TaxTMI 
TaxTMI 
TaxTMI 
2014 (5) TMI 883
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....ned assessment year, inter alia, claiming depreciation on a new Pelletisation Unit. For manufacturing sponge iron, assessee purchased iron ore from Brabil/Joda/Koira area of Orissa. The by-product on crushing of iron ore is iron ore fines or dust. The coarse iron ore fines, if pelletized could be used for the sponge iron. For this purpose, assessee during the relevant previous year endeavoured to set up a Pelletization Unit, in the same location where it was manufacturing sponge iron and M.S. Ingot. Assessee claimed depreciation on this new Unit. According to the assessee the said Unit was commissioned during the relevant previous year. 6. Assessing Officer required the assessee to produce evidence showing that the Pelletization Plant has come into existence during the relevant previous year and had started production. Assessee thereupon furnished copy of a letter from Project Manager, District Industry Centre, Rourkela addressed to the Banking Authority, wherein it was stated that firing of the Unit was successfully undertaken on 19.10.2006. Assessee also produced copy of a certificate from the State Pollution Control Board in support of its claim that the Pelletization Plant sta....
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.... issued by Sarpanch of Chandiposh of Gram Panchayat certifying commencement of commercial production of the Pelletization Plant on 27.02.2007. Project Manager of District Industries Centre had also noted that there were several defects, to be rectified, which were found when trial production started on 18.01.2007. As per the assessee plant started functioning after rectifying such defects on 27.02.2007. Assessee also produced stock register of Bentonite Powder wherein purchases of 50 MT on 15.08.2006 was recorded, which was issued for trial production during the period 26.11.2006 to 15.02.2007. As per the assessee, Director's report for the relevant previous year also clearly mentioned that commercial production in the iron pelletization plant had started on 27.02.2007. The quantity of finished product from such pelletization plant being pellets 1198.16 MT was reflected in the closing stock appearing in Schedule 6 of its audited accounts. 8. Ld. CIT(Appeals) sought a remand report from the Assessing Officer on the above submissions. As per ld. CIT(Appeals) in the remand report Assessing Officer simply reiterated what was stated by him in the assessment order. Considering all the d....
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....make functioning of the unit irregular. It cannot be considered as sufficient evidence to reach a conclusion that commercial functioning had not started. As against this, assessee had produced considerable evidence mentioned at para 7 above, which, inter alia, included certificate from Sarpanch, Chaniposh Gram Panchayat, certificate from Project Manager, District Industries Centre, Rourkela and letter from Deputy Director of Factories and Boilers, Rourkela Division, Uditnagar, Rourkela, which all pointed out clearly that assessee had commenced commercial production at least on 27.02.2007. Assessee had also shown consumption of Bentonite Powder, Furnace Oil and C.P. Coke in its stock register during the relevant previous year. Assessee also showed that there was purchase of Bentonite Powder which was one of the raw material required for pelletization. Assessing Officer had not made any comments on these aspects in his remand report noted by the ld. CIT(Appeals). This position has not been rebutted by the Revenue. We are, therefore, of the opinion that the ld. CIT(Appeals) took a correct view when he directed depreciation to be allowed on the pelletization plant. We do not find any r....
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....We find that there was an agreement between assessee and M/s. R.B. Steel & Alloys and the commission was paid by the assessee to the said concern as per terms and agreement. The commission was paid after deducting tax and also after effecting service tax payment. Similar commissions paid in the preceding years were allowed by the Revenue. There is no case for the Revenue that M/s. R.B. Steel & Alloys was in any way related to the assessee. Commission of @ Rs.25/- per MT on sponge iron sold, and could not be considered as excessive payment. There was nothing on record to show that commission incurred was not for the purpose of business of the assessee. Ld. CIT(Appeals) was, therefore, justified in deleting the disallowances. Ground No. 2 of Revenue stands dismissed. 18. Vide it's Ground No.3, grievance of the Revenue is that ld. CIT(Appeals) directed allowance of Keyman's Insurance Premium of Rs.54,65,175/-. 19. Assessee's claim for Keyman's Insurance Premium was disallowed by the Assessing Officer. However, ld. CIT(Appeals) relying on the decision of the Hon'ble Mumbai High Court in the case of CIT -vs. - B.N. Exports (2010) 323 ITR 178 held that the premium on Keyman's Insurance....