TMI Blog2016 (2) TMI 352X X X X Extracts X X X X X X X X Extracts X X X X ..... DER PAL, JJ. FOR THE PETITONER : MR SN SOPARKAR, SR COUNSEL WITH MR B S SOPARKAR, ADVOCATE FOR THE RESPONDENT : MR MANISH BHATT, SR COUNSEL WITH MRS MAUNA M BHATT, ADVOCATE ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. All these petitions involve common question of additions made by the Assessing Officer under section 69C of the Income Tax Act ( the Act for short) and confirmed by the Commissioner in revision petitions filed by the assessee under section 264 of the Act. In Special Civil Application No.17162/2015, additional question of additional depreciation for installation of windmills also arise. 2. Facts may be recorded from Special Civil Application No. 17147/2015. The petitioner assessee is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 69C of the Act for making additions. Even if there was any unaccounted expenditure in the form of commission paid to the said two representatives of the company, as long as the source of such expenditure was reflected in the accounts of the company and thus was satisfactorily explained, section 69C of the Act would simply not apply. 5. On the other hand, learned counsel Shri Bhatt for the Revenue drew my attention to the detail discussions in the order of assessment as well as revisional order to contend that on facts, the Revenue authorities when concurrently found that there was unaccounted expenditure and source of such expenditure was unexplained, section 69C of the Act was therefore, correctly applied. 6. As is wellknown ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame of commission payable to the said individuals, may have retained such amount for themselves was also accounted for. In either case, in the opinion of the Assessing Officer, it amounted to outflow for the company and would partake the character of unexplained expenditure. In this background, the assessee owed a duty to explain the source of such expenditure. We may recall the explanation of the assessee was that the bills and vouchers were inflated to generate income for payment of such commission. However, such explanation was not accepted by the Assessing Officer in the order of assessment making following observations : 3.15 Another contention of the assessee is that even if it is to be assumed that such payment is actually made, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unaccounted income in this regard. The relevant portion of the said correspondence is reproduced below : In the year 1986 I had my rights over the Agency of Gujarat, which was demanded by you and seeing your position at that point of time and keeping in view my intense love and affection towards you, I had immediately agreed for the same. Thereafter, your position improved and hence, since then I am asking back from you my right over Gujarat Agency. On the Technical base, you got share of 40% to 45% in the partnership and in the line of Electrical Ceramics, because of the guidance of Pujya Bhai and further, since then I am asking back from you my right over Gujarat Agency. On the Technical base, you got share of 40% to 45% in the P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e issue, as can be appreciated, is based on the assessment of evidence on record. When the Assessing Officer and the Commissioner concurrently found that there was unexplained expenditure and source of such income was not satisfactorily explained, section 69C of the Act would certainly be applicable. 9. We may recall in Special Civil Application No.17162/2015 there is an additional question regarding additional depreciation. This issue was considered by the CIT(Appeals) in the revision petition. Disallowance was confirmed on the ground that such depreciation was not allowable to assessee who was engaged in generation and distribution of power, since such explanation was included in section 32 of the Act only with effect from 1.4.2013. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant should have been acquired and installed by an assessee, who was already engaged in the business of manufacture or production of any article or thing. Considering the aforesaid facts and circumstances and considering the relevant provisions of Section 32(1)(iia) of the Income Tax Act, which was prevailing at the relevant time, i.e. during the year under consideration, it cannot be said that the ITAT by applying the ratio of decision of the Madras High Court in the case of VTM Ltd (Supra) and in the case of Hi Tech Arai Ltd. (Supra) has committed any error in deleting the addition of ₹ 1,17,98,030/on account of disallowance of additional depreciation of Wind Electric Generator. 10. Under the circumstances, the decision of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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