TMI Blog2022 (6) TMI 1396X X X X Extracts X X X X X X X X Extracts X X X X ..... A.Y.2014-15 and that order is final. In view of this fact, we see no reason for lower authorities to disallow depreciation for A.Y.2013-14 the year in question. Here there is no question of arguing that principle of resjudicata is not applicable and hence the finding of A.Y.2014-15 cannot be said to be binding in A.Y.2013-14. On the same plant and machinery the same A.O. in one year allows depreciation at the prescribed rate of 100% and in another year on the same machinery the same A.O. totally disallows the depreciation. This is most inconsistent, and illogical. Applying the principle of consistency as is firmly established by the decision in the case of Radhasoami Satsang [ 1991 (11) TMI 2 - SUPREME COURT ] and Quest Investment Adviso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee has raised the following grounds. 1. The Ld. CIT(A) erred in disallowing depreciation, on Air and Water Pollution Control Machine, of Rs.30,41,138/- 2. The Ld. CIT(A) erred in disallowing Selling and Distribution Expenses of Rs.7,34,850/-. 2. Brief facts relevant for the purpose of this Appeal are that the Appellant- Company is engaged in the business of manufacturing and selling pharmaceutical formulation such as capsules, tablets, ointments, liquid oral, injections etc. During the financial year 2012-13 relevant to assessment year 2013-14 the Assessee-Company fabricated and installed Air Pollution Control Equipment and Water Pollution Control Equipment at the total cost of Rs.60,82,274/-. These equipments were put to us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led Written Submission and drew his attention to the certificate of Chartered Engineer (Valuer) regarding plant and machinery installed in Assessee s factory by fabrication and submitted that the Assessee was rightly entitled to 100% depreciation of Rs.30,41,138/- i.e. 50% of total cost of Rs.60,82,275/- as the same was put to use after 30th Sept. It was also pointed out that the Assessee had claimed balance 50% of depreciation amounting to Rs.30,41,138/- in subsequent year i.e. A.Y.2014-15 and the same Assessing Officer allowed the depreciation as claimed. 2.2 Learned CIT(A) in his order stated that the Assessee has failed to rebut the fact stated by A.O. that these machines are not mentioned in the prescribed list of specified items. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion Control equipment by chart and has given valuation of the said plant at Rs.67,65,000/-. However the Assessee has claimed depreciation at 100% of the actual cost of Rs.60,82,275/- and not on the valuation as per valuation report. While analyzing the entry we have to see the description of plant as a whole and not the description of various items small and big which go to constitute the plant. We have no doubt that the plant installed was the plant of air and water pollution control which was admittedly put to use after 30th September. Further on the very same plant and machinery the very same A.O. has allowed balance depreciation of 50% in A.Y.2014-15 and that order is final. In view of this fact, we see no reason for lower authoritie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on advertisement, annual conference expenses, cash discount, export commission, freight and transport, incentive to dealers, godown rent, heavy vehicle expenses and printed and promotional material expenses. A.O. considered the expenses at higher side. He therefore disallowed selling and distribution expenses to the extent of 2.95% i.e. Rs.21,72,102/-. However since he had already disallowed Rs.8,21,100/- separately out of printed promotional material, he disallowed Rs.13,51,002/- (Rs.21,72,102/- - Rs.8,21,100/-). 3.2 Against the said disallowance of Rs.13,51,002/- the Assessee objected to the said disallowance in an appeal filed by Assessee before ld. CIT(A). Assessee submitted before ld. CIT(A) that there is no dispute that these are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dited and the A.O. having not found any defect there was no justification to make some adhoc disallowance on some arbitrary assumption. Learned A.R. also relied on various case laws. As against this the learned D.R. relied on the order of A.O. and ld. CIT(A) and relied on the decision of Goodlas Nerolac Paints Ltd. Vs. CIT reported in (1982) 137 ITR P.58 (Bom.) which says that the Assessee has to prove that the expenses are wholly and exclusively laid out for business purposes and submitted that the said addition be confirmed. 3.4 We have heard the rival submission. At the outset it needs to be pointed out that there is no dispute that the relevant expenses are for business purpose and they have been allowed year after year. Ld CIT(A) ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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