SAMPAT DEVI PATAWARI,RAJASTHAN vs. I.T.O., WARD - 45(4), KOLKATA, KOLKATA

Though the assessee has taken four grounds of appeal, but her solitary grievance is that the Revenue Authorities have disallowed the depreciation partly.

Brief facts of the case are that the assessee has filed her return of income electronically on 26.08.2016 declaring total income of Rs.13,44,080/-. The case of the assessee was selected for scrutiny assessment and a notice under section 143(2) was issued and served upon the assessee. The ld. Assessing Officer has issued a show-cause notice on the ground that six number of machineries , which were purchased from 4th November, 2015 upto 26th November, 2016 could not be put to use because date of installation is not available and accordingly in his opinion, these machineries do not qualify for grant of depreciation. He issued a show-cause notice, which is available on page no. 2 of the assessment order. The ld. Assessing Officer after confronting the assessee with the date of purchase and value of machinery has observed that why depreciation debited to the tune of Rs.1,05,274/- and Rs.1,87,156/- on account of machineries and buildings should be disallowed to the assessee. The assessee failed to submit the details, hence he disallowed the above amounts and A.Y. 2016-2017 Sampat Devi Patawari made the addition of Rs.2,92,430/-. The assessee has submitted detailed written submission but without examining them analytically, ld. CIT(Appeals) has upheld the disallowance. In the concluding lines, the ld. 1st Appellate Authority has observed that certain machineries had been put to use only just for five days from the close of the year and this is not probable to use them. In this way, ld. CIT(Appeals) has confirmed the disallowance of depreciation.

Ld. Counsel for the assessee has filed a paper book running into 58 pages. He submitted that items of machineries on which depreciation has been claimed, are not required to be installed independently. He pointed out that total addition to the plant & machinery from 01.10.2015 to 31.03.2016, on which depreciation was claimed, was Rs.20,22,395/-, out of which assessee itself not included the sum of Rs.3,06,000/- while working out the depreciation. The ld. Assessing Officer has excluded only Rs.10,97,650/- out of total plant & machinery having value of Rs.17,16,395/-. In other words, there are three components- (a) machinery of Rs.3,06,000/-: the assessee did not claim depreciation; (b) Rs.17,16,395/-: assessee claimed depreciation; (c) Ld. Assessing Officer excluded only Rs.10,97,650/- and allowed the 3 A.Y. 2016-2017 Sampat Devi Patawari depreciation on Rs.6,18,745/- (Rs.17,16,395/- minus Rs.10,97,650/-)

Ld. Counsel for the assessee submitted that these are the machineries, which cannot operate independently. Thus on certain parts, ld. Assessing Officer has granted depreciation but selectively disallowed the depreciation on certain machineries, which combined together would form a single machinery to give rise the production. It has also been brought to our notice that the assessee has generated the products, which have been sold and this aspect has not been doubted by the Revenue Authorities while accepting computation of income at Rs.13,44,080/- in the self- assessment. Thus we are of the view that the Revenue Authorities have disallowed the depreciation partly without deeply analysing the complete details. Therefore, we delete the disallowance and allow the appeal of the assessee.

In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on May 23, 2023.