DEPUTYCOMMISSIONER OF INCOME TAX, BANGALORE vs. M/S INDIAN BREWERY & DISTILLERY P LTD, BANGALORE

ITA 1286/BANG/2014Status: DisposedITAT Bangalore30 July 2015AY 2011-1212 pages
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What did the Tribunal hold?

The Tribunal held that the CIT(Appeals) was correct in allowing depreciation on the effluent treatment plant as the classification and rate were accepted in the year of installation, and the block of assets concept prevents re-examination in subsequent years. The Tribunal also upheld the deletion of purchase disallowance, stating the AO should have cross-verified and that the assessee had provided sufficient evidence. Regarding share application money, the Tribunal agreed with the CIT(Appeals) that the genuineness of the Rs. 1.35 crores transaction was established, but the remaining amount lacked sufficient proof.

What were the facts?

The Revenue appealed against the CIT(Appeals) order deleting disallowances on depreciation for energy saving devices and purchases, and partially deleting an addition on share application money. The assessee claimed depreciation on an effluent treatment plant, which was accepted in a prior year. The assessee also claimed purchases, and the AO disallowed them for lack of bills, while the CIT(A) deleted the disallowance. For share application money, the AO added the entire amount, but the CIT(A) deleted a portion based on evidence provided.

What were the issues?

Whether depreciation on an effluent treatment plant can be disallowed in a subsequent year after being accepted in the year of installation, and whether disallowance of purchases is justified without cross-verification and when supporting bills are provided.

Which sections of the Income-tax Act were involved?

Section 32,Section 68,Section 133(6)

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Income Tax Appellate Tribunal, “C” BENCH : BANGALORE

Before: SHRI N.V. VASUDEVAN & SHRI ABRAHAM P. GEORGE

For Appellant: Dr. Shankar Prasad, K., Jt. CIT(DR)
For Respondent: Shri V. Srinivasan, CA
Hearing: 07.07.2015Pronounced: 30.07.2015

Per N.V. Vasudevan, Judicial Member

This appeal by the Revenue is against the order dated 30.6.2014 of the CIT(Appeals)-I, Bangalore relating to assessment year 2011-12. 2. Ground No.1 is general in nature and calls for no adjudication.

3.

Grounds No.2 & 3 read as follows:-

“2. The learned CIT(A) erred in deleting the disallowance of depreciation of Rs.20,46,677 on energy saving devices without considering that the assessee was not able to prove that the plants formed part of energy saving plant under Rule 5(1) of I.T. Rules.

3.

The learned CIT(A) erred in deleing the disallowance of depreciation on energy saving device

The order continues below.

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