NANAVATI CHEMEX P.LTD,MUMBAI vs. ITO 2(2)(3, MUMBAI

The brief facts of the case are that the assessee filed the return of income declaring total loss to the tune of Rs.1,15,020/- on 31.10.2007. The return of was processed u/s.143(1) of the Income Tax Act, 1961 ( in short “the Act”) on 24.10.2008. The case was selected for scrutiny by issuance of notice u/s.143(2) of the Act dated 18.08.2008 which was served upon assessee. Notices u/s.143(2) and 142(1) of the Act were also issued and served upon the assessee. The assessee claimed depreciation of Rs.2,99,148/- on the plant and machinery and factory shed. However, on perusal of the assessee’s Profit and Loss Account, it was observed that the only credit was on account of commission of Rs.2,04,615/-. There was no other credit to the Profit & Loss Account to show the assessee’s involvement in manufacturing activity. The Assessing Officer was of the view that the Plant & Machinery and factory shed were for manufacturing purpose. Therefore, the claim of the assessee for depreciation to the tune of Rs.2,99,148/- was disallowed, thereafter in appeal the CIT(A) confirmed the said disallowance. Feeling aggrieved the assessee filed the present appeal before us.

We have heard the arguments advanced by the learned representative of the parties and have gone through the record carefully. The sole point which has been raised by the assessee is in connection with the confirmation of disallowance by the CIT(A) with regard to his claim on depreciation of Rs.2,99,148/-. The learned A.Y.2007-08 representative of the assessee has argued that since the relative asset has entered the block therefore the claim of the deprecation is required to be allowed in the interest of justice. In support of this contention of the learned representative of the assessee has placed reliance on the law settled in Commissioner of Income Tax -7 Vs. M/s. Sonic Biochem Extractions Pvt. Ltd. decided by the Bombay High Court on 17.11.2015 and [2005] 142 taxman 316 Hon’ble High Court of Kerala in case of Commissioner of Income Tax Vs. Travancore Chemicals & Mfg. Co. Ltd. The facts of the case relied by the representative of the assessee is quite different from the present case. The law relied by the assessee speaks about the running of business where one particular machinery was not used in the relevant assessment year. Whereas in the instant case the business of the assessee is not running from the relevant assessment year and plant and machinery were not put to use for business purpose. Here it is necessary to advert the finding of the assessment order on record:-

The finding given by the CIT(A) is quite justifiable and in accordance with law. No distinguishable facts have been produced before us to contradict the finding of the CIT(A). At the time of cost of repetition it is clarified that the law relied by the learned representative of the assessee nowhere identical to the facts of the present case, therefore, the finding no ground to interfere with at this appellate stage.

Accordingly the appeal filed by the assessee is hereby dismissed. A.Y.2007-08