MAHADHAN AGRITECH LIMITED (FORMERLY KNOWN AS SMARTECHEM TECHNOLOGIES LTD ) ,MUMBAI vs. COMMISSIONER OF INCOME TAX (APPEALS)-50, MUMBAI

That on the CIT(Appeals) additions of inflated capit the normal pr 4. That on the CIT(Appeals) disallowance total income u 5. That on the CIT (Appeals) disallowance subsidiary co normal provis 6. That on the CIT(Appeals) addition of d assets while c 7. That on the CIT (Appeals) the addition expenditure w 2. The briefly sated f filed its return of inc gross total income processed under Sec selected for scrutiny assessment, on 22. computation of inco enhanced claim of d The assessee asserte scheme of amalgam Mahadhan Agritec Sma e facts and in the circumstances of the c was not justified and grossly erred in con undisclosed income us 69A on account tal expenditure while computing total inc rovisions of the Act. e facts and in the circumstances of the ca was not justified and grossly erred in con of provision for doubtful debts while under the normal provisions of the Act. e facts and in the circumstances of the ca ) was not justified and grossly erred in of notional interest on investments m ompany while computing total income sions of the Act. e facts and in the circumstances of the c was not justified and grossly erred in depreciation on goodwill and/or other computing book profit u/s 115JB of the A e facts and in the circumstances of the ca ) was not justified and grossly erred in of depreciation on the alleged infla while computing book profit u/s 115JB of facts of the case are that the ass come electronically on 30.11.20 of Rs. 4,25,66,100/-. Said re ction 143(1) Act. Subsequently y assessment. During the cou 12.2017, the assessee submit ome along with a revised retu depreciation, including on good ed that such revision was neces mation involving the ‘Technic h Ltd. (Formerly known as artchem Technologies Ltd.) 3 case, the Ld nfirming the t of alleged come under ase, the Ld. nfirming the computing ase, the Ld. n confirming made in the under the case, the Ld confirming r intangible Act. ase, the Ld. n confirming ted capital f the Act. sessee originally 015, declaring a eturn was duly y, the case was urse of scrutiny tted a modified urn, wherein an will, was made. ssitated due to a cal Ammonium

The ground No relates to the validit addition of depreciat capital expenditure a The assessee is main been found qua the under consideration could have been mad consideration. This c each addition/ disallo 4.1 The assessee a claim for deduction o in response to notice the claim of depreci doubtful debts are no 4.2 In ground No. 2 depreciation on good has challenged add inflated capital expen has challenged disa merit. In view of abo of each addition/disa Mahadhan Agritec Sma os. 1(a) to 1(e) of the appeal ty of the reassessment assailed tion and provision for doubtful and interest on delayed payme nly agitated that no incriminatin additions/disallowance made and being non abated assessm de in the case of the assessee for claims of assessee, need to be owance, which has been dispute also made an alternative praye or allowance could be made in e under section 153A of the Ac iation on intangible assets an ot tenable 2, the assessee has challenged dwill on merit. In ground No. dition of undisclosed income nditure on merit. In ground No. allowance of provision for dou ve, we are adjudicating the gro allowance. h Ltd. (Formerly known as artchem Technologies Ltd.) 6 of the assessee d in relation to l debts, inflated ent of the TDS. ng material had during the year ent, no addition r the year under e examined qua ed before us. r that no fresh the return filed ct and therefore nd provision for disallowance of 3, the assessee on account of 3, the assessee ubtful debts on ounds in respect

1 Firstly, we are on intangibles inclu in dispute are that i as under are involved (a) First entity is M Corporation Ltd. (in public company lim 31/05/1979, having of the ‘Deepak Fertili rest 49.01% shares a at three prominent v (ii) Technical Ammo (b) The second enti ‘Fertichem’) is an un incorporated on 10/1 (address same as ‘De with its nominees ‘Fertichem’. The com trading of fertilizers, p (c ) The third entity i Technologies Ltd. i which was incorpora Village Ponnada, And Mahadhan Agritec Sma taking issue of disallowance o uding goodwill. The facts in bri n transactions of amalgamation d: M/s Deepak Fertilizers and P n short ‘Deepak Fertilizers’), w mited by shares, and was in its registered office at Pune. 50 izers’ are held by its promoters are held by others. The compan verticals, namely (i) industrial c onium Nitrate (“TAN”) and (iii) F ity namely M/s SCM Fertichem nlisted public company limited 10/2012 having its registered of eepak Fertilizers’). The Deepak F holds the entire equity sh mpany was engaged in man petroleum and their byproducts involved in the transaction is M i.e. the assessee ( in short th ated on 21/01/1987 having reg dhra Pradesh, which was chan h Ltd. (Formerly known as artchem Technologies Ltd.) 7 of depreciation ef qua the issue n, three entities Pertochemicals which is a listed ncorporated on 0.99% in shares s and group and ny was operating chemicals (“IC”), Fertilizers. m Ltd ( in short by shares was ffice at Pune i.e. Fertilizers’ along hare capital of nufacturing and s. M/s Smartchem e ‘Smartchem’), gistered office at ged to the state of Maharastra, for juri iction of the fertilisers along with ‘Smartchem’. 4.2 M/s Deepak F entered into a schem business and Techno in two stages. The Company Law Tribu with effective/appoin 4.3 In first stage, M ‘fertilizer undertaking ‘Fertichem’)’ under a value (WDV) w.e.f. 0 Rs.743 crores, again equity shares of Rs.1 4.4 In second stag fertilizer undertaking at fair market valu scheme. Against the assessee) allotted eq (i.e. Deepak Fertilizer above fair market Mahadhan Agritec Sma filing a scheme of arrangem Hon’ble Bombay High Court its nominees hold entire equity Fertilizers and Smartchem i.e me of arrangement for transferrin ology Ammonium Nitrate (TAN)’ e scheme got sanction of H unal ( NCLT), Mumbai Bench o nted date of 1/1/2015. M/s Deepak Fertilizers transfe gs’ to ‘M/s SCM Fertichem Pvt a slump sale/exchange at boo 01.01.2015, for a lump sum c nst which ‘Fertichem’ issued cer 0 each to ‘Deepak Fertilizer’. ge ‘Fertichem’ demerged/transf g to Smartchem’ i.e. assessee w uation of Rs. 2517 Crores u e said demerger/transfer ‘Smar quity shares to the shareholder rs) as per share entitlement rat value of Rs.2517 crores d h Ltd. (Formerly known as artchem Technologies Ltd.) 8 ment within the t. The Deepak share capital of e. the assessee ng the ‘Fertilizer to the assessee on’ble National on 30/03/2017 erred ‘TAN’ and t. Ltd. (in short k written down consideration of rtain number of ferred TAN and w.e.f. 01.01.2015 under demerger rtchem’ (i.e. the rs of ‘Fertichem’ io of 1:1. Out of determined, the ‘intangible asset’ i Rs.1777,73,12,360/- 4.5 Pursuant to the three entities were Consequently, no tra from ‘Deepak Fertili transfer of same unit intangibles at Rs.177 account of the asses was claimed. 4.6 In this arrang transferred by way Rs.743 crores and transferred by way o determining fair ma justified the two step of complexity and claimed depreciation assessee by way of th 4.7 But the Assessi found during the cou Debashish Banergee Mehta, Chairman of Mahadhan Agritec Sma in the form of goodwill w - . NCLT order, the books of acc revised from appointed date i ansfer of intangibles under slum izers’ to ‘Fertichem’ was reco t via demeger from ‘Fertichem’ 77,73,12,360/- was recorded ssee and depreciation on the i gement, the ‘TAN’ and ‘fertili of a slump sale/ exchange to on the same day the same of demerger to Samrtchem i.e. arket value at Rs.2517 crores p transfer of TAN and Fertilizer Stock Exchange Regulations. on the intangibles created in t he acquisition of the demerged e ng Officer referred to an e-mail urse of search action, which wa e, Vice President(Finance) and M/s Deepak Fertilizers, and ob h Ltd. (Formerly known as artchem Technologies Ltd.) 9 was valued at count of all the i.e. 1/01/2015. mp sale on unit orded , but on to ‘Smartchem’, in the books of intangible asset izer’ unit were o ‘Fertichem’ at e business was the assessee by s. The assessee division in view . The assessee the hands of the entity. communication as between Shri Shri Sailesh C bserved that two stage transfer of the the profits of the uni of the search team t books of accounts b was nothing but a subsequently questio various management during the course of promoter group CM President(corporate explain the purpose behind the alleged sc real motive/intent of group concern in car sale and demerger of taxes because the b management also re The transfer was on question of restruc According to the Asse M/s Sharp and Tann it was based on the noted that e-mail c clearly demonstrated Mahadhan Agritec Sma business was carried out for it. The Assessing Officer referred hat the goodwill created by the by way of scheme of slump sale scheme devised to evade the ons were put up by the searc t personals of the Group. Accor the search statement of Shri S MD and Shri Supas Jain, finance) was recorded , but e of scheme of arrangement a cheme of restructuring. In view f the Deepak Fertilizers, the a rrying two steps arrangement b f fertilizer and TAN business wa usiness was retained with the emained same even after trans nly on the papers and hence cturing business for effective essing Officer, the valuation don non was also not based on real e fabricated projections. The A communication by Shri Debas d the intent of the scheme for r h Ltd. (Formerly known as artchem Technologies Ltd.) 10 avoiding tax on d to observation e assessee in its e and demerger e taxes, hence, ch team to the rding to the AO, Sailesh C. Mehta Associate Vice t they failed to and real intent w of the AO, the assessee and its by way of slump as only to avoid promoters and sfer of the unit. e there was no e management. ne by the valuer projections and ssessing Officer shish Banergee reducing the tax liabilities of the grou that scheme of slum NCLT, Mumbai and objections before the amalgamation or de nothing contrary ha search. However, the facts regarding the scheme was not befor 4.8 During the app assessee contented t the depreciation on t scheme of slump sal public domain and o made during the co incriminating materi Ld. CIT(A) however is on the basis of the course of the origin course of the search course of the search was a sham transact by evading taxes and found qua the additi Mahadhan Agritec Sma up. The assessee on the other mp sale and demerger was ap d the Assessing Officer has e NCLT. It was submitted tha emerger are available in publ as been unearthed during the e Assessing Officer was of the v tax implications and the rea re the Hon’ble NCLT. pellate proceedings before the that no incriminating material the goodwill as all the documen le and demerger were already only statement or questions an ourse of the search proceedin al found during the course of s of the opinion that the assess documents which were not p nal assessment proceedings an h. According to him it was reve h that entire scheme of busine tion with the only intent to defra d therefore the facts of incrimi ion in dispute during the cours h Ltd. (Formerly known as artchem Technologies Ltd.) 11 hand contented pproved by the not raised any at documents of lic domain and e course of the view that entire al intent of the Ld. CIT(A), the was found qua nts in respect of available in the nd answer were gs without any the search. The ment was made produced in the nd found in the ealed during the ss arrangement aud the revenue inating material se of the search was established. The of the assessee that issue in dispute. submissions made b no incriminating ma on intangibles inclu relied on the findin submitted that the e revealed the real in which is a material in of the ‘e-mail commu has been reproduce assessment order. 4.9 The Ld. counsel prayer and submitt proceedings under s depreciation, is not 153A of the Act. He r the Tribunal in the 1717 to 1720/Hyd/ year 2009-10 to 20 fresh claim could ha response to notice u/ claim of depreciation Mahadhan Agritec Sma

11 The Special B unabated/completed in the return of inco Act for the first time conducted on 15.11 2018-19 to 2013-14 period assessment u assessment year 201 prior to the date o pending as on the under consideration In such circumstance goodwill/intangible c assessee is permitte grounds are rendered 5. The ground No provision of the dou counsel for the asse return of income for Mahadhan Agritec Sma can be made unde VI-A of the Income 1961, for the first the return of inc in response to th issued u/s 153A o pursuant to a conducted under 132 of the Act. Bench has made it clear th assessment, no fresh claim can me filed in response to notice u . Since in the instant case also 1.2018 and therefore, the ass were six assessment years rel u/s 143(3) of the Act. The 5-16 was already completed on of the search, therefore, no a date of the search and the a falls in the category of ‘unabat es, no fresh claim in respect of could have been entertained, ed to withdraw said claim an d infructuous. o. 4 of the appeal relates to btful debt amounting to Rs.30 essee submitted that while fili computing the total income u/ h Ltd. (Formerly known as artchem Technologies Ltd.) 15 er chapter e Tax Act, t time, in come filed he notice of the Act, Search r section hat in case of n be entertained u/s 153A of the the search was sessment years levant to search assessment for n 13.07.2017 i.e. assessment was assessment year ted assessment’. depreciation on accordingly the nd the relevant disallowance of 0 lakhs. The Ld. ing the original /s 115JB of the Act, provision for d added to the book pr income under the no that assessee had no under the normal become bad debt an the same. The asses for allowing the said submitted that this c income filed and ther claim in the return fi The ld DR did not obj the assessee for not of return of bad deb section 153A of the A 5.1 We have had riv relevant material on provision for doubtfu arguments of the lear assessee being a fres 153A of the Act is no the ground of the as material qua the issu the ld counsel for ass Mahadhan Agritec Sma doubtful debt amounting to Rs rofit but same was not added w ormal provisions of the Act. It ot disallowed the same while com provisions as same was high nd thus assessee company had ssee claimed in 153A assessme claim as bed debt written off. T claim was also not made in the r refore, assessee is not eligible f filed in response to notice u/s 1 ject to the arguments of the lear pressing this ground for the re bt being a fresh claim made i Act, was not permitted in law. val submissions of the parties a n record qua the issue of d ul debt amounting to ₹ 30 lakhs rned counsel for assessee that t sh claim made in the return file ot permitted in law, we are not ssessee challenging existence o ue in dispute. We agree with the sessee, that the claim for provis h Ltd. (Formerly known as artchem Technologies Ltd.) 16 s.30 lakhs was while computing was submitted mputing income hly probable to d not disallowed ent proceedings The Ld. counsel regular return of for making fresh 153A of the Act. rned counsel for eason that claim in return under and perused the disallowance of s. In view of the this claim of the ed under section adjudicating on of incriminating e contentions of sion for bad and doubtful debt turned the return of income fresh claim. Therefo Special Bench in the claim of the assessee entertained and acco the said claim. The g ground Nos. 1(a) to infructuous. 6. In relation to gr there was no incrim capital expenditure. (DR) referred to the fi to various ‘whatsApp of Shri Pandurang La 6.1 The facts in br course of the search found from the mobil including Shri Pand Sailesh Mehta, wher ‘Deepak Fertilizers’ g employees of the ass recorded on oath u/ Mahadhan Agritec Sma d into debt written off is not tena e filed under section 153A of t ore, respectfully, following the e case of SEW Infrastructure L e for provision for doubtful debt ordingly the assessee is permitt ground No 4 of the appeal and 1(c) of assessee are according round No. 1 (d), the Ld. counsel minating material qua the addi However, the Ld. Departmental inding of the Ld. CIT(A) wherein p’ messages found from the mo andge (President Projects). rief qua issue in dispute are t assessment various ‘whatsapp le instruments of the employees durang Landge (President Proj rein movement of unaccounted group entities and suppliers w essee Shri Pandurang Landge i s 153A of the Act on 19.11.20 h Ltd. (Formerly known as artchem Technologies Ltd.) 17 able for claim in the Act, being a finding of the Ltd. (supra), the t also cannot be ted to withdraw relevant part of gly dismissed as l submitted that ition of inflated l Representative n he has referred obile instrument that during the ’ messages were s of the assessee jects) and Shri d cash between were found. The in his statement 18 admitted the cash transactions an Fertilizer group had cash was generated b entities namely M/s Construction Pvt. Ltd is reproduced as und “5.12 It is c during the co booked inflate Co. Pvt. Ltd. a 5.13 Evidenc data etc. wer and survey o detail as unde 5.14 It is seen 132 at Deepa the Act, Shri involved in expenditure f messages com the Mobile ba communicatio arrange cash Sailesh Mehta 5.15 The con found in pho Mehta which Mehta and S explained in been confirme 5.16 It is clea the course of has booked back the mon the books of a Mahadhan Agritec Sma nd therefore Shri Sailesh Mehta also confirmed the generation by way of inflating capital expen Onshore Construction Compan d. The relevant finding of the A der: clear from the above facts and evidenc ourse of search proceedings that the com ed capital expenditure with Onshore Co and Ray Construction Ltd. ces in form of documents, mobile data, re seized/ impounded during the course operation on Deepak Group. They are an er: - n that during the course of Search Procee ak Group. In the statement recorded u/s i Pandurang Landge has admitted tha the transactions of booking of inflate for Deepak Group. The same is explain mmunication which were found and Se ackup of Shri Pandurang Landge. On peru on, it is seen that Shri Pandurang La h from above said 4 parties on behalf a and the assessee company. nversation between Shri Pandurang Lan one of Shri Pandurang Landge and Sh h reflected the transfers of cash to Sh Shri Deepak Desai. Same messages h detail by Shri Pandurang Landge and ed by Shri Sailesh Mehta. ar from the above facts and evidences fou f search proceedings that the assessee inflated capital expenditure which has ney in cash. The said cash has not been re accounts to expend out of books cash tran h Ltd. (Formerly known as artchem Technologies Ltd.) 18 CMD of Deepak n of cash. This nditure with two ny and M/s Ray Assessing Officer ces found mpany has onstruction computer of search nalyzed in edings u/s s 132(4) of at he was ed capital ned in the eized from usal to the andge has lf of CMD ndge were hri Sailesh hri Naresh have been same has und during company s returned ecorded in nsactions.

20 The se messages as inflated capit same has bee by the assess cash received accounts at th the income of partakes of th and is therefo the accepted recorded u/s officer and ha 132(4) of Inco all the Key Pe the document evidence.” 6.2. Before the ld C no incriminating mat ld CIT(A) rejected th finding of the Ld. CIT “8.4 During messages fro President Pro handling cash In the answe that Shri Nar cash on beha 22 he explain in answer to means Rs. confirmation f has written " 6.7cr was ha Mehta as per question no generation w with the contr cash. In the stated that amount of Rs Mahadhan Agritec Sma eized documents and data backup mentioned above in detailed speaks of b tal expenditure by the assessee compan en received back in cash. Also, the money see in cash is outside the books of accou d by the assessee company outside the he time of booking of capital expenditure f the assessee. The cash received by the he character of commercial receipts of the fore, liable to be assessed as income ac principle of commercial accounting. The 132(4) is validly recorded statement by a as evidentiary value. The statement reco ome Tax Act, 1961 of Shri Sailesh Mehta ( ersonnel's of Deepak group are fully sup t sized and data back of mobile phones CIT(A) , the assessee challenged terial qua the issue of capital e he contention of the assessee T(A) is reproduced as under: the search proceedings, from the wh om the mobile of Shri Pandurang L ojects), it was found that he was indu h transactions for the Deepak Group Comp er to question no 21 Shri Landge has ac resh Mehta and Shri Deepak Desai han alf of the company. In the answer to ques ned the meaning of "Drawing" means 1 l o question no 23 he explained "Contri ler in cash. He has admitted tha from Mahesh Agrahara, Commercial H "6.7 contribution done" means that cash anded over either to Deepak Desai or r the instruction of the CMD. In the ans 25 he has explained the source of which is from the extra work claims set ractors. The amount of extra work is retu answer to question no 28 he has spec amount of 200 against Onshore mea s. 200 lacs or 2cr taken in cash from O h Ltd. (Formerly known as artchem Technologies Ltd.) 20 of mobile booking of y and the y received unts. Thus, e books of e becomes e assessee e assessee ccording to statement authorized orded u/s (CMD) and pported by i.e. digital d that there was expenditure, but e. The relevant hatsapp Landge( ulged in mpanies. ccepted ndle the stion no lac and ibution" at after Head he h of Rs. Naresh swer to of cash ttlement urned in cifically ans an Onshore

3 The su considered. H The interest liabilities and expenditure. F and exclusiv therefore, the the Act. Thus 2,42,966/- is Penalty proce Tax Act, 19 inaccurate pa 7.1 We have heard r relevant material on assessee submitted disallowance of inte during the course of referred to Schedule reference of any inc This assessment year without the aid of in Supreme Court in Ab 1(e) of the appeal is a 8. The ground No. 5( notional interest exp company amounting 8.1 We have heard the relevant materia Mahadhan Agritec Sma bmission of the assessee has duly However, the same is not found to be acce is paid for default in respect to st d this interest cannot be treated as bu Further, interest on TDS has not incurred vely for the purpose of the busines same is not allowable as deduction u/s 3 s, interest paid on delay payment of TDS hereby disallowed u/s.37(1) of the Act. eedings u/s 271(1)(C) of the Income Tax 961 are initiated separately for fur articular of income.” rival submission of the parties a n record. Before us the ld C no incriminating material qu rest on delayed payment of T f search action and the Assess of the Tax Auditor Report(TAR riminating material qua the is r being unabated, no addition c ncrimination material as held bhisar Buildwell P ltd (supra). T accordingly allowed. (five) of the appeal is related to penditure on investment made to ₹ 62. 59 lakhs. rival submissions of the parti al qua the issue in dispute. W h Ltd. (Formerly known as artchem Technologies Ltd.) 25 y been eptable. tatutory usiness d wholly ss and 37(1) of S of Rs. Income rnishing and perused the Counsel for the ua the qua the TDS was found sing Officer has R). There is no ssue in dispute. could have made by the hon’ble The ground Nos. disallowance of e in subsidiary ies and perused e find that this disallowance has be passed under sectio addition is still pendi addition has been m passed under sectio adjudicated in the order and consequ computation of the in issue pertains to o required to adjudica proceeding under sec appeal of the assesse 9. The ground No under MAT provision asset and deprecia computing book profi the claim of deprecia observing as under: “16.3 I hav submission of that, the add 11SJB is in g the AO has n assessment p 16.3.2 Dur opportunities written subm Mahadhan Agritec Sma een made in the original ass on 143(3) of the Act and appe ing before the Ld First Appellate erely repeated in the instant as on 153A of the Act. Therefor appeal filed against the origin uential effect would only b ncome under section 153A of th original assessment proceedin te the issue in dispute in appe ction 153A of the Act. The groun ee is accordingly dismissed as in os. 6 and 7 of the appeal rela ns for addition of depreciation o ation of inflated capital exp fit u/s 115JB of the Act. The Ld ation on intangible assets under ve considered the assessment orde of the appellant. The appellant has con dition made while computing book pro gross violation of principle of natural jus ot given any opportunity to the appellant proceedings regarding this adjustment. ring the appeal proceedings, ad have been given to the appellant to f issions. Thus, natural justice has been p h Ltd. (Formerly known as artchem Technologies Ltd.) 26 sessment order eal against said e Authority. This ssessment order re it has to be nal assessment be given while he Act. Since the ng, we are not eal arising from nd No. five of the nfructuous. ated to addition n the intangible penditure while d. CIT(A) rejected r the book profit er and ntended ofit u/s stice as t during dequate furnish rovided to the appel grievance has 16.3.3 In this decision of h Assessing Officer has under: “17.4 As area no 2, the app inflating the have already this ground. T Mahadhan Agritec Sma llant during the appeal proceedings a s been redressed s regard, the appellant mainly relying hon'ble Supreme Court in case of Apollo IT has contended that the AD cannot dist nd has no juri iction to go behind the ne e profit and loss account, except to the he explanation to section 115JB. e considered the contention of the appell ussed above, the appellant has debit on artificially created intangible ass ump sale and demerger. It is already he of arrangement of transfer of asset vice with the only intent to evade the t the depreciation claimed on goodwi set is disallowed. ause (lia) of explanation 1 to section 115 needs to be reduced by the amo debited to the statement of profit an uding the depreciation on account of reva Hence, as per the clause (iia) only all needs to be adjusted for computing book tion on intangible assets is due to revalua s the depreciation claimed on the int sallowed, the same needs to be adjus he book profit. Hence, the action of e book profit by the depreciation disaalo tangible asset is confirmed. Accordingly, d is DISMISSED.” depreciation pertaining to i computing book profit disa s been sustained by the Ld. CIT ady discussed in details while deciding pellant company was found to be indu capital expenses related to the two pa y confirmed the additions made by the Thus to the extent of cash component, the h Ltd. (Formerly known as artchem Technologies Ltd.) 27 and the on the o Tyres turb the et profit e extent lant. As ted the sets on eld that t is a tax and ill and JB, the ount of nd loss aluation lowable k profit. ation of tangible sted to AO in wed on appeal inflated capital allowed by the T(A) observing as ground ulged in arties. I A.O on e capital expenditure h pertaining to s computing the the bogus exp position. Hen depreciation p purpose of co Accordingly th 9.2 We have heard the relevant materia grounds raised is w otherwise than adjus Act is permissible. A concerned, same was basis of which book of income. The book return in response t same as was declar therefore this also be entertained following Tribunal in the case o 9.3 As far as dep concerned, the provis depreciation claimed thereafter reducing account excluding t assets. There is no p Mahadhan Agritec Sma has been inflated. Accordingly the depre seuch expenditure needs to be disallowe e book profit. While computing the book penditure has to be adjusted to reflect the nce, the A.O is correct to add ba pertaining to bogus capital expenditure omputing book profit us 115JB of the he appeal on this ground is DISMISSED. rival submissions of the parti als on record. The issue in whether any adjustment to t stment prescribed under sectio As far as claim of depreciation s not available in the books of a profit was declared while filing profit which has been declared to notice under section 153A o red while filing original return eing in the nature of a fresh cla g the decision of the special of M/s SEW infrastructure Ltd ( preciation on inflated capital sions of section 115JB provides d as per companies Act to the the depreciation debited in he depreciation on account of provision under the section 115J h Ltd. (Formerly known as artchem Technologies Ltd.) 28 eciation d while k profit, e correct ack the for the I.T.Act. ” ies and perused dispute in the the book profit on 115JB of the n on goodwill is accounts on the g original return d while filing the f the Act is not of income and aim, it cannot be l bench of the (supra). expenditure is s for adding the book profit and profit and loss f revaluation of JB of the Act to give effect to depr proceedings. Therefo dispute in relation t are set aside. Acco dismissed whereas gr 10. In the result, the Order pronoun (KAVITHA RA JUDICIAL M Mumbai; Dated: 24/02/2025 Dragon Legal/Rahul Sharma, Sr. P.S.