M/S. UNI KOHTECH INFRASTRUCTURE PVT. LTD.,NEW DELHI vs. DCIT, NEW DELHI

The learned counsel of the assessee submitted that the assessee is a Private Ltd. company and the assessee has to incur some expenditure on account of maintenance of his its legal existence, which has been disallowed by the AO; therefore, the amount of Rs. 41,67,126/- may kindly be allowed to the assessee.

Replying to the above, the learned Senior DR submitted that the assessee had claimed depreciation, but the assessee has not used the asset on which depreciation was claimed during the year under consideration; therefore, the AO rightly disallowed the depreciation. The learned Senior DR also submitted that the AO has already registered of company fees and audit fees amounting to Rs. 17, 743/- and the assessee carried out no business activity; therefore, the AO was rightly disallowed the amount of interest on service tax primarily expenses, consultancy expenses and legal

On careful consideration of the above rival submissions, we are of the considered view that it is not the case of the AO that the assessee is first time claiming the depreciation and the assets were not used for the purpose of business during the year under consideration. From the first appellate order, we further note that the Ld. CIT(A) has uphold the disallowance of depreciation by holding that the preposition relied by the assessee rendered by Hon’ble jurisdictional High Court of Delhi in the case of CIT vs Refrigeration & Allied Industry Ltd. is distinguishable as the appellant has not given any submission that the machinery was kept in good working condition so that it could be used at any moment. In our considered view, neither the assessee nor the Ld. CIT(A) has recorded a finding that the assessee claimed depreciation on the first time, and the plant & machinery on which depreciation was claimed was never put to use. In our considered view, when the assessee is claiming depreciation consistently, which was allowed to Page 4 of 5 it during the immediately preceding year, then the depreciation cannot be disallowed merely because that the assessee has not given any submission that machinery was kept in good working condition so that it could be used at any moment. The analogy adopted by the authorities below is not sustainable and bereft of merits therefore, the disallowance of deprecation to the assessee is not tenable, and thus we direct the AO to delete the same.

So far as interest on delayed service tax payment of Rs. 5,92,999/- is concerned this payment has been made by the assessee on account of delayed payment of service tax. This issue has been restored by the Ld. CIT(A) to the file of AO to verify the payment of original challans from the record and to allow accordingly. No further direction is required to be made in this regard and the AO is directed that the payment of service tax and interest thereon to verify after allowing due opportunity of hearing to the assessee and to adjudicate the issue in accordance with relevant provisions of the Act.

So far as other disallowances are concerned the learned counsel of the assessee has not made any sustainable arguments in Page 5 of 5 this regard. Accordingly, in view of foregoing discussion the AO is directed to delete the disallowance of depreciation. Issue of service and interest thereon is allowed for statistical purposes and thus disallowance is restricted to Rs. 59,373/- only. Accordingly, the sole ground of assessee is partly allowed.

In the result appeal of the assessee is partly allowed.