9911796707
TMI Blog2017 (3) TMI 947X X X X Extracts X X X X X X X X Extracts X X X X ..... iled its return of income declaring NIL income, but offering income u/s. 115JB of the Income Tax Act [Act] at Rs. 65,94,124/-. AO in the course of scrutiny assessment noticed that assessee has made additions to fixed assets under the head 'computers' at Rs. 2,81,80,784/- and claimed depreciation @ 60%. Vide query dt. 19-12-2013, assessee was asked to furnish the details of additions towards computers along with particulars of model number and make number etc., with copies of invoices. Assessee vide reply dt. 11-03-2014 submitted details to an extent of Rs. 22,36,836/- which were extracted in page 2 of the assessment order. For the balance amount of Rs. 2,59,43,948/-, assessee neither furnished the details nor produced invoices to prove that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t India Pvt. Ltd Mumbai vide letter dated 20.06.2013 offered to assemble the required set At a cost of Rs. 1,72,28,000. This material was placed before the Assessing Officer. The Assessing Officer, without examining the material available on record: without inspecting the premises and without considering the fact that the business activity of the appellant could not have been run without the said machinery disallowed depreciation, on a cost price of Rs. 2,59,43,948/-. The appellant submits that- It is in the business of media monitoring, research and analysis; a. It carried on the business activity and derived receipt of Rs. 8,90,83,747 ; b. It operated machinery in the process of its business activity and was able to carry on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ious cost. The definition of 'actual cost' is to be found in s. 43(1) and that of 'written down value' in s. 43(6). The latter defines it to mean: (a) in the case of assets acquired in the previous year, the actual cost to the assessee; (b) in the case of assets acquired before the previous year, the actual cost to the assessee less all depreciation actually allowed to him under this Act, or under the 1922 Act, or any .Act repealed by that Act, or under any executive orders issued when the Indian IT Act, 1886, was in force. Where the asset was acquired and also used for the business in the previous year, such value 'would be its fun actual cost and depreciation for that year would be allowed at the prescribed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rials for installation of assets. The depreciation cannot be granted on the basis of a fictitious claim or on the basis of some certificates of third party. Thus I hold that the Assessing Officer is justified in disallowing the depreciation as the claim of the appellant is fictitious. Hence the ground no.3 set out in grounds of appeal is dismissed". 4. It was the contention of Ld. Counsel that assessee has indeed purchased machinery in second hand and the said machinery/computers were available with assessee. It was also further submitted that AO was requested to inspect availability of assets so as to consider the depreciation claim but the same was not done. 5. The Bench has asked assessee-counsel to reconcile the schedule-7 (schedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revised return, the accounts of Laser Dot Ltd., were merged with Esha News Monitoring Services Private Limited and accordingly, assessee-counsel furnished copy of the final accounts before merger and after merger for consideration. As seen from the assessment order, there is no mention of any of these issues of either Laser Dot Ltd., or merger of Esha News Monitoring Services Private Limited. Accordingly, we are not going into those aspects as AO has not considered these issues at all in the assessment order. 6. Ld.DR however, submitted that assessee has not furnished any of the details and it is for assessee to submit the details so that the depreciation can be verified and allowed. Ld.DR referred to the detailed order of the CIT(A) and f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the equipment required for such business is of sophisticated nature. In case if it is purchased from second hand market, at least there will be some self-made vouchers and also the payments to persons who assembled the same. Since nothing was brought on record to establish that assessee has indeed purchased/ assembled the said computers/media equipment, we are of the view that AO and CIT(A) are justified in disallowing the depreciation. At least assessee could have furnished the copy of the returns filed before the AO of erstwhile company in due time, as the assets were not acquired by Laser Dot Ltd., but seems to be part of merged company, Esha News Monitoring Services Private Limited. Since nothing was placed on record to substantiate t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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