Disallowance of interest and financial expenses was not...

Disallowance of interest and financial expenses was not justified as the appellant paid interest and financial expenses to State Bank of India, Overseas Branch, Parliament Street, New Delhi, which was evident from the bank statement furnished. The disallowance of depreciation claimed was incorrect as depreciation is an allowance, not an expense, and the audited balance sheet and tax audit report revealed the claim of depreciation certified by the auditor. The AO should have verified the claim from the previous year's records. Depreciation allowed in earlier years on fixed assets should be allowed in the current year, except for additions during the year due to lack of details. The non-allowability of credit for brought forward losses/unabsorbed depreciation was incorrect as the assessee had shown brought forward losses/depreciation in returns filed from year to year, which should be allowed as per the Income Tax Act while calculating tax demand. The appeal of the assessee was allowed.