TaxTMI 
TaxTMI 
2018 (4) TMI 433
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....d claimed 15% of depreciation and 20% additional depreciation on additions to the block of assets "plant and machinery" of Rs. 1,07,34,917/- and Rs. 47,737/-. The sum of Rs. 1,07,34,917/- was the cost of electrical installations and Rs. 47,737/- was the cost of fire extinguisher. According to the AO the electrical installations were not to be regarded as plant and machinery but has to be regarded as falling within the block of assets "furniture and fitting including electrical fittings" on which depreciation is allowable only at 10%. Since additional depreciation is only allowed on plant and machinery, the AO did not allow the claim of the assessee for additional depreciation. According to the AO the assessee could not establish that the electrical installations were an integral part and part and parcel of the plant and machinery. The AO analysed each item of electrical installations which were claimed by the assessee as falling within the ambit of plant and machinery as follows :- 1. Electrical connection from WBSEDCL: Expenditure incurred for installation of Electrical connection comes under the purview of building and the expenses incurred for connection has no relevanc....
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.... connection job work does not come under the Block plant or machinery, additional depreciation is not allowed. 5. Transformer and VCB switch: The expense of Rs. 11,77,000/- towards purchase of transformer and VCB switch is recognised as expense incurred for purchase of electrical fitting. The transformer and VCB switch has its distinct characteristic and used and deployed in Plant & Machineries as per requisition for making the machineries work, This cannot be an integral part of any plant or machinery, but can be used in any kind of plant or machinery for which those are used. Hence, the transformer and VCB switch falls under the category of electrical fitting and depreciation as per Income Tax Act, is allowable @ 10%. Since the transformer and VCB switch do not come under the Block plant or machinery, additional depreciation is not allowed. 6. Various electrical items: The expense of Rs. 1,35,154/- towards purchase of various electrical items switch is recognised 'as expense incurred for purchase of electrical fitting. The various electrical items have its distinct characteristic and used and deployed in Plant & Machineries as per requisition for making the ....
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....llations was integral part of plant and machinery and therefore the revenue authorities ought to have been treated the same as plant and machinery and allowed depreciation at the rates applicable to plant and machinery and should have allowed additional depreciation. 8. We have considered the submissions of the ld. Counsel for the assesee. It is seen from Appendix-I which given the depreciation schedule that furniture including electrical fittings is considered as a separate block of asset. Therefore it is necessary that the assessee should show that electrical installations which are claimed to be falling within the block of assets "Plant and Machinery" are integral part of the plant and machinery and falls within the block of plant and machinery and not within the block of furniture and fittings and electrical installations. The AO has clearly brought out in the assessment order that each item had independent functions and was not an integral part of the plant and machinery. In the given circumstances we are of the view that order of the revenue authorities on this aspect does not require any reconsideration. Accordingly ground no.2 raised by the assessee is dismissed. 9. G....
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....interest income to that extent was not accounted for by the assessee. The following were the relevant observations of the AO in this regard :- "From the 26AS statement, it has been found that Rs. 3,80,268/- has been received as interest on FD from Bank of India, but Rs. 1,27,653/- has been credited to the P /L account as interest on FD. During the assessment proceedings, the assessee has admitted that the accrued interest was not credited, but the received interest was credited only. Accordingly, there is a short credit of Rs. 2,52,615/- as interest received, which is treated as undisclosed income and added back to the total income of the assessee. 14. On appeal by the assessee the CIT(A) dismissed this ground of appeal on the ground that the assessee did not press for adjudication of the aforesaid ground. 15. Before us the ld. Counsel for the assessee submitted that submissions were made before CIT(A) on this issue. We are of the view that it would be just and appropriate to direct the CIT(A) to decide this issue afresh after affording the assessee opportunity of being heard. 16. Ground No.5 raised by the assessee reads as follows :- "5. For that the Ld.....
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....f Rs. 20,00,000/- is recognised by the assessee as unsecured loan taken whereas the party from which loan was borrowed has not acknowledged the same. He therefore concluded that the assessee has introduced 20,00,000/- into its account in the form of unsecured loan and claimed to be repaid during the year, which has not been confirmed by the party engaged in such transaction. 20. On appeal by the assessee the CIT(A) confirmed the order of the AO. Hence ground no.5 by the assessee before the tribunal. 21. We have heard the rival submissions. It is clear from the ledger account of Flower Trading & Investment Co.Ltd. as appearing in the books of accounts of the assessee that there was a debit of Rs. 20,00,000/- on 22.06.2011 towards refund of loan and a corresponding credit entry on 25.06.2011 reversing the debit entry. These entries are contra entries and do not represent any transaction. Flower Trading & Investment Co.Ltd in their books of accounts have not recognized these transactions at all. It is only because of this that there is a difference between the assessee's books of accounts and the books of accounts of Flower Trading & Investment Co. Ltd. In our opinion the assess....