TaxTMI 
TaxTMI 
2018 (4) TMI 336
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.... in his report did not mention the actual date of installation / commissioning date in 3 CD report field along with the return however, CIT(A) accepted the additional evidences in this regard in contravention to rule 46A." 2. That on the facts and in circumstances of the case, the CIT(A) erred on facts as well as in law in holding that interest attributable to acquisition of plant and machinery of Rs. 53,71,826/- was allowable as revenue expenditure, ignoring the facts that plant and machinery was not put to use during the period which is evident from the auditor's report in which auditor did not mention the date of installation / commission of plant & machinery, and as such, interest attributable to those plant and machinery was not allowable a revenue expenditure, rather it was required to be capitalized." 3. That on the facts and in circumstances of the case, the CIT(A) erred in deleting the addition made on account of loss in transit of Rs. 19,57,500/- by accepting additional evidences in support of assessee's claim, ignoring the facts that by accepting additional evidence without getting report from the AO violating the provisions of rule 46A. 4. Tha....
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....ion of Rs. 6,92,40,656/-. Hence, the amount of depreciation claimed by assessee was disallowed and added to the total income of assessee. 4. Aggrieved, assessee preferred an appeal before Ld. CIT(A). The assessee before Ld. CIT(A) submitted that the installation certificate obtained from G. Steelmet Pte Ltd. Singapore was duly produced before the AO during the course of assessment proceedings. As per the certificate the trial production of three machines were commenced on 06.04.2009, 06.04.2009 and 22.05.2009 respectively. The machines purchased by assessee were sophisticated machines therefore there was no expenses on account of installation and trial run on such plant and machineries. There was sufficient space inside factory building constructed by the assessee including civil and electrical works and the same was appearing in the schedule of fixed assets. The date in the tax audit report for "put to use" of plant and machinery was not specified due to topographically error. The entire amount of depreciation claimed by assessee for Rs. 6,92,40,656/- does not pertain to the year under consideration but part of it for Rs.78,89,281/- represents the depreciation claimed on ....
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....hey could reach the assessing officer only after completion of assessment. The appellant has also stated that in the remand proceedings, the assessing officer has not been able to point out any specific defect in the evidence. He has also not conducted any inquiry. He has clearly stated in the report that he does not find any infirmity in the contents of the said letter regarding installation and trial production. He has however, requested the matter may be examined in the light of other supporting documents. 3.7. After going through the material on record, following observations are made:- i) The date of purchase of the items of machinery is prior to 31.03.2009 i.e. in the preceding financial year. Some import bills are as old as June, 2007. ii) As per the certificate issued by the supplier, the commissioning and installation of the machinery took place in April, 2009 which is towards the beginning of the previous year. iii) Though the auditor has not specifically mentioned the date of putting machine to use, they have computed the allowable depreciation for the full year implying that the machinery was put to use in the first half of t....
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....uch lower value and had relatively small manufacturing turnover before the year under consideration. It achieved substantial production and turnover during the year, apparently due to installation and utilisation of the machinery. As stated earlier, no specific deficiency has been found by the assessing officer in respect of evidence produced by the appellant. All the surrounding facts and circumstances discussed above clearly indicate that the machinery was used during the year. Considering this, the disallowance of depreciation cannot be sustained and the same is deleted." Aggrieved, by the above finding of Ld. CIT(A), the Revenue is in appeal before us. 5. Ld. DR before us vehemently relied on the order of AO whereas Ld. AR for the assessee before us filed paper book which is comprising pages 1 to 53 and drew our attention on the certificate for the installation issued by G.Steelmet PTE Ltd. Signapore which are placed on pages 9 to 11 of the paper book and Ld. AR for the assessee relied on the order of Ld. CIT(A). 6. We have heard the rival contentions of both the parties and perused the material available on record. In the instant case, the depreciation claimed by asse....
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....fect in the submission of the assessee in his remand report. 6.1 We also hold that the merely non filling up the relevant column of tax audit report i.e. put to use, cannot be the basis for making the disallowance of depreciation amount. Similarly all other evinces produced during the proceedings before the lower authorities cannot be disregarded without pointing out any defect. Thus, we cannot ignore the details as furnished by the assessee before Authorities Below during the appellate proceedings. Ld. DR at the time of hearing has also not pointed out any defect in the finding of Ld. CIT(A). Thus, we have no alternative except to confirm the order of Ld. CIT(A). We order accordingly. 7. Next issue raised by Revenue in ground No.2 is that Ld. CIT(A) erred in deleting the addition made by the AO on account of interest expense of Rs.53,71,826/- attributable to the acquisition of plant and machinery. 8. During the course of assessment proceedings, AO observed that cost incurred by assessee on account of LC charges of Rs.9,64,504/- and interest charges of Rs.44,07,322/- needs to be capitalized in view of the fact that the plant and machineries were not "put to use" during ....
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....ue in nature. In the light of above reasoning, we hold that the order of the Ld. CIT(A) is correct and in accordance with law and no interference is called for. We hold accordingly. This ground of Revenue's appeal is dismissed. 12. Next issue raised by Revenue in ground No.3 is that Ld. CIT(A) erred in deleting the addition made by the AO for 19,57,500/- on account of loss in transit on the basis of additional evidences which were accepted in contravention to the provisions of Rule 46A of the IT Rules, 1962. 13. The assessee in the year has claimed a loss of Rs. 19,57,500/- on account of loss of goods in transit but failed to justify the same on the basis of documentary evidences before AO during assessment proceedings. Thus, the claim made by assessee was disallowed by the AO and added to the total income of assessee. 14. Aggrieved, assessee preferred an appeal before the Ld. CIT(A). The assessee before Ld. CIT(A) submitted that goods were exported in the financial year 2007-08 to M/s Dicker International Ltd. and accordingly the amount of sale was offered to tax. However, the party could not get the goods cleared from the Customs Authority. Therefore, the assessee has wr....