Section 54G relief requires proof of actual industrial relocation; unsupported depreciation and transfer-expense claims were also disallowed.

The Tribunal examined a limited-scrutiny objection, a section 54G relocation claim, depreciation under section 32, transfer-expense deductions in capital gains computation, and loss on sale of fixed assets. It found the case had been taken up for complete scrutiny, so the challenge based on CBDT Instruction No. 20/2015 failed. Section 54G relief was denied because the assessee did not prove actual shifting of the industrial undertaking or produce essential supporting documents. Depreciation and transfer-expense disallowances were upheld for want of correct block-of-assets computation and evidence. The addition for loss on sale of fixed assets was deleted because the accounting treatment and income computation were reconciled.

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Issues: (i) whether the assessment was vitiated for alleged violation of CBDT Instruction No. 20/2015 on limited scrutiny; (ii) whether deduction under section 54G was admissible on the claimed relocation of the industrial undertaking; (iii) whether the disallowance of depreciation under section 32 was justified; (iv) whether the disallowance relating to transfer expenses and the related capital gain computation was justified; and (v) whether the disallowance of loss on sale of fixed assets debited to the profit and loss account was sustainable.

Issue (i): whether the assessment was vitiated for alleged violation of CBDT Instruction No. 20/2015 on limited scrutiny.

Analysis: The assessment record showed that the case had been taken up for complete scrutiny and not for limited scrutiny. On that basis, the challenge based on the alleged breach of the limited scrutiny instruction did not survive.

Conclusion: The objection was rejected and the issue was decided against the assessee.

Issue (ii): whether deduction under section 54G was admissible on the claimed relocation of the industrial undertaking.

Analysis: The statutory benefit under section 54G required proof of shifting of the industrial undertaking from an urban area to another specified area and supporting evidence of the acquisition and installation of new plant and machinery. The record did not show the sale deed, original purchase deed of the transferred land, or evidence of actual shifting and continuation of the undertaking. Mere purchase of land and building was insufficient to satisfy the conditions of the provision.

Conclusion: The disallowance of the claim was upheld and the issue was decided against the assessee.

Issue (iii): whether the disallowance of depreciation under section 32 was justified.

Analysis: The depreciation claim was found to have been computed without properly reducing the relevant adjustments in the block of assets and the opening written down value. The excess claim was therefore treated as unsupported by the asset-wise and block-wise computation on record.

Conclusion: The disallowance of depreciation was upheld and the issue was decided against the assessee.

Issue (iv): whether the disallowance relating to transfer expenses and the related capital gain computation was justified.

Analysis: The assessee had claimed transfer expenses while computing the capital gain, but no supporting documentary evidence was produced before the Assessing Officer, the first appellate authority, or the Tribunal. In the absence of proof, the deduction could not be accepted.

Conclusion: The disallowance was upheld and the issue was decided against the assessee.

Issue (v): whether the disallowance of loss on sale of fixed assets debited to the profit and loss account was sustainable.

Analysis: The reconciliation showed that the alleged loss had already been considered in the working of income and was supported by the accounts. The Tribunal accepted that the accounting treatment and the computation were aligned and that the addition was not warranted.

Conclusion: The disallowance was deleted and the issue was decided in favour of the assessee.

Final Conclusion: The appeal succeeded only on the claim relating to loss on sale of fixed assets, while the remaining adjustments were sustained.

Ratio Decidendi: A claim under section 54G requires affirmative proof of actual shifting of the industrial undertaking and satisfaction of the statutory conditions, and a deduction or disallowance connected with capital computation must be supported by contemporaneous evidence and proper block-of-asset reconciliation.

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