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Income Tax Appellate Tribunal, KOLKATA BENCH ‘B’ AT KOLKATA
Before: SHRI MANISH BORAD, HON’BLE & SHRI SONJOY SARMA, HON’BLE]
IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH ‘B’ AT KOLKATA [BEFORE SHRI MANISH BORAD, HON’BLE ACCOUNTANT MEMBER & SHRI SONJOY SARMA, HON’BLE JUDICIAL MEMBER] Assessment Year: 2009-10 M/s. Reform Chain & Tools (P) Ltd.......................................................................................Appellant 43, Motisil Street, Kolkata – 700 013. [PAN: AADCR 8091 C] Vs ITO, Ward-2(1), Kolkata ..................………………………………………..................................Respondent Appearances by: None appearing on behalf of the Assessee Shri Gautam Mondal, ACIT appearing on behalf of the Revenue: Date of concluding the hearing : May 23, 2022 Date of pronouncing the order : June 06, 2022 ORDER PER SONJOY SARMA, JM:
This is an appeal preferred by the assessee against the order of Ld. CIT(A) – 1, Kolkata dated 18.02.2016 for A.Y. 2009-10.
The assessee raised the following grounds of appeal:
“i. For that the Ld. CIT(A) was not justified in confirming the addition made u/s 40a(ia) to the tune of Rs. 37,52,000/- paid as ‘Rent’ which actually is a judgment debt and not subjected to TDS and thereby making the disallowance is bad in law. ii. For that the Ld. CIT(A) was not justified in upholding disallowance of the depreciation to the tune of Rs. 1,42,76,000/- in respect of assets which were acquired, possessed, used and mortgaged by the company during the year under scrutiny and the disallowance of depreciation is without basis of law. iii. For that the Ld. CIT(A) was not justified in confirming the disallowance of Rs. 3,10,000/- on account of repair and maintenance which is not sustainable in eye of law.”
2 Assessment Year: 2009-10 M/s. Reform Chain & Tools (P) Ltd. 3. This is an old appeal pending for quite some time. Neither the assessee nor its representative appeared before this Tribunal, although from the record it reveals that from time to time notice has been issued upon the assessee. When this matter is called today, none appeared on behalf of the assessee. Ultimately, we have no other option but to decide the appeal on the board with the assistance of ld. DR.
The brief fact of the case is that the assessee-company filed its return of income on 29.09.2009 showing total income of Rs. 4,02,760/-. The return was processed and subsequently it was selected for scrutiny and accordingly notices u/s 143(2) and 142(1) were issued upon the assessee. In response to the same, the ld. AR of the assessee appeared that on verification of the P & L Account, the assessee-company for the assessment year in question claiming expenses of factory rent for Rs. 37,52,000/-. After discussion and going through the various documents, the AO disallowed the rent for Rs. 37,52,200/- and added back to the income of the assessee. Further, the Assessing Officer disallowed the claim of depreciation amounting to Rs. 1,42,76,000/- as the assessee unable to establish essential condition of ownership and accordingly use of plant & machinery for claiming depreciation u/s 32 of the Act and disallowed the depreciation of Rs. 1,42,76,000/-. Further the AO disallowed Rs. 3,10,000/- on account of repair and maintenance since the assessee could not able to submit necessary bills and vouchers and books of accounts were not produced to prove the genuineness of the claim. The assessee dissatisfied with the above order passed by AO and preferred an appeal before the Ld. CIT(A) and Ld. CIT(A) vide order dated 18.02.2016 dismissed the appeal of the assessee.
While going through the material available on record, ground no. 1 raised by the assessee in respect of confirming the addition made u/s 40a(ia) to the tune of Rs. 37,52,000/- paid as rent by the assessee to the judgement debtor and which is not subject to TDS thereby making the disallowance is bad in law. We are of the view that this issue required to be re-examine by the AO and remand back to the file of the AO to decide the issue afresh by giving reasonable opportunity to assessee to submit their claim, if any, at the time of hearing.
While going through issue no. 2 upholding the disallowance of depreciation to the tune of Rs 1,42,76,000/- in respect of assets which were acquired, possessed used and mortgaged by the company during the year under scrutiny and disallowance of depreciation is without basis of law to decide this issue need to be fulfil certain conditions for claiming of depreciation u/s 32 of the Income Tax Act and we are of the view that the disallowance of depreciation of Rs. 1,42,76,000/- by the AO required to be re- examine afresh and remand back this issue to the file of the AO and due opportunity should be given to the assessee to submit its claim before passing such order.
Ground no. 3 relates to disallowance of Rs. 3,10,000/- on account of repair and maintenance which was disallowed by the AO, we are of the considered view that this issue also need to be examine afresh and remand back to the file of the AO to decide the issue and directed the AO to obtain necessary documents from the assessee in support of such claim made by the assessee. It is 4 Assessment Year: 2009-10 M/s. Reform Chain & Tools (P) Ltd. needless to mention here that before passing such order reasonable opportunity should be given to the assessee of being heard.
We in the interest of justice set aside the impugned order and remit it back to the file of AO for deciding the issue raised before us by way of a speaking order.
In the result, the appeal of the assessee is allowed for statistical purpose. Order Pronounced in the Open Court on 6th June, 2022.