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Income Tax Appellate Tribunal, BENCH “C”,MUMBAI
Before: SHRI D.KARUNAKAR RAO & SHRI PAWAN SINGH
Assessee by : Sh. S.M. Bandi (AR) Revenue by : Sh. Saurabh Kumar Rai (DR) Date of hearing : 08.12.2016 Date of Pronouncement : 20.01.2017 Order Under Section 254(1) of Income Tax Act PER PAWAN SINGH, JM: 1. The present appeal u/s 253 of the Income-Tax Act filed by assessee is directed against the order of Commissioner of Income-tax (Appeals)–3, Mumbai dated 27.02.2015 for Assessment Year (AY) 2011-12. The assessee has raised single ground of appeal that the ld CIT (A) erred in confirming the disallowance of depreciation of Rs.7,73,602 /- being 50% of eligible depreciation.
2. The brief facts of the case are that Assessee Company is engaged in manufacturing of Pharmaceutical Products. Assessee filed its return of income for relevant Assessment Year on 29th September 2011 declaring total income at Rs. 1,04,04,597/-. The assessment was completed under section 143(3) on 25th February 2014. The Assessing Officer while passing assessment order besides the other addition and disallowance, disallowed 50% of the claim of depreciation out of Rs. 15,47,204/-. On appeal before Commissioner (Appeals) the disallowance was sustained. Aggrieved by the order of Commissioner (Appeals) the assessee filed present appeal before us.
We have heard the learned AR for the assessee and the learned DR for the Revenue and gone through the orders of authorities below. The ld AR of the assessee argued that the ld Commissioner (Appeals) dismissed the appeal of the assessee without considering the documentary evidence filed before him, holding that no evidence was filed before AO to show that the Building had been put to use and the Machine had been installed. No remand report was called by ld CIT(A) on the documentary evidence filed by assessee during the appellate proceedings. On the other hand the ld DR for the Revenue supported the order of authorities below.
We have considered the rival contention of the ld representatives of the parties and the material available on record. The AO while making disallowance concluded that the assessee has not furnished any documentary evidence e.g. electricity bills, municipal bills etc, in respect of construction carried out. The verification of the bills filed by assessee reveals that assessee purchased certain asset in November 2010 and in the fag end of the March. The assessee has not established that the Building and the Machinery were put to use before 30 September 2010 and disallowed 50% of the claim of depreciation. During the first appellate proceeding it was contended on behalf of assessee the assessee the details of Plant and Machinery along with the bills thereof were furnished before AO, vide application dated 31 January 2014. The copies of all those documents were again furnished before the first appellate authority. The ld Commissioner (Appeals) concluded that no evidence has been filed before the AO to show that the Building had been put to use or that Machinery had based installed and dismissed the appeal. We have seen that despite recording that details have been filed in the form of paper book the ld CIT (A) neither considered the document filed before him nor sent those documents for seeking remand report from the AO. We have noticed that order of ld CIT(A) is not in order and not sustainable in the eyes of law. We have further noticed that the assessee has placed on record
the details of additions to the fixed asset, addition to the Factory Building along with copy of bills, details of addition to the Computers along with copy of bills, details of additions to the Plant and Machinery along with copy of bills, details of addition to the Air-Conditioner along with copy of bills and details of Furniture and Fixtures along with copy of bills thereof in the form of paper book. The ld AR for the assessee has certified that all these documents were placed /filed before the AO as well as ld Commissioner (Appeals). Considering the numerous details of the documents and the submission made by ld AR of the assessee that the lower authorities failed to appreciate the documentary evidence placed before them, we deem it appropriate to restore this ground of appeal to the file of AO to reconsider the matter afresh and pass a speaking order in accordance with law. Needless to say that AO shall provide a paucity of hearing to the assessee before passing the order.
5. In the result the appeal filed by assessee is allowed for statistical purpose. Order announced in open court on this 20th day of January 2017. Sd/- Sd/- (D.KARUNAKAR RAO) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 20/01/2017 S.K.PS Copy of the Order forwarded to :