TaxTMI 
TaxTMI 
2016 (6) TMI 1323
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..... CIT(a) erred in confirming the disallowance made by the Assessing Officer u/s. 40(a)(i) of the Act of Rs. 4,223,522/- paid to foreign parties towards sales promotion services rendered outside India for alleged non deduction of tax u/s. 195 from such payment without appreciating that no tax withholding was called for from such remittance." The revenue had raised the following ground no. 1:- "1. That the Ld. CIT(A) has erred on facts and circumstances of the case and in law by holding that provisions of section 40(a)(ia) do not apply on foreign payments on account of Advertisement, Professional & Consultancy Fees and Commission to foreign travel agents." The assessee had also raised the following sole ground in its cross objection :- "1. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in ignoring to consider the Publicity and Sales Promotion Expenses of Rs. 4,242/- and Rs. 7,88,126/- respectively incurred by The Oberoi Grand, Kolkata and Oberoi Hotels, Mumbai, the two units of the appellant while adjudicating Ground No. 1 and thereby not concluding that the aforesaid payments do not attract the provision of section 40(a)(i) of the Act." 3. The br....
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.... of the Act. Accordingly, he deleted the disallowance of Rs. 41,09,352/- (2,05,46,761*20%) made by the Learned AO. 3.2. Before the Learned CITA, the assessee claimed that a sum of Rs. 2,11,17,612/- incurred by the assessee pertains to Publicity and Sales Promotion Expenses. These payments were made to non-residents in connection with sales promotion and publicity matters in respect of services rendered abroad by the foreign parties, who do not have permanent establishment in India. It was argued that payments were made for publicity, sales promotion and reservation services and payments were not in the nature of royalty or fees for technical services either under the relevant provisions of DTAA or under the provisions of the Act and hence not taxable in India. Accordingly, it was argued that there was no obligation to deduct tax at source on the payments made thereon. The assessee also placed reliance on the decision of Hon'ble Delhi High Court in the case of Director of Income Tax vs Sheraton International Inc reported in (2009) 178 Taxman 84 (Delhi) wherein it has been held that income by way of advertisement, publicity and sales promotion were not assessable u/s 9 of the Act as....
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....al of the various services provided. The Learned CITA listed out the payments made to various parties in various tax jurisdictions amounting to Rs. 1,43,42,248/- where make available clause is provided in the treaty. The Learned CITA also listed out the payments made to various parties in various tax jurisdictions amounting to Rs. 59,82,996/- where make available clause was not provided in the tax treaty. However, he restricted the addition to Rs. 42,23,523/- being the remaining portion of the disallowance (i.e 83,32,875 - 41,09,352). 3.3. Aggrieved, the assessee as well as the revenue both are in appeals before us. 3.4. The Learned AR argued that the payments made to various parties in abroad does not fall under the ambit of FTS. He placed reliance on the decision of the Co-ordinate Bench of Mumbai Tribunal in the case of Rich Graviss Products P Ltd vs Addl CIT reported in (2014) 166 TTJ 329 . He argued that the services were not rendered by those parties in India. He also argued that the retrospective amendment to the provisions of section 9 of the Act in Explanation 2 would not confer the TDS obligation on the assessee with retrospective effect. He placed reliance on the decis....
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.... deductor is not expected to know how the law will change in future. A retrospective amendment in law does change the tax liability in respect of an income, with retrospective effect, but it cannot change the tax withholding liability, with retrospective effect. The tax withholding obligations from payments to non-residents, as set out in section 195 of the Act, require that the person making the payment 'at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income tax thereon at the rates in force'. When these obligations are to be charged at the point of time when payment is made or credited, whichever is earlier, such obligations can only be discharged in the light of the law as it stands at that point of time." 3.5.2. While rendering the decision in assessee's own case for the Asst Year 2003-04 in ITA No. 57/Kol/2007 dated 9.12.2015, we had also relied on the aforesaid decision together with the decision of the Hon'ble Apex Court in the case of CIT vs Hindustan Electro Graphites Ltd reported in (2000) 243 ITR 48 (SC) as below:-. In this....
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.... provisions." In view of our aforesaid decision, the Ground No.2 raised by the assessee is dismissed as superfluous. 5. Disallowance of Professional and Consultancy Fees The Ld. AO has stated in the assessment order that the assessee incurred an amount of Rs. 2,80,38,329/- in foreign currency on account of "Professional and consultancy charges". During the assessment proceedings, the assessee provided the details of the payees and the respective amount of payments. However, no specific reason for non deduction of tax at source was provided. Since, the assessee did not provide the reasons for not withholding the tax and the applicability of DTAA in respect of each specific foreign remittance, the Ld. AO inflicted an ad hoc disallowance of Rs. 5,607,666/- u/s. 40(a)(i) of the Act, being 20% of the actual expenses of Rs. 2,80,38,329/-. The assessee, before the Learned CITA, submitted that party wise details of the relevant units were furnished to the AO during the assessment proceedings. As per the assessee, the contention of the Ld. AO that no tax was deducted on the above payments is not true. The assessee submitted that entire remittance of Rs. 8,41,027/ - by the Bangalore unit....
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....mitted that by virtue of Article XIV of DTAA with Australia, the payment was not subject to tax in India. The assessee also furnished the Australian tax residency certificates of the above party. In view of the above, the assessee contended that since the income was not taxable in India, there was no requirement to withhold tax while making the remittances. The assessee submitted that the similar principle should also apply for the payments to other legal consultants like Clifford Chance and Kurtz Ahlers & Associates. As regards the payments made to M/s. Deloitte & Touch, USA the assessee submitted that the payment was made to the above payee in relation to the review of market prospects in Dubai. The assessee contended that since the above services were provided outside India and was not utilized in any business in India, the same should not be taxable in India. In respect of consultation and professional fees amounting to Rs. 66,35,747/- for Trident Mumbai project, the assessee contended that the amount was capitalized and thus not claimed as tax deductible. Accordingly, the question of disallowing such expenditure does not arise. 5.1. The Learned CITA observed that most of th....
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....ils were filed by the assessee only before the Learned CITA . In response to this, the Learned AR objected to the same as the Learned CITA had duly called for a remand report from the Learned AO before disposing off the appeal. 5.3. We have heard the rival submissions and perused the materials available on record. With regard to the prayer of the Learned DR for setting aside of this issue to the file of the Learned AO, we find that the Learned AO had submitted his remand report vide letter dated 12.3.2010 and assessee had also duly filed its rejoinder to the remand report. The Learned CITA after taking into account the remand report and rejoinder filed by the assessee and on perusal of the entire details had deleted the addition. We also find that the Learned CITA had given categorical finding in respect of each and every payment by referring to relevant provisions of the Act and with specific reference to treaties of various countries. None of these findings were controverted by the revenue before us. Hence we find no infirmity in the order passed by the Learned CITA on this issue. Accordingly, the Ground No. 1 raised by the revenue in respect of Professional and Consultancy fees....
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....mission to foreign travel agents outside India would not fall under the ambit of interest, royalty or fees for technical services and accordingly the amendment in Explanation 2 to section 9 with retrospective effect from 1.6.1976 would not alter the situation. Accordingly he held that commission paid to foreign agents for sales outside India do not accrue or arise in India and thus is not taxable in India. Accordingly the provisions of section 40(a)(i) of the Act could not be made applicable in the facts of the instant case. Aggrieved, the revenue is in appeal before us. 6.1. We have heard the rival submissions and perused the materials available on record. With regard to the prayer of the Learned DR for setting aside of this issue to the file of the Learned AO, we find that the Learned AO had submitted his remand report vide letter dated 12.3.2010 and assessee had also duly filed its rejoinder to the remand report . The Learned CITA after taking into account the remand report and rejoinder filed by the assessee and on perusal of the entire details had deleted the addition. We also find that the Learned CITA had given categorical finding in respect of this issue which is stated he....
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....ed towards securing guest reservation cannot be considered as technical fees and as such are not deemed to accrue or arise in India. In respect of the contention of the AO that the expenses represent monthly provisions, the assessee submitted that the expenditure represent actual expenses for different' months and the Ld. AO was merely guided by the narrations in the details filed and did not ask for any further clarification. The assessee further submitted that the disallowance inflicted by the Ld. AO was purely based on surmise and conjecture and thus, should be deleted. The Ld. CIT(A) perused the submissions made by the assessee as well as the relevant documents filed during the appellate proceedings. On examination of the relevant documents he found the details of payment under this head is as under: Oberoi Contact Centre 8,36,037.00 Trust International 68,782.13 The leading Hotels of the World 72,817.08 Leading Interactive Reservation 16,406.00 Provision for 388 nights 14,379.00 Provisions of different months 7,82,966.53 -------------------- 1,79,13,387.84 -------------------- Out of the above payments, the assessee submitted that p....
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....see are allowed for statistical purposes. 8. Disallowance on account of provision for overriding commission The revenue has raised the following ground:- "2. That the Ld. CIT(A) has erred on facts and circumstances of the case and in law by overlooking the fact that provision for over-riding commission debited by the assessee and claimed as expenses are not allowable because these are mere 'provisions'." The Learned AO observed that the amount of Rs. 37,00,563/- represents provision and hence not allowable as a business expenditure. Before the Learned CITA, the assessee, on the other hand, submitted that, the overriding commission is paid to the travel agents who are able to generate additional business and the overriding commission is paid over and above the normal commission payments, The assessee submitted that the overriding commissions do not represent an unascertained liability since the concerned parties had fulfilled their contractual obligations and they were entitled to additional commission. Since the actual payment of the commission was made in a later date and the assessee was following mercantile system of accounting, the amount as determined was shown as "provis....
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....e was not able to produce the contrary evidence in this regard we find no infirmity in the order of the Learned CITA in this regard. Accordingly, the Ground No. 2 raised by the revenue is dismissed. 9. Disallowance on account of aircraft running and maintenance expenditure The Learned AO during the course of assessment proceedings observed that the assessee had debited a sum of Rs. 3,63,25,075/- towards aircraft maintenance expenses. The Learned AO disallowed 10% of the same on an ad hoc basis on account of alleged personal element of expenditure incurred thereon. The Learned CITA after making verification of the detailed break up of expenditure provided by the assessee which were also subjected to remand proceedings, and based on the order in the assessee's own case for the Asst Years 2004-05 and 2005-06 , upheld the disallowance made by the Learned AO. Aggrieved, the assessee is in appeal before us on the following ground:- "5. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the estimated disallowance of Rs. 3,632,508/-, on account of aircraft running and maintenance expenses being 10% of the aggregate expenditure of Rs. 36,325,075/- ....
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.... Court decision in 253 ITR 749 is well placed and supports the case of the assessee. We also find lot of force in the arguments of the Learned AR that if at all there is any personal element involved in the aforesaid expenditure, the same have to be taxed as perquisite in the hands of the directors and it is only for the TDS officer to look into the violations, if any, on the same and hence on that ground also, no disallowance of expenditure could be appreciated. We find that the Learned AO had made the entire addition based on surmises and conjectures and made on adhoc basis . It is well founded proposition that what is apparent is real and the allegation to prove the contrary is on the person making such allegation. The following decisions support our view in this regard:- CIT vs Daulat Ram Rawatmull (1973) 87 ITR 349 (SC) Sukhdayal Rambilas vs CIT (1982) 136 ITR 414 Madura Knitting Co vs CIT (1956) 30 ITR 764 (Mad) In view of the aforesaid facts and circumstances and respectfully following the judicial precedents thereon, we have no hesitation in deleting the addition made in the sum of Rs. 42,80,883/- on an estimated basis. Accordingly, the Ground No. 4 raised by the as....
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.... respect of the proposed hotel. However, eventually the project went through financial crunch and the party could not arrange for funds. At this point, at the request of the party, the assessee provided an advance of Rs. 15.12 crores to the party for the completion of the hotel project. However, ultimately the project could not be succeeded and the financial institutions identified the loan provided to the party as NPA. Subsequently, IFCI took possession of the hotel and sold it to a third party. As per the assessee, it had business interest in providing advances to the party since it wanted an early completion of the project so that it can earn revenue from the project by virtue of Technical Services Agreement. Moreover, all the loans were provided from its own fund. The assessee further submitted that out of the amount of Rs. 17,83,91,145/ -, only Rs. 15,12,00,000 represents the amount of advance, The remaining amount of Rs. 2,71,91,145/- represents accumulated interest. The appellant duly offered such interest to income tax in the respective years. Thus, while computing the notional interest for the purpose of disallowance, the AO mistakenly considered the entire amount as adva....
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.... the assessee submitted that during the assessment proceedings the AO did not ask for the details of "Other Miscellaneous Advances". Further, the assessee submitted that the perusal of the above details would reveal that in almost all cases the advances were given by the assessee due to commercial expediencies, In addition, the assessee submitted that the items like Debit balances in Sundry Creditors A/ c, advance to suppliers, Gratuity Receivable etc. having business advances did not represent any loan on which interest can be charged. On the other hand, as per the assessee, in case of staff loan, interest was charged by the assessee @12%. The assessee further submitted that it had earned a profit of Rs. 260,74,50,176/- during the relevant financial year. In addition to that, it had a reserves and surplus of Rs. 992,56,27,750/ -. It was also submitted that Ld. AO that all receipts including the sale proceeds and the borrowings were deposited in cash credit account and all payments including the advances were effected through this mixed account. Thus the question of submission of separate accounts for utilization of own surplus and borrowed funds does not arise. Further, the net in....
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.... computing the disallowance of notional interest." The revenue has raised the following ground:- "3. That the Ld. CIT(A) has erred on facts and circumstances of the case and in law by holding that the miscellaneous advances made are purely trade advances/deposits and not in the nature of loan when the assessee could not furnish any evidence to show that the advances given were trade advances/deposits and were made from its own surplus." 10.2. We have heard the rival submissions and perused the materials available on record. We find that this issue is covered in assessee's own case for the Asst Years 2003-04 , 2004-05 & 2005-06 in ITA Nos . 57/Kol/2007 ; 1846/Kol/2007 and 299/Kol/2010 dated 9.12.2015 respectively, wherein it was held that :- 7.4. We have heard the rival submissions and perused the materials available on record. We find from the paper book filed by the assessee that the entire details as to for what purpose the monies were paid by the assessee company to the aforesaid parties were given before the Learned AO . We find that in respect of amounts advanced by the assessee to certain group companies where interest is charged by it, there is absolutely no dispute. I....
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....ere not utilized for making the interest free advances by the assessee. This finding is given irrespective of the fact that the same were advanced as a measure of commercial expediency and for the purpose of business. We find that all the advances were made as Strategic Investments to pursue its further business interests and those companies were also using the brand of the assessee, rendering technical services and assessee's staff were used by the group companies and hence had to be construed as advances made during the course of assessee's business. 7.4.3. We draw our support from the following decisions in support of our findings :- a) CIT vs Gopalakrishna Muralidhar reported in (1963) 47 ITR 469 (AP) b) Woolcombers of India Ltd vs CIT reported in 134 ITR 219 (CAL) c) CIT vs Hotel Savera reported in 239 ITR 795 (MAD) d) CIT vs Britannia Industries Ltd reported in 280 ITR 525 (CAL) e) S A Builders Ltd vs CIT reported in 288 ITR 1 (SC) f) Addl. CIT vs Tulip Star Hotels Ltd in CC No. 7138-7140 / 2012 dated 30.4.2012 by the Supreme Court , wherein it was held as below:- In our view, S.A.Builders Ltd vs CIT reported in 288 ITR 1, needs reconsideration. Though it is....
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.... of a businessman and not that of the revenue. Accordingly we hold that the action of the Learned AO in disallowing a sum of Rs. 4,67,38,966/- and Learned CITA restricting the said disallowance to Rs. 3,73,32,024/- is not warranted and Ground Nos. 8 & 9 raised by the assessee are allowed. 10.3. It is not in dispute that the assessee had sufficient own funds to make these advances. The assessee had earned a profit of Rs. 260,74,50,176/- during the year and had reserves and surplus of Rs. 992,56,27,750/-. Hence it could be safely concluded that the assessee was flooded with own funds and borrowed funds were not utilized for making these interest free business advances. None of the findings given in the aforesaid order in assessee's own case were controverted by the revenue before us. Respectfully following the aforesaid decision in assessee's own case, we allow the Ground Nos. 6 to 8 raised by the assessee and dismiss the Ground No. 3 raised by the revenue. 11. Disallowance u/s 14A of the Act The AO, in the assessment order has stated that the assessee company earned exempt income of Rs. 95,47,937/ - during the relevant assessment year. During the course of assessment proceeding....
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....an estimated basis with regard to the expenditure incurred for the purpose of earning tax free income. The Hon'ble Jurisdictional High Court in the case of CIT vs M/s R.R.Sen & Brothers P Ltd in GA No. 3019 of 2012 in ITAT NO. 243 of 2012 dated 4.1.2013 had held as under:- " The assessee did not show any expenditure incurred by him for the purpose of earning the money which is exempted under income tax. The tribunal has computed expenditure at 1% of such dividend income, which, according to them, is the thumb rule applied consistently. We find no reason to interfere. The appeal is dismissed." We find that the Learned CITA had also directed the Learned AO to restrict the disallowance u/s 14A of the Act at 1% of dividend income. Hence we find no infirmity in the order passed by the Learned CITA in this regard. Accordingly, the Ground No. 9 raised by the assessee is dismissed and Ground No. 5 raised by the revenue is dismissed. 12. Disallowance on account of Commission paid to Airport Authority of India for non-deduction of tax at source The AO in the assessment order passed, has stated that Oberoi Flight Services, an unit of the assessee company, had paid an amount of Rs. 59,63,....
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....dvance of Rs. 90,150,000/ - to Nandi Hills Hotels & Resorts Limited towards equity participation of joint venture project with Jansons group of Bangalore. However, eventually the project was abandoned. The assessee received back an amount of Rs. 7,00,00,000 from Nandi Hills Hotels & Resorts Limited in pursuant to the order of Hon'ble Calcutta High Court. The remaining sum of Rs. 2,01,50,000/ - was claimed by the appellant as "Advance written off" during the course of assessment proceedings. However, since the amount was not claimed in the return of income, the AO, by applying the principle laid down by the Hon'ble Supreme Court in the case of Goetze (India) Ltd Vs. CIT [2006] (284 ITR 323), rejected the claim of the assessee. The assessee, on the other hand, furnished a detailed submission contending that it is entitled to the deduction of the said amount in the assessment year under appeal. The assessee contended that the AO did not dispute the genuineness of the claim. However, in view of the decision of Hon'ble Apex court in the case of Goetze India Ltd. (supra) the deduction was denied. It was further argued that the department could collect only legitimate tax as per ....
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....gued that the advance was made during the course of business of the assessee and hence the same has to be construed as a regular business loss. In response to this, the Learned DR argued that this is a joint venture investment made by the assessee and the income had it been derived would have been taxed in the hands of the said joint venture which would invariably be a separate legal entity and accordingly the loss arising out of the said joint venture investment should be incurred only in the said joint venture hands and not in the hands of the assessee. He accordingly pleaded that the decision of the Calcutta High Court relied upon by the Learned AR is not applicable to the facts of the case. In defence, the Learned AR stated no such separate entity as claimed by the Learned DR was ever started for joint venture participation. The assessee was to get royalty from various hotels for using its trademark, logo and name at various locations across India. The assessee was not entitled to any other income other than royalty out of making this joint venture investment. 13.3. We have heard the rival submissions. The facts stated hereinabove remain undisputed and hence are not reiterated....
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....re arose in the relevant year." We find similar view has been taken in the following cases :- (a) Decision of Hon'ble Delhi High Court in the case of Indo Rama Synthetics (I) Ltd vs CIT reported in ( 2011) 333 ITR 18 (Del). (b) Unreported decision of Hon'ble Calcutta High Court in the case of CIT vs Alcove Industries Ltd in ITA No. 724 of 2004 dated 17.8.2015 (c ) Decision of Hon'ble Karnataka High Court in the case of Asia Power Projects (P) Ltd vs DCIT reported in (2015) 370 ITR 257 (Kar) Respectfully following the ratio laid down in the aforesaid judgements, we allow the claim of assessee in respect of advances written off in the sum of Rs. 2,01,50,000/- as deduction in the year under appeal. Accordingly, the Ground No. 11 raised by the assessee is allowed. 14. Disallowance on account of provision for leave encashment - Rs. 12,70,751/- The assessee has raised the following ground:- "12. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the disallowance of Rs. 12,70,751/- made by the Assessing Officer on account of claim for Provision for Leave Encashment made in assessment on the basis of the decision of the jurisdictional High C....
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.... course of assessment proceedings in the desired format. However, the Ld. AO has not inflicted disallowance in respect of any specific item but disallowed an estimated amount of 10% on an ad hoc basis. The assessee further submitted, that certain penalties are compensatory in nature and thus not disallowable. With reference to disallowance in respect to TDS the assessee submitted that written off TDS should not be disallowed since it represents uncollected income in the hands of the assessee. The assessee contended that since the income from which tax was deducted at source had been offered for taxation in earlier years, TDS written off should be treated as business loss for the year. The assessee also placed reliance on the decision of Hon'ble Punjab & Haryana High court in the case of CIT Vs. Shreyans Industries Ltd. (2006) 157 Taxman 417. 15.1. The Learned CITA observed that the Ld. AO had made the impugned disallowance on ad hoc basis which is not based on any specific observation on the details provided by the assessee. Even in the remand report, the Learned AO could not justify his addition. The Learned CITA held that the Learned AO had summarily mentioned that the gener....
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....d by the assessee that the amount of Rs. 29,65,542/- includes the provisions for bonus of all the units of the assessee company which inter alia includes the provision in respect of "Oberoi Airport Services, Mumbai". Thus, as per the assessee, the sum of Rs. 29,65,542/- already includes the amount of Rs. 7,12,000/- In view of the above the assessee argued that a further disallowance of Rs. 7,12,000/- would result into double disallowance and should be deleted. 16.1. The Learned CITA observed that the Tax Auditor of the assessee had duly certified that a bonus amount of Rs. 29,65,542/- remain unpaid and accordingly the same was disallowed voluntarily by the assessee in the return of income. He observed that the sum of Rs. 7,12,000/- is included in the disallowance made in the sum of Rs. 29,65,542/- and accordingly deleted the double disallowance. Aggrieved , the revenue is in appeal before us on the following ground:- "6. That the Ld. CIT(A) has erred on facts and circumstances of the case and in law by allowing provision for bonus u/s. 43B of the Act even when such provision is not an allowable expenditure." 16.2. We have heard the rival submissions. We find that no contrary e....
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.... employees who had left the organisation did not file any declaration that they had waived their dues from the Company. Thus, as per the assessee the liabilities as shown in the books exists and has not ceased. In view of the assessee, the left employees may claim their salaries and wages in the subsequent years. Thus, the liability to pay the admitted dues still exists on part of the company and merely in absence of a valid claim it cannot be concluded that the liability has ceased to exist. 17.1. The Learned CITA held that section 41(1) of the Act in order to be operative, there should be a write back in the books of accounts of the assessee and there should be cessation of liabiities. He agreed with the various judicial decisions relied upon by the assessee and deleted the addition made u/s 41(1) of the Act. Aggrieved , the revenue is in appeal before us on the following ground:- "7. That the Ld. CIT(A) has erred on facts and circumstances of the case and in law by holding that section 41(1) of the Act is not applicable in the assessee's case regarding unclaimed salaries and wages in respect of Oberoi flight Services Mumbai and Oberoi Airport Services." 17.2. We have heard th....
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....no register is maintained. Thus, in view of the AO the reply of the appellant is not tenable. - In the metro cities there is a restriction of plying of the goods vehicle during 7.00 am to 10 pm. Thus, in view of the Ld. AO the assessee must have received the goods after 10pm on 30the September, 2005 or 31st March, 2006, as the case may be. Thus, it is not possible to put such items into use on 30th September, 2005 or 31st March, 2006 itself. The Ld. AO could not check the actual time of delivery in absence of the challans. - Since, the specific items of fixed assets in question are imported, as per the Ld. AO, the work of installation of the items would require some special expertise. Thus, the contention of the assessee that the items were ready to use is not tenable since, even the work of unpacking the goods, preparing the platform for installation etc would require some time. In view of the above, the Ld. AO concluded that the selected items of additions made on 30th September, 2005 should be allowed depreciation for the use of less than 180 days during the year. On the other hand, additions of the selected items on 31st March, 2006 should not be eligible for depreciation.....
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....resume why any asset acquired on 27.3.2006 could not be installed and put to use by 31.3.2006. - In respect of the machineries received on 30th September, 2005, the assessee submitted that even if the machineries were not put to use on the date of its receipt, it should be allowed full depreciation since only the assets put to use after 2.10.2005 would qualify for 50% of normal depreciation, being used for less than 180 days . 18.1. The Learned CITA observed that the disallowance made by the Learned AO was not based on any specific observation and had merely acted merely on the basis of a preconceived notion that a machinery cannot be installed on the very same day of its receipt. He further observed that a certificate from the Production Manager of the assessee was produced before the Learned AO confirming the fact that the machinery under consideration was put to use on a particular date and in the instant case , going by the size of the assessee company, where there are designated persons to deal with individual departments , a certificate from the person heading the particular division cannot be lightly and summarily ignored. However, in respect of depreciation on a specific....