2020 (1) TMI 17

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....ve come in appeal before us is on part allowance of assessee's claim of depreciation. 3. Brief facts are, the assessee company is carrying on business of manufacturing, trading and export of aroma Chemicals. For the assessment year under dispute, the assessee filed its return of income on 15th October 2010, declaring total income of Rs. 8,52,45,790. Subsequently, the assessee filed a revised return of income on 29th April 2011, offering income of Rs. 13,28,07,892. The assessment in case of the assessee was completed under section 143(3) of the Income Tax Act, 1961 (for short "the Act") vide order dated 28th February 2013, accepting the income declared in the revised return of income. Subsequently, the Assessing Officer received inf....

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...., is not genuine. Since, the purchase effected was for a capital good on which the assessee had claimed depreciation @ 15%, the Assessing Officer ultimately completed the assessment by disallowing assessee's claim of depreciation. The assessee challenged the said disallowance before the first appellate authority. 4. After considering the submissions of the assessee in the context of facts and material on record, learned Commissioner (Appeals) having found that the subject purchase involving a capital good (machinery) has been installed by the assessee in its factory, opined that the assessee in fact has purchased the goods. However, he observed that the assessee has not purchased the goods from the declared source but from grey market by....

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....the assessee has to be allowed in full. 6. The learned Departmental Representative submitted, as the assessee has failed to prove the genuineness of purchase, even a part of depreciation cannot be allowed. 7. We have considered rival submissions and perused the material on record. Though, it may be a fact that the Assessing Officer was in receipt of information from the Sales Tax Department that certain goods purchased by the assessee is doubtful, however, in the course of assessment proceedings, the assessee had furnished various documentary evidences to prove such purchases. In fact, the Assessing Officer himself has stated that in response to the query raised by him, certain details were furnished by the assessee. As it appears fro....

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....upon the information received from the Sales Tax Department and the fact that the notice issued under section 133(6) of the Act returned back un-served, the Assessing Officer has disallowed assessee's claim of depreciation. Whereas, learned Commissioner (Appeals) without any justifiable reason has reduced the purchase value by 50% and allowed depreciation thereon. It is not forthcoming from the order of learned Commissioner (Appeals) on what basis he has reduced 50% of the purchase value. In our opinion, when the assessee has furnished certain documentary evidences demonstrating purchase of goods from the declared source and delivery of such goods at its premises, without bringing any contrary material to falsify such evidences, assessee....