ITAT Upholds CIT(A) Decision on Depreciation Disallowance for Unit II

The ITAT upheld the CIT(A)'s decision to delete the disallowance of depreciation for Unit II. The CIT(A) found evidence of production starting in August 2009, supported by sales invoices and transporter's receipts. The ITAT determined that no new evidence was submitted during the appeal process and concluded that the revenue's appeal lacked merit as existing documents were available to the Assessing Officer. As a result, the ITAT dismissed the revenue's appeal and the assessee's cross objection.

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Issues involved:
Appeal against disallowance of 50% depreciation on assets in Unit II.

Analysis:
1. The assessee, a manufacturer exporter public limited company, derived income from various cables and wires during the relevant assessment year. The assessing officer disallowed 50% of the depreciation claimed by the assessee for Unit II as the company failed to provide evidence of commencing production in Unit II before September 2009.

2. The assessee appealed to the Commissioner of Income-tax (Appeals) [CIT(A)], who reviewed the documents and found evidence that production in Unit II had started in August 2009. The CIT(A) referred to sales invoices and transporter's receipts to support this finding and deleted the disallowance of depreciation. The revenue challenged this decision, arguing that the CIT(A) should not have accepted additional evidence without giving the Assessing Officer an opportunity to respond, as per Rule 46A.

3. The Departmental Representative (DR) highlighted the CIT(A)'s statement that the company had been making sales from Unit II since April 2009, with excise duty and sales tax duly deposited. The DR contended that the Assessing Officer should have been given a chance to counter this evidence. In response, the Authorized Representative (AR) argued that all documents considered by the CIT(A) were already available with the Assessing Officer, and there was no request for additional evidence under Rule 46A.

4. The ITAT Delhi carefully examined the case and noted that the documents presented to the CIT(A) were also in possession of the Assessing Officer. The ITAT found no indication that the assessee had submitted new evidence during the appeal process. The ITAT concluded that the revenue's appeal lacked merit as the CIT(A) based the decision on existing documents available to the Assessing Officer. Consequently, the ITAT dismissed the revenue's appeal and the assessee's cross objection as moot.

5. The judgment was pronounced on 6th April 2018, with the ITAT upholding the CIT(A)'s decision to delete the disallowance of depreciation for Unit II, as the evidence provided by the assessee was already on record and did not require additional verification under Rule 46A.

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