ITAT Kolkata allows appeal, reduces disallowed depreciation due to purchase bill discrepancies.

The ITAT Kolkata partially allowed the appeal, directing the deletion of Rs. 13,23,621 out of the total disallowed depreciation amount of Rs. 14,33,621 due to discrepancies in purchase bills. The ITAT considered the impact of the Covid-19 pandemic on the delay in pronouncing the order and agreed with the parties to disallow a minimum of Rs. 1,00,000 for miscellaneous deficiencies. The decision was influenced by a similar case at the Mumbai Tribunal, ultimately ruling in favor of the assessee by deleting a portion of the disallowed depreciation amount.

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Issues involved:
Disallowance of depreciation claimed by the assessee in the assessment year 2015-16 based on improper purchase bills.

Analysis:
The appeal filed by the assessee challenged the order passed by the Commissioner of Income Tax (Appeal)-2, Kolkata, which upheld the disallowance of depreciation of Rs. 14,33,621 made by the Assessing Officer. The assessing officer noted discrepancies in the purchase bills submitted by the assessee, including unsigned, unstamped bills with missing details like model numbers and company names. Consequently, a show cause notice was issued, and the AO disallowed the depreciation claimed based on the questionable bills.

The CIT(A) affirmed the AO's decision, stating that the bills submitted were not proper, unsigned, and lacked essential details. The CIT(A) found no infirmity in the AO's order and dismissed the appeal. Subsequently, the assessee appealed to the ITAT Kolkata.

During the ITAT hearing, both parties agreed to disallow a minimum of Rs. 1,00,000 on account of miscellaneous deficiencies. The ITAT, after considering the submissions, agreed to disallow Rs. 1,00,000 out of the total disallowed amount of Rs. 14,33,621. The balance of Rs. 13,23,621 was directed to be deleted.

The ITAT acknowledged the delay in pronouncing the order due to the Covid-19 pandemic and lockdown, excluding the lockdown days from the calculation. The decision was influenced by a similar case at the Mumbai Tribunal. Ultimately, the ITAT partly allowed the appeal of the assessee, ruling in favor of deleting a portion of the disallowed depreciation amount.

In conclusion, the ITAT Kolkata partially allowed the appeal, directing the deletion of Rs. 13,23,621 out of the total disallowed depreciation amount.

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