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Income Tax Appellate Tribunal, “ A ” BENCH, AHMEDABAD
Before: SHRI KUL BHARAT & SHRI WASEEM AHMED
आदेश / O R D E R
PER SHRI KUL BHARAT, JUDICIAL MEMBER :
The Assessee is in appeal before us against the order of Ld.Commissioner of Income Tax(Appeals)-2, Ahmedabad [‘CIT(A)’ in short] dated 24/01/2017 passed for Assessment Year (AY) 2013-14.
The assessee has raised the following grounds of appeal:
Vasani Polymers Pvt.Ltd. vs. ITO Asst.Year – 2013-14 - 2 -
1. The Ld. CIT(A) has erred in confirming the disallowance of deprecation of Rs. 11,27,819/- out of total deprecation ( including additional deprecation ) disallowed by A.O. of Rs 95,23,459/- claimed on purchase of Plant and machineries for the year under consideration. It is submitted that the entire plant and machineries have been put to use as well as commercial production was started on or before 31st March 2013 only and thus depreciation claimed by the Appellant on whole addition of Plant & Machinery ought to have been granted. On the facts and Circumstances, Your Appellant has correctly claimed normal as well as additional depreciation total amounting to Rs 95,23,459/- as per the provisions of the Act and the same be allowed accordingly. It may held so now and the addition of Rs 11,27,819/- be deleted.
2. The Ld. CIT(A) has erred in confirming the contention of A.O. that the machines purchased in second phase i.e. on 30.3.2013 cannot be installed and used on 31.3.2013, which is not at all correct. It is submitted that the machineries purchased and installed on 30.3.2013 was put to use during the previous year only by the Appellant company, which cannot be doubted without any adverse remark or observation. Therefore it is prayed that disallowance confirmed by Ld. CIT(A) of Rs. 11,27,819/- being illegal and unlawful, deserves to be deleted.
3. The Ld. CIT(A) has erred in confirming the consequential addition of Rs 50,000/- out of total expenditures incurred of Rs. 3,46,760/- on account of electricity, transport, labour expense treating the same as preoperative in nature. It is submitted that the assessee has already capitalized the expenditure of Rs 43,58,934/- till the date the machineries had been put to use and the expenses of Rs 3,46,760/- have been incurred only and only after the machineries have been installed and put to use during the previous year and thus the same has been correctly claimed as revenue expenditure u/s.37 of the Act. Therefore the same be held now and consequential addition of Rs.50,000/- be deleted.
Vasani Polymers Pvt.Ltd. vs. ITO Asst.Year – 2013-14 - 3 - 4. The order passed by the Ld. CIT(A) is bad in law and contrary to the provisions of law and facts. It is submitted that the same be held so now. 5. Your appellant craves leave to add, alter and/or to amend all or any of the grounds before the final hearing.
Ground No.1 & 2 are inter-connected. Briefly stated facts giving rise to the appeal are that the case of the assessee was picked up for scrutiny assessment and the assessment u/s.143(3) of the Income Tax Act,1961 (hereinafter referred to as “the Act”) was framed vide order dated 17/11/2015. While framing the assessment, the Assessing Officer disallowed the claim of additional depreciation amounting to Rs.95,23,459/- on the ground that the machines were not put to use before 31/03/2013. The Assessing Officer also made addition on account of disallowance of preoperative expenses of Rs.3,46,760/-. Hence, the Assessing Officer assessed income at Rs.40,03,600/- against the income disclosed at NIL by the assessee.
The assessee being aggrieved by the assessment order, preferred an appeal before the ld.CIT(A), who after considering the submissions of the assessee dismissed the appeal and confirmed the assessment order. Aggrieved by the order of the ld.CIT(A), now the assessee is further in appeal before us.
Vasani Polymers Pvt.Ltd. vs. ITO Asst.Year – 2013-14 - 4 - 5. During the course of hearing, ld.counsel for the assessee filed an application under Rule 29 of the Income Tax (Appellate Tribunal) rules, 1963 submitting therein that the assessee had filed paper-book and page Nos.33 to 40 of the paper-book could not be filed before the authorities below. He further submitted that these evidences go to root of the issue in appeal. If these evidences are considered, in that event, the claim made by the assessee for depreciation would become allowable.
The Ld.DR opposed the submissions of the ld.counsel for the assessee and supported the orders of the authorities below.
We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. Both the authorities below have rejected the claim purely on the basis that the machines were not put to use prior to 31/03/2013. Therefore, the depreciation and additional depreciation on plant & machinery for the Financial Year 2012-13 relevant to Asstt.Year 2013-14 cannot be ruled out. We have perused the evidences filed by the assessee. After considering the totality of the facts of the case, we deem it proper and in the interest of justice, that the evidences need to be verified at the end of the Assessing Officer. Therefore, we set aside the orders of the authorities below and restore the issue back to the file of the Assessing Officer for decision afresh in accordance with law. The Assessing
Vasani Polymers Pvt.Ltd. vs. ITO Asst.Year – 2013-14 - 5 - Officer would verify the claim of the assessee and decide the issue after providing reasonable opportunity of being heard to the assessee. This ground of ground assessee’s appeal is allowed for statistical purposes.
Ground No.3 is against confirmation of consequential addition of Rs.50,000/- out of total expenditure incurred of Rs.3,46,760/-.
Since we have set aside the issue to the file of Assessing Officer in respect of claim of the depreciation, the Assessing Officer would also verify the expenditure incurred by the assessee and accordingly decide this ground also.
Ground Nos.4 & 5 are general in nature which require no independent adjudication.
In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the Court on 27th August-2019 at Ahmedabad.