TaxTMI 
TaxTMI 
2011 (5) TMI 651
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....ement of income. 4. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in deleting the addition of Rs. 82,07,445/- made by the AO on account of wrong claim of depreciation. 5. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in restricted the addition to Rs. 2,68,984/- made by the AO on account of non-allowance of depreciation. 6. The appellant craves leave, to add, alter or amend any ground of appeal raised above at the time of the hearing." Grounds of assessee's cross objection: - 1. "That the ld. AO has erred in not allowing depreciation to the assessee company on HB-8 Boring Machine. 2. That the cross objector reserves its right to add one or more grounds on or before the hearing." 2. Assessee had filed returned declaring income of Rs. 13,36,34,400/- on 29th October, 2005 and assessment has been made vide assessment order dated 28.12.2007 at an income of Rs. 14,26,99,627/-, wherein various additions aggregating to a sum of Rs. 90,65,227/- were made. Ld CIT(A) has partly deleted the addition. Against deleted amounts the revenue is aggrieved and has filed afo....
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....the difference was on account of service tax payable which could not be treated as income of the assessee. Thus, relying upon the order of CIT (A), it was pleaded that addition has been rightly deleted and his order in this regard should be upheld. 8. We have carefully considered the rival submission in the light of material placed before us. On verification of all the documents a finding has been recorded by ld. CIT(A) that the bills issued by the assessee were inclusive of service tax. Service tax is a recovery on behalf of the company and it has been paid to Government account. Element of service tax cannot be treated as income of the assessee. No contrary material has been brought to our notice to show that these findings of ld. CIT(A) are contrary to facts existed on record. Therefore, we decline to interfere and this ground of the revenue is dismissed. 9. In ground no. 3 revenue has agitated the deletion of a sum of Rs. 2,36,066/-. This issue has been discussed by the AO in the assessment order in para 4. The AO has mentioned that as per audit report and details the sales to M/s OCL Ltd. were shown at Rs. 64,27,006/-. As against that assessee in its ledger account ha....
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....O and secondly that the said difference was on account of charges of taxes and duties. No material has been brought on record to show that these findings of fact recorded by ld. CIT (A) are contrary to the facts existing on record. In absence of any such material, we decline to interfere in the relief given by ld. CIT (A) and this ground of the revenue is dismissed. 13. In ground no. 4 revenue is agitating the deletion of addition of Rs. 82,07,445/- made on account of wrong claim of depreciation. This issue is discussed by the AO in para 8 of the assessment order. It is mentioned by the AO that during the year under consideration assessee had added a new fabrication unit in its factory. Such unit contained two 50T Cranes, Plate Bending Machine and HB-8 Horizontal Boring Machine. As per fixed register maintained by the assessee, the date of capitalization (which assessee also treats as date of put to use) in respect of different component is as under: - S.No. Item Date Amount No. of days 1. Electrical Equipment 30-09-04 3404680 183 2. Patter & Dies 350/1W TPD Spongtron Equipment 31-03-05 1,74,752 1 3. Plate Bending Machine 25-06-04 24,98,482 280 4....
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.... inspection report of Electrical Inspector simply verifies that installation was in place and is in accordance with norms prescribed. In fact it being preparatory requirement is also evident that the Inspector is allowing the Installations to be energized whether actual put to use took place or only trial of checking power line was there is not known. The fact of matter is that in Industrial Shed the lines are laid out in the period when shed are under construction and after testing of power requirement and it soundness further construction and installation takes place. Therefore, this report may same as evidence of electrical installation in place and fit for use but does not show actual use which in any case can be only after factory shed has been completed. iii) The case of HB-8 would clearly establish that log books and other evidence produced and relied upon by assessee do not support rather they are in complete contradiction to evidence already produced. In the log book copies produced it is claimed that production from this machine started from 13-01-05 onwards whereas the documents given in respect of acquisition reveal that machine was in Calcutta Port till 06-01-0....
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....on, Plate Bending Machine and 50 Ton Cranes. He observed that once a Government Authority inspecting the equipment certifies the date of power supply to the equipments and after inspection has permitted energisation of the equipment then it has to be accepted that the equipments were put to use at least on the date when Government Authority has issued the certificate. He, therefore, directed to allow the depreciation in respect of Plate Bending Machine, 50 Ton Cranes and electric installations as claimed by the assessee. However, in respect of depreciation relating to HB-8 he has observed that the said machinery could not have been put to use during the year under consideration, hence, he has disallowed the depreciation on the said machine. Thus, part relief has been given to assessee. In revenue's appeal the relief given by the CIT (A) has been agitated and in assessee's cross objection non-grant of depreciation on HB-8 Boring Machine is agitated. 16. We have heard both the parties on this issue and their contentions have carefully been considered. Ld. DR relied upon the order of AO as against that so as it relates to deletion of the addition, ld. AR has relied upon the or....