TMI Blog2016 (2) TMI 792X X X X Extracts X X X X X X X X Extracts X X X X ..... e of these facts, we are inclined to sustain the findings of the ld. CIT(A) with respect to deletion of impugned addition. Addition on account of building improvement of 35 HPSIDC, Baddi and errection of machines - Held that:- It is notable that no material or evidence was seized in the search to demonstrate that the assessee had incurred expenses in excess to that shown in the books of account. Moreover, on reference, the DVO, Chandigarh has valued the cost of construction of property No. 35 HPSIDC Baddi at ₹ 23,79,000/- on account of building improvement for A.Yrs. 2005-06 to 2007-08, which stands in consonance with the declared expense of ₹ 22,37,694/- shown by assessee in its books of accounts. Moreover, this issue has been decided by ITAT, Delhi Bench in assessee’s own case for A.Y. 2006-07 to 2008-09 in favour of the assessee. Disallowance of 1/8th of the telephone expenses, vehicle depreciation & vehicle maintenance on adhoc basis - Held that:- No expenditure is pointed out of inadmissible nature. The disallowance on mere suspicion and estimate is not sustainable in view of the decisions of Hon’ble Supreme Court in the case of Dhakeshwari Cotton Mills [1954 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer on account of unaccounted expenses and investment. 3. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in deleting the disallowances of ₹ 1,37,084/-, ₹ 72,008/-, ₹ 53,519/- made by the Assessing Officer out of telephone expenses, vehicle depreciation and vehicle maintenance respectively. 4. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in deleting the addition of ₹ 10,00,000/- made by the Assessing Officer on account of sale of scrap. 5. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in deleting the disallowances of ₹ 7,35,818/- made by the Assessing Officer u/s. 14A of the Income tax Act. 6. The order of the CIT(A) is erroneous and is not tenable on facts and in law. 2. The brief facts relevant to ground No. 1 are that the assessee is the owner of two units, namely, D-6, Delhi Unit and Baddi Unit. A search and seizure action u/s. 132 of the Act was carried out in Wings Pharmaceuticals group of cases on 14.02.2008 and the assessee company was also covered under the searc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od from its Delhi Unit. During the assessment proceedings, the assessee claimed depreciation for its Delhi Unit of ₹ 71,91,123/- which includes plant and machinery of D-6 and H-18 both. The assessee could not submit its claim of depreciation for its D-6 unit separately despite giving opportunity by the AO. The value of plant and machinery of D-16 unit and H-18 unit was shown at 1.60 crores and ₹ 46 lacs respectively, which represented depreciation of D-6 unit at 77.66%. Therefore, the Assessing Officer estimated the depreciation on the basis of this proportion at ₹ 55,84,624/- and accordingly, depreciation of ₹ 23,50,000/- was disallowed and added back to the total income of the assessee on account of major part of machines of D-6 unit were shifted to Baddi unit during latter part of the period. This addition made by the AO stood deleted by the ld. CIT(A) in appeal before him. 3. The DR relied on the order of the AO and submitted that there is no justification to delete the addition made by AO on account of excess depreciation claimed. The ld. AR of the assessee, on the other hand, relied on the order of ld. CIT(A). 4. Having considered the rival submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsonance with the declared expense of ₹ 22,37,694/- shown by assessee in its books of accounts. Moreover, this issue has been decided by ITAT, Delhi Bench in assessee s own case for A.Y. 2006-07 to 2008-09 in ITA Nos. 3247, 4072 4073/Del./2012 in favour of the assessee. Keeping all these facts in view, and respectfully following the decision of ITAT, we are of the considered opinion that the ld. CIT(A) has rightly deleted the addition made by AO for no good reason. Accordingly, ground No. 2 of the Revenue is dismissed. 8. Adverting to ground No. 3 of appeal of Revenue, it is born out on record that the Assessing has disallowed 1/8th of the telephone expenses, vehicle depreciation vehicle maintenance on adhoc basis holding that personal element in these expenses cannot be ruled out. No expenditure is pointed out of inadmissible nature. The disallowance on mere suspicion and estimate is not sustainable in view of the decisions of Hon ble Supreme Court in the case of Dhakeshwari Cotton Mills 26 ITR 775 and Sayaji Iron engineering Co. vs. CIT 253 ITR 749, wherein it has been held that no disallowance is called for on account of personnel use of vehicle/telephone by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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