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TMI Blog2016 (11) TMI 949X X X X Extracts X X X X X X X X Extracts X X X X ..... on record. (c) On the facts and in the circumstances of the case, the Assessing Officer was not justified in disallowing the mandatory depreciation without affording proper opportunity to the appellant to justify the ownership and use of plant and machinery and building (2) On the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals) was not justified in sustaining the addition of Rs. 1,50,000 on account of household expenses of the appellant which was made purely on conjecture, surmise and estimation." 2. 2.1 Brief facts of the case are that the assessee filed the return of income on July 30, 2007, declaring a total income of Rs. 1,27,460. The return was processed under section 143(1) of the Act on March 10, 2008, and first notice under section 143(2) was issued by the Assessing Officer on September 11, 2008, and, thus, the Assessing Officer completed the assessment under section 143(2) on December 30, 2009. The Assessing Officer observed that the assessee claimed depreciation of Rs. 2,53,544 on machinery and Rs. 1,77,888 on building. The Assessing Officer made detailed verification in this regard. He observed that purchase of machinery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that the appellant failed to establish the genuineness of the expenditure either for machinery or for the building. The fact that the investment pertains to the earlier years is not relevant. Moreover, the Assessing Officer has not disallowed the entire investment but only disallowed depreciation claimed during the relevant year. The claim of the appellant that the enquiry was made behind her back is also not factually correct because the result of the enquiry was communicated to the appellant by the Assessing Officer. The Assessing Officer not only issued a letter to the appellant but also sent summons under section 131 at the Beawar and Jalgaon address of the appellant. The appellant failed to make compliance in response to the summons before the Assessing Officer. Therefore, her claim that no proper opportunity was given by the Assessing Officer is absurd, to say the least. 5.5 In view of the detailed discussion made by the Assessing Officer in the assessment order, it can be reasonably concluded that no investment in plant, machinery or building was made by the appellant. Only bills were arranged from various parties, to whom no payments were made for the same. On the basi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to dispose of the concerned grounds of appeal. Accordingly, I am not inclined to admit the additional evidences filed by the assessee and, hence, the application filed by the assessee under rule 29 of the Income-tax (Appellate Tribunal) Rules is rejected. 2.5 It is further observed from the record that the basic contention of the authorities below while disallowing the claim of depreciation in the present case has been that the assessee has not actually made any investment and only bogus bills were obtained and have been shown in the balance-sheet. Therefore, the claim of the depreciation of Rs. 4,31,432 on the building, plant and machinery as shown in the balance-sheet for the year ending March 31, 2007, placed at pages 47 of the paper book filed by the assessee, is not the real investment and, therefore, the depreciation so claimed was disallowed. However, I find that the assessee disclosed job receipts on account of manufacturing of plastic granules of Rs. 6,51,000, as appearing in the trading account, copy placed at the assessee's paper book page 46. The Assessing Officer, however, rejected the books of account produced in support of such receipts and feeling dissatisfi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at page 46 of the paper book which clearly shows that the assessee also made payment of electricity charges totalling to Rs. 94,675, out of which Rs. 81,375 was paid to M/s. Maniyar Plast Ltd. whereas Rs. 13,310 were paid to the Maharashtra Electricity Board. Copies of electricity bill and debit notes are available in the assessee's paper book at pages 112 to 117. Similarly, wages of Rs. 22,270 was also paid this year in connection with the job work done by the asses see and the supporting vouchers were submitted which are placed on record. It is observed that the assessee also submitted copies of all the bills and vouchers of the plant and machinery and of the building material, etc., together with the copies of the transport receipts before the authorities below which are available in the assessee's paper book from pages 52 to 95. It is noticed that the first balance-sheet was drawn by the assessee in the assessment year 2004-05 when it came in production and, thereafter, the balance-sheet for the assessment years 2005-06 and 2006-07 were also prepared which included the cost of the building and plant and machinery and the claim of depreciation in those years. Considerin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not submitted but informed that Rs. 7,500 is deposited for registration in the Institute at New Delhi. The Assessing Officer observed that it was informed that the expenses incurred amounting to Rs. 7,96,342 were incurred by the daughter herself in her marriage. The Assessing Officer observed from the argument of the assessee that the expenses is incurred by the daughter which is not acceptable as in the marriage the expenses are borne by the parents. The Assessing Officer observed that looking to the standard and size of the family and education of the children, the expenses shown Rs. 5,000 is not acceptable. Hence, the Assessing Officer issued the summons under section 131 of the Act which was not complied with by the assessee and the assessee did not submit the complete details of marriage expenses and the household expenses from which the Assessing Officer could deduce the actual expenses incurred by the assessee. In this view of the matter, the Assessing Officer came to the conclusion that the assessee has incurred expenses on household and marriage of daughter at Rs. 1.50 lakhs which was added to the income of the assessee. 3.2 Being aggrieved, the assessee carried the matt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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