TaxTMI 
TaxTMI 
2019 (5) TMI 1304
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.... in adding Rs. 90,000/- on account of capital introduction. 3. Alternatively and without prejudice to the above, Learned CIT(A) ought to have directed the AO ought to grant benefit of telescoping. 4. The learned CIT(A) has erred both in law and on the facts of the case in confirming the action of AO in disallowing Rs. 2,05,290/- u/s.32 after holding that the appellant has claimed excess depreciation. 5. The learned CIT(A) has erred both in law and on the facts of the case in confirming the action of AO in disallowing Rs. 52,342/- u/s.37 of the Act being 20% of telephone and administrative expenditures on account of personal usage. 6. Both the lower authorities have passed the orders without properly appreciating the fact and that they further erred in grossly ignoring various submissions, explanations and information submitted by the appellant from time to time which ought to have been considered before passing the impugned order. This action of the lower authorities is in clear breach of law and Principles of Natural Justice and therefore deserves to be quashed. 7. The learned CIT(A) has erred in law and on facts of the case in confirmi....
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....the sale of goods, whereas in the revised bill, the commission was paid against the purchase and sale of goods. In respect of remaining nine commission agents, the commission was paid regarding the sale of goods only. (4) In the ledger copy of Shri Nayan Gulabrai Shah an amount of Rs. 622/- was written off as an adjustment. (5) In the original bills, the assessee had paid commission to all the agents against the sale of the quantity 12184.48 M.T., whereas the total sale is declared of 7615.82 MT only. 4.3. In view of the above, the AO was of the view that the adjustment in the commission paid to these parties has been made either to manipulate the weight or the amount of commission. Accordingly, the AO was of the opinion that the commission paid to these two parties is fabricated and non-genuine. Thus, he disallowed the commission expenses of Rs. 10,10,000/- and added to the total income of the assessee. 5. Aggrieved assessee preferred an appeal to the Ld. CIT(A). The assessee before the Ld. CIT(A) submitted that there was some typographical error in the details of commission submitted first time during the hearing before the AO which was rectified from revi....
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....s paid through banking channel. ii. The commission was paid to the parties after the deduction of TDS under the relevant provisions of the Act. iii. The confirmation of accounts was filed by the assessee from both the parties. iv. There was no doubt about the identity of both the parties to whom the commission was paid. v. The addresses of both the commission agents were available before the AO during the assessment proceedings. 10.2. However, the AO without finding out any defect in the details as discussed above has treated the commission expenses as if it was not incurred in connection with the business. As per the AO, the commission expenses was not genuine and the same was fabricated. The basis adopted by the AO for treating the commission expenses as non-genuine has already been elaborated in the preceding paragraph. Therefore, we are not inclined to repeat the same for the sake of brevity and to avoid repetition. In our considered view, the AO before making the disallowance of the commission expenses should have taken the confirmation from the respective parties under section 133(6)/131 of the Act. But the AO failed to do so. 10.3....
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....e basis of the addition in the hands of the assessee. Thus if the details furnished by the 3rd parties are not believable, then the AO is under the obligation for taking the clarification from the concerned parties. 10.7. We also find force in the contention of the learned AR for the assessee that the turnover of the assessee was quite huge amounting to Rs. 24,31,54,719/- which is not possible without the involvement of the commission agents in this kind of trade. The learned DR has not brought anything on record against the contention of the learned AR for the assessee. 10.8. We also disagree with the contention of the learned DR to refer the matter to the AO for conducting the necessary inquiries from the commission agents. It is because the AO had sufficient details in its possession during the assessment proceedings. Therefore, we are reluctant to provide further opportunity to the Revenue for making the fresh inquiries on the same set of documents. In this regard we find support and guidance from the judgment of ITAT Jaipur in case of Abdul Latif (130 ITD 255) wherein it was held as under: "We do not feel to provide second inning to the revenue because the entir....
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....from his brother on the basis of documentary evidence. 18.1. The learned AR before us has also not provided any details to adjust the same with the telescoping benefit. Thus in the absence of any documentary evidence, we are not inclined to disturb the finding of the authorities below. Hence the ground of appeal of the assessee is dismissed. 19. The third issue raised in the fourth ground of assessee's appeal is that the Ld. CIT(A) erred in confirming the disallowance of Rs. 2,05,290/- on account of excess depreciation. 20. The assessee in the year under consideration has shown addition in respect of factory sheds, building, furnace, and plant & machinery. The addition shown by the assessee in respect of these items was allocated before 30th September-2010 and after 30th September-2010. The assessee in respect of addition made before 30th September-2010 claimed depreciation at the full rate prescribed under the provisions of section 32 of the Act. The assessee submitted that the depreciation was claimed on the basis of the date on which the fixed assets were actually put to use. 20.1 The major cost on the replacement and renovation of factory shed and the furnace was co....
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....der of the AO. 22. Aggrieved by the Ld. CIT(A), the assessee is in appeal before us. 23. The Ld. AR before us submitted that the factory shed was ready to put to use. There is no nexus between the factory shed/building and the plant & machinery with the construction of furnace activities. Accordingly, the ld. AR prayed to allow the depreciation at the full rate on the addition of fixed assets before 30/03/2011. 24. On the other hand, the Ld. DR vehemently supported the order of the lower authorities. 25. We have heard the rival contentions and perused the materials available on record. In the instant case, we note that the assessee has shown additions in the fixed assets as detailed under: Details of fixed assets & depreciation allowable Name of the Asset Opening WDV Additions/ Before Sept. (Deduction) After Sept. Closing Balance Rate of Depreciation Depreciation Additional Depren.* Closing WDV Block-II Factory Shed & Bldg.XXXXX Block-III Plant & Machinery XXXXX Furnace 1,629,298 795,080 2.417,826 4,842,204 10 363,329 - 4,478,875 XXXXX XXXXX XXXXX XXXXX XXXXX XXXXXX XXXXXX XXXXX 3,405....
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....art of the factory shed and building after 30th September 2010. If it is one composite building, then the assessee has to demonstrate with the supporting evidence to prove that part of the factory shed was either ready or put to use before 30th September 2010. But the assessee has not proved the same on the basis of documentary evidence. Therefore, we do not find any reason to disturb the finding of the lower authorities. 25.6. Regarding the plant and machinery, we note that the assessee claimed to have incurred the expenses on plant and machinery substantially before 30th September 2010. As per the assessee, these machineries were ready to use. Therefore, these were eligible to claim the depreciation on such plant and machinery. However, we are of the view that such plant and machinery cannot be used without operating the furnace which was not ready to use before 30th September 2010. Thus it is transpired that the use of the plant and machinery depended upon the use of the furnace. There is no dispute that the furnace was not operational before 30th September 2010. 25.7. Now the controversy arises as to whether the assessee can claim depreciation in respect of those assets w....