TaxTMI 
TaxTMI 
TaxTMI 
2016 (5) TMI 1456
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....ome Tax Act, 1961 (hereinafter called as 'the Act). The case has been selected for scrutiny and accordingly, notice u/s 143(2) of the Act was issued. In response to notice, the authorized representative of the assessee appeared from time to time and furnished the books of accounts and other details. During the course of assessment proceedings, the A.O. noticed that the assessee uses plastic crates in its business on which it has claimed depreciation at the rate of 50%. The A.O. further observed that plastic crates are coming under the normal block of plant and machinery and hence eligible for depreciation @ 25%. Therefore, issued a show cause notice and asked to explain why the depreciation shall not be restricted to 25%, as against the claim of 50% on plastic crates. In response to show cause notice, the assessee submitted that the plastic crates are coming under the separate block of containers made of glass or plastic used as refills and the eligible depreciation is 50% as per the rates of depreciation prescribed under the Act. The assessee further submitted that a similar claim has been made by the assessee in the earlier assessment years 2001-02 & 2002- 03, which was disallowe....
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....rder, the assessee preferred an appeal before the CIT(A). Before the CIT(A), the assessee reiterated the submissions made before the A.O. The assessee further submitted that as regards the claim of depreciation, a similar addition has been made by the A.O. in the previous assessment years and the CIT(A) and ITAT, have allowed the claim of the assessee. The assessee further submitted that the plastic crates used in its business are coming under the separate block of assets, i.e. containers made of glass or plastic used as refills and eligible for 50% depreciation as per the rates prescribed under the Income Tax Act, therefore, its claim should be allowed. As regards the bad debts, the assessee submitted that it has written off the bad debts in the books of accounts as irrecoverable. Once the debt has been written off, as per the provisions of section 36(1)(vii) of the Act, the assessee not required to prove that the debt has become bad. The only requirement is that it has to write off the debtors in the books of accounts by debiting to the bad debt written off account. The assessee has written off the debts in the books of accounts, therefore, its claim should be allowed. 5. The CI....
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.... A.O. in his remand report and sustained the additions made by the A.O. in respect of bad debts. The CIT(A) deleted the bad debts by holding that the assessee has written off the bad debts in the books of accounts and once the bad debt is written off in the books, the assessee not required to prove the debt become bad in the financial year which is contrary to the provisions of law. 7. On the other hand, the Ld. A.R. of the assessee strongly supported the order of the Ld. CIT(A). 8. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. The first issue that came up for our consideration is depreciation on plastic crates. The assessee uses plastic crates in its business on which it has claimed 50% depreciation. The assessee claimed the depreciation as per the rate fixed under the Income Tax Act, under which a separate block is provided for containers made of glass or plastic used as refills and which are eligible for 50% depreciation. The A.O. was of the opinion that plastic crates cannot be equated with containers made of glass or plastic used as refills. The A.O. further was of the opinion that the plastic ....
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....he CIT(A) being an appellate authority can entertain new claim for the first time when the facts are existed at the time of assessment. In the present case on hand, the facts relating to claim of depreciation are very much available at the time of assessment. The claim made by the assessee towards higher depreciation is arised on the facts existed at the time of assessment. The CIT(A) can entertain such claim while adjudicating the issue. Therefore, we reject the case law relied upon by the D.R. 11. Considering the facts and circumstances of the case and also respectfully following the coordinate bench decision, in assessee's own case for the earlier assessment year, we are of the view that plastic crates used by the assessee in its business are coming under the separate block of containers made of glass or plastic used as refills eligible for 50% depreciation. Therefore, we direct the A.O. to allow 50% depreciation as claimed by the assessee. 12. The next issue that came up for our consideration is disallowance of bad debts. The A.O. disallowed the claim of bad debt by holding that the claim of assessee is not in accordance with the provisions of sec. 36(1)(vii) of the Act. The ....