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Dipak M. Doshi Versus The Income Tax Officer, Ward-5 (3) , Baroda

2015 (12) TMI 31 - ITAT AHMEDABAD

Disallowance of depreciation on computers on the ground that the same were not put to use - Held that:- Total number of computers received were 88 in numbers and these computers were subject to positive report on testing. It is not coming out from the records that when the testing was carried out and whether the testing was carried out for the purpose of business requirements. In the absence of such material evidence, no inference can be drawn with regard to usage of the computers. Under these f .....

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KUL BHARAT, JUDICIAL MEMBER : This appeal by the Assessee is directed against the order of the Ld.Commissioner of Income Tax(Appeals)-V, Baroda [ CIT(A) in short] dated 27/03/2012 pertaining to Assessment Year (AY) 2007-08. The Assessee has raised the following grounds of appeal:- 01. On the facts and circumstance of the case as well as in law the lrd.CIT(A)-V, Baroda was erred in confirming 10% of various expenses as personal expenses even though expenses were incurred for the purpose of busine .....

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% of various expenses from postage and telephone, vehicle, petrol and motor car depreciation which were disallowed by the Assessing Officer and confirmed by CIT(A)-V, Baroda. (2) Allow depreciation on computers. (3) Any other relief which is permissible as per the law and facts and circumstance of the case. 2. Briefly stated facts are that the case of the assessee was picked up for scrutiny assessment and the assessment u/s.143(3) of the Income Tax Act,1961 (hereinafter referred to as the Act ) .....

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essee submitted that he does not wish to press the ground No.1 being smallness of the amount involved. The ld.Sr.DR has no objection. In view of the submission made by the ld.counsel for the assessee at Bar, we dismiss the ground No.1 of assessee s appeal as not pressed. 4. Ground No.2 is against confirmation of disallowance of depreciation on computers on the ground that the same were not put to use. The ld.counsel for the assessee submitted that the authorities below were not justified in maki .....

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three years. The ld.counsel for the assessee further drew our attention towards page No.12 of the paper-book in support of his contention that 88 computers were received. Since the trial run was carried out by the assessee, assessee is entitled for depreciation. He placed reliance on the judgement(s) of Hon ble High Court of Gujarat rendered in the case of ACIT vs. Ashima Syntex Ltd. reported at [2001] 251 ITR 133 (Guj) and of Kosha Cubidor Containers Ltd. vs. Dy.CIT reported at [2015] 53 taxman .....

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ilable on record and gone through the orders of the authorities below as well as the judgements relied upon by the ld.counsel for the assessee. The AO disallowed the claim on the basis that the computers are not put to use. The AO was of the view that there must be actual, effective and real user in the commercial sense. And the user must be so linked with the business that it can be said that there is an immediate nexus between the user and the business, i.e. the real business of the assessee. .....

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was supposed to start once entire infrastructure of Rishabh Software was in place and projects, for which it was being created, started. Vide letter dated 23rd March 2007, Rishabh Software informed the appellant that they confirm receipt of 88 computers which will be retained by them for use on lease for a period of three years. This was subject to positive report on testing which was expected to be received by the end of the week. It was further stated in the letter that the appellant could st .....

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