2014 (3) TMI 611

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.... Rs. 2,58,71,588/- allegedly being the difference of the amount of addition of fixed assets as mentioned in fixed assets schedule as per Companies Act and fixed assets schedule for income tax purposes, as undisclosed income. 1.1 That the CIT(A) erred on facts and in laws in not appreciating that the aforesaid difference of Rs. 2,58,71,588/- was on account of addition of computers taken on lease, the lease rental in respect of which was claimed as deduction and hence the said amount was not reflected as part of addition in the fixed assets schedule. 1.2 That the CIT(A) erred on facts and in law in not appreciating that the alleged difference of Rs. 2,58,71,588/- was on account of difference in the accounting treatment of computers take....

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....ounsel and perused the records. We find that in this case assessee has added a sum of Rs. 2,58,71,588/- being value of leased computers in the block of assets and depreciation under Companies Act was computed thereon and debited to the profit loss account. For income tax purposes, the assessee added back the depreciation under the Companies Act which was debited to profit and loss account. In the depreciation that under Income Tax Act, the assessee did not include Rs. 2,58,71,588/- worth of the computers instead assessee claimed Rs. 85,73,228/- being amount paid to the lessor as lease charges in terms of section 37(1) of the Act. As such no depreciation was claimed on such lease computers under the provisions of the Income Tax Act. 6.1 I....

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.... addition/ disallowance may be directed to be deleted." 6.2 It is noted that AO has disallowed a sum of Rs. 2,58,71,588/- being the difference between the fixed assets as per the Companies Act and that as per the Income Tax Act. This has been considered by the AO as income from undisclosed sources by the assessee. This conclusion by the AO is totally incorrect, in light of the submissions of the assessee as above. Furthermore, Ld. CIT(A) has held that the AO was correct in disallowing the claim of depreciation amounting to Rs. 2,58,71,588/-. We find that assessee has not at all made any depreciation claim in this regard in the Income Tax Act and AO has not disallowed any depreciation. Hence, the basis of Ld. CIT(A)'s adjudication is wron....