Tribunal directs reassessment of commission income and depreciation claim, emphasizing detailed scrutiny and factual evidence

The Tribunal allowed the appeal for statistical purposes, directing the Assessing Officer (AO) to reconsider the disallowance of commission income and denial of claim of depreciation. The AO was instructed to obtain precise details of services rendered for the commission payment and issue summons to ascertain the factual position. For the depreciation claim, the AO was directed to reevaluate the ownership and usage of assets, particularly the UPS, and consider technical reports and evidence provided by the assessee. The entire issue of depreciation was restored to the AO for a fresh decision based on the discussions presented.

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Issues Involved:
1. Disallowance of commission income.
2. Denial of claim of depreciation.

Summary:

1. Disallowance of Commission Income:
The assessee appealed against the CIT (Appeals) confirming the disallowance of Rs. 9,50,000 for commission paid to M/s. Narendra Presstech (P.) Ltd. The Assessing Officer (AO) found that the commission was booked under "General expenses" but concluded that no services were rendered by M/s. Narendra Presstech (P.) Ltd., deeming it an arrangement to lower profits. The CIT (Appeals) upheld this, stating the assessee failed to provide evidence of services rendered. The Tribunal noted that while the commission was paid by account payee cheque, the precise nature of services was not furnished. The AO's notice u/s 133(6) was replied to by M/s. Narendra Presstech (P.) Ltd., but the AO inferred no services were rendered. The Tribunal set aside the lower authorities' orders, restoring the matter to the AO to decide afresh, directing the assessee to provide precise details of services rendered and relevant correspondence. The AO was also directed to issue summons u/s 131 to the recipient to ascertain the factual position.

2. Denial of Claim of Depreciation:
The assessee's claim for depreciation of Rs. 32,81,530 on various assets was disallowed by the AO, who found discrepancies in the value and usage of assets purchased, particularly from M/s. Bisquare Consultancy (P.) Ltd. The AO also disallowed 100% depreciation on UPS, treating it as office electrical installation eligible for only 10% depreciation. The CIT (Appeals) confirmed the AO's action, stating the assessee failed to prove ownership and usage of assets as required u/s 32(1) of the Act. The Tribunal noted that the assessee provided details of assets and argued that the business operations indicated usage of assets. For the UPS, the Tribunal found merit in the argument that it also functions as an automatic voltage controller and restored this issue to the AO for fresh consideration based on a technical report. Regarding the EDA Software, the Tribunal acknowledged the invoice and bill of entry but found the assessee failed to demonstrate its usage during the year. The Tribunal restored the entire issue of depreciation to the AO for fresh decision, considering the provided discussion.

Conclusion:
The appeal was allowed for statistical purposes, with directions for fresh consideration by the AO on both issues.

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