied products reads consumable stores, spheres for furnished division, lathe machine, water pump set, polishing machine, straightening machine, sharper machine and other plant and machinery, send filing work for their new projects etc. The assessee had shown further purchases of fixed assets of ₹ 75,17,932/- from another entity M/s. D H Ente ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er has mentioned stating that the purchases made from Collective Marketing Pvt. Ltd. are of ₹ 1,41,65,777/- and from D H Enterprise are of ₹ 75,17,932/- totaling to ₹ 2,16,83,709/- and the Assessing Officer has not given any comments even in his Remand Report about how such figure is arrived at as against the amount of purchase explained by the appellant company. On the basis of the details filed, purchases from these two parties i.e. from Collective Marketing Pvt. Ltd. is given in a summary form totaling to ₹ 83,28,336/-. Complete copy of bills of all these purchases which are on different dates mentioning the description, quantity, rate etc. are filed from Page 30 to 49. Similarly, total purchases from D H Enterprises is given in Summary form of ₹ 42,24,952/- and copies of all the three bills from the said party mentioning Invoice No., rate, Party's Sales Tax No., total amount etc. are there on page 51 to 53. 13. The assessee company to negate the contention of the Assessing Officer that purchases from Collective Marketing Pvt. Ltd. appears to be not genuine, has further filed purchase bills of the said company, i.e. Collective Marketing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Paper book, who had sanctioned a fresh Term Loan of ₹ 625 Lacs for setting up of new furnace of 4MT and one rolling mill of 16 inches to increase the capacity of the existing plant and machineries and also increased working capital limit from ₹ 195 lacs to ₹ 400 lacs. The Banks while sanctioning such loan more particularly while disbursing the loan normally verify the assets of the company. The assessee company has enclosed copies of request letter for disbursement of loan for purchase of machineries from these two parties namely; Collective Marketing Pvt. Ltd. and D H Enterprise on Page 107 to 111 of the Paper book. I have also examined the copy of the valuation report submitted by Gajjar Techno-Economic Consultants Pvt. Ltd. as on 21st May, 2008 filed on Paper book page 127 to 163 in which the Valuer also has certified the existence and verification of all these assets. 15. My view gets further strengthen from the copies of the audited accounts, wherein the auditors in their Auditors Report appearing on Page 12 of the Paper book have confirmed that the assessee company has maintained proper records showing full particulars including quantitative details an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or example all necessary purchase bills of different dates mentioning descriptions, quantity, rate, sales tax details, invoices, books, sources of the suppliers company, their loans taken, cash credits, bank statements, confirmations, mode of payment by want of account payee cheques, income tax details etc. have been taken into consideration for accepting assessee's claim. The Revenue fails in rebutting the above stated conclusion under challenge by way of reference to paper book on record comprising of all these necessary details. We accordingly affirm the CIT(A)'s finding under challenge. The Revenue's first substantive ground is rejected. 5. The Revenue's second substantive ground challenges the lower appellate order deleting disallowance of ₹ 63,32,976/- being depreciation on rough forged rolls. The assessee had submitted its bill pertaining to purchase of the fixed assets in question i.e. rough forged blanks for rolls by way of three deals dated 22.03.2007 form M/s. Tirupati Industries at Malerkotla, Punjab aggregating to ₹ 1,26,65,952/-. It claim depreciation @80% on the same stating use of these assets for less than 180 days in the relevant pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the detailed submission, various evidences filed in the paper book and the contention of the appellant company. As can be seen from the assessment Order, the Assessing Officer has disallowed the depreciation on the ground that the assessee was asked to furnish documentary evidence of transportation, delivery and 'put to use' of these rolls vide Order sheet dated 25/11/2009 and the assessee company did not provide any documents and therefore, deprecation of ₹ 50,66,381/- and additional depreciation of ₹ 12,66,595/- are disallowed and added back to the total income. However, having carefully perused all the purchase bill, Transport receipt and the certificate issued by the Engineer in my mind there is no doubt with regard to receipt of rolls on 22 March, 2007. The assessee has claimed depreciation at the rate of 80% but as also observed by the Assessing Officer at 1/2 rate because the same were put to use for less than 180 days. The assessee company has discharged fully the genuineness of its purchases of these rolls on 22nd March, 2007 by cogent evidences and therefore the assessee company is entitled to the depreciation and additional depreciation thereon. In vi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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