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TMI Blog2024 (10) TMI 517X X X X Extracts X X X X X X X X Extracts X X X X ..... 3/2014 by the deputy Commissioner of income tax - 4 (3), Mumbai (the learned AO) was dismissed. 02. Assessee has raised following grounds of appeal: - "1. The order of the Ld. CIT(A)-9, Mumbai is erroneous both on facts and in law. 2. The Ld. CIT(A) erred in upholding the disallowance of the claim of depreciation u/s 32 of the Act for Rs. 47,93,682/- 3. The Ld. CIT(A) ought to have appreciated that depreciation u/s 32 of the Act is allowable once the asset is kept ready for its use in the earlier year(s) Le. prior to the assessment year under consideration. 4. The Ld. CIT(A) erred in upholding the addition of Rs. 4,15,44,689/- towards Unexplained Share Application Money. 5. The Ld. CIT(A) ought to have appreciated that the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e year, quantitative details of sales and information as required under paragraph 3 and 4C of part II of schedule VI to the companies act, 1956 is not applicable. Further, on verification of the profit and loss account the learned AO also observed that the assessee has not shown any income for the year under consideration. However it was noted that assessee has claimed various expenditure under various heads and depreciation of Rs. 4,831,712/-. In the computation of income they assessee has added back the depreciation under the companies act of Rs. 4,793,682/- against the said expenditure of Rs. 4,831,712 and the balance amount of Rs. 30 8030/- and depreciation as per the income tax act of Rs. 12,201,055/- totaling to Rs. 12,239,085 was sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 544,698 compared to the previous year. As the assessee has not furnished any information with respect to the above sum and no confirmation has furnished, he found that the above sum is required to be added under section 68 of the income tax act as unexplained cash credit. He made such addition. Accordingly the assessment order under section 143 (3) of the act was passed on 18/3/2014 determining total income of the assessee at Rs. 41,506,670 against the returned loss of Rs. 12,239,085/-. 06. Aggrieved with the assessment order, appeal was preferred before the learned CIT - A which was disposed of per order dated 19/12/2016. The learned CIT - A considered claim of depreciation under section 32 of the income tax act but rejected it for the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... andal fertiliser. With respect to the addition made under section 68 of the income tax act he referred to the annual accounts of the company for the year. He referred to the balance sheet and submitted that as per shareholder funds the capital as on 31/3/2010 is Rs. 49,90,800 and the same capital remained as at 31/3/2011. He further submitted that in case of the membership fees as on 31/3/2010 Rs. 46,434,698/- is the opening balance which also remained as on 31/3/2011. Therefore according to him when there is no new credit appearing in the balance sheet, the provisions of section 68 of the income tax act does not apply. He submits that the above sums are outstanding in the books of the company for last several years. To show this fact he re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings the assessee did not appear before the learned assessing officer despite issue of several notices. Even the notices for non-compliance were also issued. However on appeal before the learned CIT - A assessee made submissions which were considered. 10. There are only to substantive issues in this appeal. As per ground number 2 and 3 assessee has challenged the disallowance of depreciation under section 32 of the income tax act of Rs. 4,793,682/-. By ground number 4 - 7 assessee has challenged the addition of Rs. 41,544,689 towards unexplained sale application money. 11. On the first issue of the depreciation it is apparent that assessee has claimed depreciation of Rs. 12,201,055 during the year. The details of the depreciation is st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee. Further before the learned CIT - A assessee has raised several legal contentions, none of those decisions were considered by the learned CIT - A. The learned CIT - A merely referred to the notes to the accounts and confirmed the disallowance of depreciation. However as assessee did not get any opportunity of explanation before the learned assessing officer who passed an assessment order is assessee did not furnish details before him, in the interest of justice, we set-aside this issue back to the file of the learned assessing officer with a direction to the assessee to prove that in absence of any business activity carried on by the assessee, how the assessee is entitled to claim of depreciation under section 32 (1) of the act. The lear ..... X X X X Extracts X X X X X X X X Extracts X X X X
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