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ADC India Communications Limited (Earlier Known As Krone Communications Limited) Versus The Assistant Commissioner of Income-Tax

2016 (11) TMI 1254 - KARNATAKA HIGH COURT

Genuine purchase of plants and equipments - depreciation claim - Held that:- This Court cannot readily accept the contention of the assessee that a Biogas plant, which as per one of the Chartered Engineers was having a Replacement cost only at ₹ 2.53 lakhs, was purchased by the assessee-company at ₹ 50 lakhs and claim of 100% depreciation could be made thereon. Therefore, this burden of the assessee does not seem to have been appropriately discharged by the assessee in the present ca .....

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ee-company and its right to claim depreciation thereon, the petitioner-company is relegated back before the first appellate authority namely, the Commissioner of Income Tax (Appeals). It goes without saying that if the assessee-company leads appropriate evidence to support its claim even before the first appellate authority, who undoubtedly has the co-extensive powers as are available to the Assessing Authority under the Act, the said first appellate authority is expected not to shirk its respon .....

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he respondent-Assessing Authority, Assistant Commissioner of Income Tax, for the Assessment year 1994-95 raising a demand of ₹ 1,95,56,185/-. 2. The learned senior counsel Mr.N.Venkataramana appearing for the petitioner urged before the Court that the said demand upon a rectification order, stands reduced, however, the rectification order passed by the same authority was not placed on record. 3. The issue raised in this second round of litigation is that the earlier remand to the Assessing .....

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n remand. The Assessing Authority is free to assess sale value of the product with reference to the materials pertaining to the supplier and other relevant material if any. Accordingly, the appeal is disposed of . 4. The matter in issue is, as to whether the plants and equipments, namely two Biogas Plants and one Flameless Furnace shown to have been purchased by the petitioner-assessee during the relevant Assessment Year at the stated the price of ₹ 50 lakhs for two biogas plants and ͅ .....

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he lease rent earned by the assessee during the previous year, the tax has been paid by the assessee-company. 5. However, to check the exaggerated claim of depreciation on the so called inflated price of these plants, the Assessing Authority relied upon the certificate of a Chartered Engineer, M/s.Techno Economic Consultants, which opined in the said Certificate that the price of the said two Biogas plants and one Flameless Furnace in his estimation, was only to the extent of ₹ 2.53 lakhs .....

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and Flameless Furnace to the extent of ₹ 2.53 lakhs and reducing the claim of depreciation accordingly, has computed the net tax payable by the assessee company along with the interest and penalty in the impugned order. Therefore, the petitioner-assessee has approached this Court by way of this writ petition, aggrieved by the said order. 7. The learned senior counsel appearing for the petitioner-assessee urged before the Court that after the lapse of more than 20 years, in this second roun .....

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Commissioner of Income Tax (Appeals) as per Section 254 of the Act, 1961. He also urged that the due tax as earlier assessed has been paid on the lease rentals earned by the petitioner-assessee and the same has been paid. 8. Having heard the learned senior counsel appearing for the petitioner-assessee, this Court is of the opinion that the impugned assessment order directly cannot be assailed before this Court in the extraordinary jurisdiction of this Court under Article 226 of the Constitution .....

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ules was certainly on the assessee. The contra evidence adduced was by the Revenue in the present case in the form of the Certificate issued by M/s.Techno Economic Consultants, who valued these plants at only ₹ 2.53 lakhs in the year 1996. The burden of rebuttal of that evidence adduced by the Revenue also was on the assessee. Irrespective of the rounds of litigation, the assessee perhaps cannot claim any immunity from this burden to be discharged by it for establishing the fair and correc .....

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ut into the income taxable at the hands of the petitioner-assessee to a largely inflated extent, which cannot be permitted. The right of the assessing authority to question the inflated claim of depreciation cannot be doubted. 10. This Court cannot readily accept the contention of the assessee that a Biogas plant, which as per one of the Chartered Engineers was having a Replacement cost only at ₹ 2.53 lakhs, was purchased by the assessee-company at ₹ 50 lakhs and claim of 100% deprec .....

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