THE ITO, WARD-1(2), BHAVNAGAR vs. SHRI HITENDRASINH GAMBHIRSINH ZALA, BHAVNAGAR

The grievances raised by the Assessing Officer are as follows:-

So far as the appeal of the Revenue is concerned, the tax effect involved in this appeal is less than the limit prescribed by the CBDT Circular No.21 of 2015 dated 10.12.2015. Therefore, the appeal of the Revenue is not maintainable on account of low tax effect in view of the aforesaid CBDT Circular. The appeal of the Revenue is thus dismissed.

We now take up the cross-objections filed by the assessee. 5. In the first ground of cross-objection, the assessee has raised the following grievance: “Ld. CIT (A) erred in law and on facts in confirming disallowance made by AO of depreciation of Rs.1,57,500/- in respect of Hot Mix Plant assembled and full payment made during the year under consideration. Ld. CIT (A) ought to have deleted disallowance of depreciation claimed on the basis of tax audit report certifying allowability of the same. It be so held now.”

This depreciation was declined to the assessee as the assessee could not produce any evidence for delivery of the machine in the relevant previous year, whereas the accounts showed that last bill in this respect was on 03.07.2010 which essentially indicates that delivery must have been taken after this bill was raised. The assessee could not produce, before the AO as also the CIT(A), any evidence in support of the claim of delivery of machinery in the relevant previous year. There is no change in the situation in the proceedings before us. In the absence of any evidence, or any support, for the claim of the asset having been brought to the assessee’s premises, we confirm the stand of the authorities below and decline to interfere in the matter. 7. Ground no. 1 is thus dismissed. 8. In ground no. 2, the assessee has raised the following grievance:

No specific arguments were advanced in support of this grievance. The amount in dispute is also very small. We treat this grievance as not pressed, on account of smallness of amount, and dismiss it as such.

Ground no. 2 is also dismissed.

In ground no. 3, the assessee has raised the following grievance:-

Learned counsel points out that the CIT(A) has partly confirmed these disallowances by following his predecessor’s order in the case of PD Desai & Co. It is so specifically noted at page 36 of the appellate order, and the CIT(A) has also observed that “the discrepancies found in the instant case are almost similar to other assessee engaged in this contract business and the same were also noticed in the case of P D Construction Co’. This decision in P D Desai’s case, however, has been disapproved by a co-ordinate bench of this Tribunal vide order dated 4th February 2016, and learned counsel for the assessee has filed a copy of the said decision. On the basis of this reasoning, learned counsel for the assessee urges us to delete the impugned disallowances as well. Learned Departmental Representative does not dispute the facts embedded in the arguments of the assessee but relies on the stand of the CIT(A) nevertheless.

In view of the above discussions, and respectfully following the esteemed views of the coordinate bench, we uphold the plea of the assessee. The impugned disallowances must accordingly stand deleted. We direct so.

Ground no. 3 is thus allowed.

In the result, the cross-objection filed by the assessee is partly allowed.

To sum up while appeal of the Assessing Officer is dismissed, the cross- objection of the assessee is party allowed. Pronounced in the open court today on the 22nd day of September, 2017