TaxTMI 
TaxTMI 
TaxTMI 
2016 (11) TMI 1244
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....e Assessing Officer, assessee carried the matter before ld. CIT(A), who vide order dated 08.05.2013 in Appeal No.SLI/251/11-12 dismissed the appeal of assessee. Aggrieved further by the order of ld. CIT(A), assessee is now in appeal before us and has raised following grounds :- "The following grounds of appeal are without prejudice to each other: 1. The learned Commissioner of Income Tax (Appeals) (I), Kolhapur erred in confirming the disallowance of depreciation of Rs. 16,21,886/- on the cost of foundation of a Wind Turbine and on the cost of installation and commissioning of the Wind Turbine without properly appreciating the explanation filed. 2. While confirming the disallowance of depreciation amounting to Rs. 16,21,886/-, the learned CIT(A) conveniently ignored the copies of the appellate order passed by the CIT (A) in similar type of case and also purposefully ignored the decisions of the ITAT, Pune and of the Bombay High Court when copies of those decisions were filed before him on 19th of March, 2013 and when the said decisions were directly on the issue involved. 3. The learned CIT(A) erred in confirming the addition of Rs. 15,01,088/- on account of shortage in frui....
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....e carried the matter before ld. CIT(A), who upheld the order of Assessing Officer by holding as under :- "4. The issue of disallowance of depreciation had come up in appeal before me in the appellant's own case for assessment year 2008-09. I hereby confirm the disallowance made during the year under consideration based on the reasons recorded in my appellate order bearing No.SLI/280/10-11 dated 08/05/2013." 4. Aggrieved by the order of ld. CIT(A), assessee is now in appeal before us. 4.1 Before us, at the outset, ld. AR submitted that the issue of depreciation is covered in assessee's favour by the decision of Co-ordinate Bench of Tribunal in assessee's own case for assessment year 2008-09. He pointed to the relevant portion of the order of the Tribunal dated 31.03.2016 in ITA No.1293/PN/2013. He therefore submitted that since the facts of the case in the year under appeal are identical to that of earlier year, as has also been noted by the ld. CIT(A), the issue in the year needs to be decided in favour of the assessee by following the order of Co-ordinate Bench of Tribunal. The ld. DR did not controvert the submissions of ld. AR but however supported the orders of the lower au....
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..... Therefore, impugned capital expenditure towards civil work & commissioning etc. also will qualify for the same rate of depreciation as applicable to wind turbine itself. The issue is no longer res-integra and is covered by the decision of Co-ordinate Bench of the Tribunal in the case of Poonawala Finvest & Agro (P.) Ltd. vs. ACIT, (2008) 118 TTJ 68 (Pune) wherein it has been clearly held that the capital expenditure incidental to the windmill has to be tested on the touchstone of the functional test and the assessee will be entitled to higher rate of depreciation on such incidental expenditure, if it has no other use except for power generation done by the windmill. Our view is also supported by another decision of the Co-ordinate Bench of Pune Tribunal in the case of M/s D.J. Malpani vs. ACIT in ITA Nos.1148 to 1154/PN/2013, order dated 30.10.2015. Accordingly, we hold that the Revenue is misdirected itself in law in making the impugned disallowance of depreciation." 9. The issue being squarely covered in favour of the assessee the depreciation as claimed by the assessee deserves to be allowed. In the result, Ground Nos.1 & 2 are allowed." 6. Before us, Revenue has neither p....
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....harges (f) Application charges (g) Professional charges and (h) Bank charges (i) Civil Works were held not entitled to depreciation @80% as they are not a part of the Windmill. Thus, allowing depreciation @10% with regard to the cost of civil work foundation for the Windmill listed at (i) above and depreciation of 15% on all the other items listed at (a) to (h). Thus, the Assessing Officer disallowed the claim of Rs. 92.58/- lakhs and restricted the depreciation to only Rs. 4.20 Crores as against Rs. 5.12 Crores claimed by the Respondent-assessee. 4 ..... 5 ..... 6 ..... 7 Regarding Question (1) (a) We find both the CIT(A) as well as the Tribunal have recorded a finding of fact that the items listed at (a) to (d) in paragraph(3) above form an integral part of the Windmill. Thus, entitled to 80% depreciation being a part of a Windmill. Admittedly, this very question arose before the Punjab and Haryana High Court in Commissioner of Income Tax v/s M/s Eastman Impex being Income Tax Appeal No.350 of 2013 decided on 18th December, 2014 wherein an identical question arose and following the decisions of Rajasthan High Court in Commissioner of Income Tax v/s K. K. Enter....
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....order. The assessee was asked as to show as to why the shortage claimed not be disallowed to which, assessee inter-alia submitted that assessee deals in fruits which are highly perishable in nature. It was submitted that assessee also exports vegetables. Due to the quarantine laws, there is strict check on all the shipments on the goods and because of which assessee has to remove the goods which are not upto the standards before the shipment and these goods are destroyed. It was further submitted that the price of goods are dependent on the quality and the freshness of produce and that the damages to the fruits occur inter-alia due to evaporation of water content, improper pre-harvest and post-harvest handling and damage during the transportation of the goods. Due to the aforesaid factors, the damage takes place and the same has been claimed by assessee. The submission of the assessee was not found acceptable to the Assessing Officer as he was of the view that assessee had not furnished any documentary evidence to support its claim of loss. He therefore considered 50% of the shortage claimed by the assessee, as being not allowable and accordingly after considering the average purch....
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....) and further in the Paper Book submitted the photographs of the entire process from harvesting to the final uploading of the container for exports, copy of the chart revealing water content of fruits and vegetables. He pointed to the various processes and submitted that assessee records the purchase of the grapes which are purchased at the farm but subsequently on grading the fruits many times the fruits which are not upto the mark or damaged, have to be considered as wastes and have to be destroyed. He further submitted that assessee has been following similar method of accounting of shortage in earlier years and subsequent years and the method of accounting has been accepted by the Revenue even in the scrutiny assessment proceedings. He placed on record the copy of assessment orders framed for assessment years 2006-07 to 2008-09. He further submitted that the Assessing Officer has not brought on record any material to demonstrate that assessee has sold the damaged goods without recording it in the books of accounts and that the disallowance has been made by Assessing Officer on ad-hoc basis without recording a finding as to which of the contentions made by the assessee are incor....
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....eo Haveli and (iii) Shri Vishnu Namdeo Nalawade. The Assessing Officer recorded their statements. He noted that though these persons were stated to be supplying the crops to the assessee since last 18 to 20 years and even though they were maintaining bank accounts, the assessee had made payments to them in cash. The Assessing Officer thereafter concluded that since the assessee was making cash payments inspite of fact that these persons were maintaining bank accounts, the purchases shown by the assessee were not verifiable as the sellers were not maintaining any record in respect of sale of crops to the assessee. He accordingly made ad-hoc addition of Rs. 5,00,000/-. Aggrieved by the order of Assessing Officer, assessee carried the matter before the ld. CIT(A), who upheld the order of Assessing Officer by holding as under :- "7. The assessing officer has noticed that payments in cash have been made to crop growers of grapes, mangoes etc. To verify the purchases in cash, three of the crop growers were asked to be produced. Three persons viz. Ramesh Pandurang Bangale, Shri Sharad Vasudeo Haveli and Shri Vishnu Namdeo Nalawade were produced and their statements were recorded. It was ....
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....le of goods to the assessee and receipt of sale proceeds in cash. He submitted that only basis for disallowance by Assessing Officer was nonmaintenance of records by the sellers. He submitted that when the sellers of goods have accepted the sale of goods to the assessee and receipt of the sale proceeds, the mere fact of non-maintenance of records at the sellers end cannot be a ground for disallowing the expenses in the hands of the assessee. He further submitted that the payments of cash by the assessee is permitted in view of Rule 6DD(e) of the Income Tax Rules, 1962 (in short 'the Rules') as the purchases are of agricultural goods. He further submitted that even though ld. CIT(A) has noted that the Assessing Officer's observation of purchase price being non-verifiable was incomprehensive but still ld. CIT(A) has upheld the disallowance. He therefore submitted that in the present situation no ad-hoc disallowance at the end of the Assessing Officer was called for. The ld. DR, on the other hand, supported the orders of lower authorities. 13. We have heard the rival submissions and perused the material on record. It is an undisputed fact that the assessee has purchased fruits for wh....
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.... of the total expenses Rs. 18.95 lakhs on account of loading and unloading expenses, the Assessing Officer had disallowed only Rs. 75,000/-. Before us, assessee has not placed any material to controvert the findings of Assessing Officer. Considering the totality of facts and in the absence of any material placed by the assessee to controvert the findings of Assessing Officer, we are of the view that the Assessing Officer was justified in disallowing Rs. 75,000/- and therefore we are of the view that no interference to the order of Assessing Officer is called for. Thus, the ground No.5 of assessee's appeal is dismissed. 17. Ground No.6 is with respect to disallowance on account of expenditure being of personal in nature. 17.1 During the course of assessment proceedings on perusing the Profit & Loss Account, Assessing Officer noticed that assessee had debited aggregated amount of Rs. 10,98,046/- under the head administrative expenses which comprised of expenses on account of vehicle repairs and maintenance, telephone expenses and travelling expenses. The Assessing Officer was of the view that the element of personal expenditure of the directors and the family members could not be ....