SRI. ARUN KUMAR M.B,BANGALORE vs. ITO-WARD-8(3), BANGALORE

All these three appeals were earlier disposed of by the Tribunal by way of a combined Tribunal order dated 23.02.2017 and all these three appeals of the assessee were dismissed. Subsequently, the assessee filed three MPs being MP Nos. 155, 156 &157/Bang/2017 which were disposed of by the Tribunal as per its combined order dated 09.08.2017 and as per this combined Tribunal order in these three MPs, the Tribunal order in was recalled for the limited purpose of deciding ground nos. 1 and 4 raised in this appeal. Hence, in the present proceedings, I am supposed to decide ground nos. 1 and 4 in ITA No. 1419/Bang/2016 but the registry has fixed all the three appeals i.e. ITA Nos. 1417 to 1419/Bang/2016. Since the Tribunal order in respect of ITA Nos. 1417 & 1418/Bang/2016 has not been recalled in the MP to 1419/Bang/2016 Page 2 of 5 order, these two appeals stand dismissed by the earlier Tribunal order dated 23.02.2017 and registry is directed to consign these two appeals to records and I proceed to decide two grounds in ITA No. 1419/Bang/2017. These two grounds read as under. “1. The A.O. was not correct in initiating the proceedings u/s 147 read withsection 148 of the Act, as there was no reason to believe recorded for initiation of reopening proceedings and also mandatory approval from JCIT or such other Higher authority and hence the same is bad in law. 4. The CIT (Appeals) was not correct in considering the full depreciation claimed to the extent of Rs.2,46,414/-, though the Appellant has submitted the bills for additions to Fixed Asset and Disallowed Rs. 1,01,845/- as excess claim of depreciation as was done by A.O.”

In course of hearing, the ld. AR of assessee submitted that ground no. 1 is not pressed and accordingly ground no. 1 in is dismissed as not pressed.

Regarding ground no. 4, he submitted that the assessee claimed depreciation of Rs. 2,46,414/- details of which are available on page no. 49 of the paper book containing the depreciation schedule for the present year. He pointed out that as per this depreciation schedule, there was opening WDV as on 01/04/2008 of Rs. 7,74,859/- including computer of Rs. 1,32,000/-, Furniture & Fixture of Rs. 6,21,184/- and Motor Cycle of Rs. 21,675/-. Thereafter, he pointed out that during the present year, there was addition in computer of Rs. 1,05,995/- before 30.09.2008 and Rs. 62,830/- after 30.09.2008 and there was addition of Rs. 5,500/- in Furniture & Fixture after 30.09.2008. Thereafter he pointed out that as per the assessment order, the AO allowed depreciation on the opening WDV of Rs. 7,74,859/- as depreciation allowed by her is Rs. 1,44,569/- and she disallowed the depreciation claimed to the extent of Rs. 1,01,845/- in respect of the additions made by the assessee in the present year on this basis that the actual depreciation as per computation furnished in the assessment order is only Rs. 1,44,569/-. He further submitted that when the assessee carried the matter in appeal before CIT(A), it is held by CIT(A) in para no. 10 of his order that as per the Schedule to Form 3CD, there is no addition to 1419/Bang/2016 Page 3 of 5 to fixed assets in the present year. He submitted that the relevant form 3CD is available on pages 8 to 48 of the paper book and the relevant page is 47 of the paper book and in the same, the auditor has stated that there is no addition to the fixed asset in the present year but he drawn my attention to page no. 44 of paper book containing the details of various items of Balance Sheet and P&L account and pointed out that as per the same, in Sl. No. 14, it is stated that the depreciation as per books of account is Rs. 2,46,414/- in the present year and Rs. 2,70,846/- in the preceding year. He submitted that only because of a typing mistake in Form no. 3CD, the claim of the assessee cannot be rejected. He also submitted that the relevant invoices in respect of purchases of various items in the present year are available on pages 20 to 29 of paper book and therefore, the claim of the assessee should be allowed. The ld. DR of revenue supported the orders of authorities below.

I have considered the rival submissions. I find that the claim of the assessee was rejected by the authorities below on the basis of Form 3CD as per which there is no addition to fixed asset in the present year. But as per the P&L account and Balance Sheet duly audited by the same auditor, the amount of depreciation as per books is Rs. 2,46,414/- and WDV value of assets as on 31.03.2009 is Rs. 7,02,770/- which is tallying with the depreciation schedule available on page no. 10 of the paper book. There is no such comment of the auditor that this P & L Account & balance Sheet is not showing the true & fair view of the Profit/ Loss and Assets of the assessee. The relevant invoices regarding purchase of various items of fixed assets are available in paper book. The page nos. and amounts are as under. Sl. No. Page No. Amount (in Rs.) 1. 20 1,456 2. 21 65,416 3. 22 12,251 4. 23 3,194 5. 24 4,455 6. 25 11,350

The total of addition to fixed assets in the present year as per Depreciation Schedule on page 49 of the paper book is Rs. 194,325/-. Although the amount is not tallying but it cannot be said that there is no addition if the assessee can establish that the concerned asset is actually put to use in the present year. Under these facts, in my considered opinion and in the interest of justice, the matter should go back to the file of AO for fresh decision after examining the complete facts in the present case and if the assessee can establish that various assets were purchased in the present year and they were put to use also then depreciation should be allowed as per law. The AO is directed to pass necessary order as per law in the light of above discussion after providing adequate opportunity of being heard to assessee. Ground no. 4 is allowed for statistical purposes.

In the result, the appeal filed by the assessee for Assessment Year 2009-10 stands partly allowed for statistical purposes.