TaxTMI 
TaxTMI 
2020 (1) TMI 838
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.... bills of assets or payment to suppliers for assets recorded in asset register corroborated by report of Dalai Mott Macdonald as directed by Hon'ble IT AT. Ld. CIT (A) ought not to have confirmed disallowance simply on the basis of survey report. 3 Ld. CIT (A) erred in law and on facts in not considering further valuation done from Shri Mukesh M Shah by holding it to be self serving document. Ld. CIT (A) ought to have taken cognizance of valuation corroborating existence of the assets. Ld. CIT (A) ought not to have relied on finding of the survey report that only assets installed in 2001 & 2002 be considered as real addition. 4.Ld. CIT (A) erred in law and on facts in confirming disallowance by AO without granting opportunity to the appellant to cross examination of the statements recorded during survey. Ld. CIT (A) ought to have directed AO to evaluate claim of depreciation as per directions of Hon'ble IT AT. 2. This is the second round before us. This matter came before the ITAT in ITA No. 298/Ahd/2006 for A.Y. 2002-03, ITA No. 338/Ahd/2006 for A.Y. 200203, ITA No. 4282/Ahd/2007 for A.Y. 2002-03 wherein revenue challenged the order of the ld. CIT(A) and Co-ordinat....
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....ed the fact that'some of the software were developed locally and installed in the system. The finding of fact recorded by learned CIT(A) find support from the valuation report of assets prepared by Dalai Mott MacDonald which was found in survey -which .indicated that software were developed and installed by the assessee in the system. The assessee produced all the vouchers and receipt for the same which .vas also examined by learned CIT(A). Nothing is produced before us during the course of arguments to rebut the findings of learned CIT(A). Considering the facts and circumstances of the case in the light of the material .on record, we do not find any justification to interfere with the order of the learned CIT(A) in allowing depreciation respect of all the software purchased and installed during the year. Further, the AO denied claim of the assessee because no fixed assets register was maintained by the assessee but same was produced before the AO subsequently. Some statements were recorded during the course of survey but it is not clear from the assessment order whether the same were supplied to the assessee for allowing their cross examination on behalf of the assessee. Unles....
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....t found physically at the factory premises. Later on, the assessee produced the fixed assets .register, where the additions to fixed assets were written in the register in different pen and with Sr. No. suffixed with "A". The asset valuation report prepared by Dalai Mott MacDonald was found during the survey which listed the assets of the assessee and its valuation as on 30-04-2003. The A. O. has found that all the assets are not mentioned therein. The statements were taken from various persons, who said that majority of the software came with machines and only small changes are to be made in the software in consultation with the original suppliers and that where is the license or CD to use software, nobody could produce the same. The summons was issued to various suppliers, but no one attended. The AO has, therefore, held that the purchases of these assets are not genuine and disallowed the depreciation calculated at Rs. 12,82,17,500/-. It was submitted before the learned CIT(A) that all the assets purchased are genuine and the depreciation should be allowed. A copy of the appraisal report for valuation done by Dalai Mott MacDonald in respect of fixed assets was found during the s....
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.... of survey, which was prepared by Dalai Mott MacDonald, there is mention of automation for machinery and the existence of software and even the o AO has accepted these facts and credit for part of the amount is to be given. When the AO was not accepting the existence of software and all the purchases of software were there to justify the claim, the same has to be accepted. Regarding-the absence of other machineries during the survey, the assessee has submitted that during the long period from the date of installation to the date of survey, some of the items have either turned into scrap or used items and some of the items have already been fitted in as a part of the machinery. Further, it was not possible by the survey team to note down correctly all assts, as it was not physically possible to write down all the assets found during the survey at factory premises as there were large number of plant & machineries and hence, the report prepared at the time of survey was not proper and complete. The fact that the assets are mentioned in the stock register in different hand writings and with numbers suffixed with "A" was only due to the reason that when it was found that the same were n....
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....claim of the assessee for depreciation should be allowed or not. After detailed deliberations and both the parties we heard in detail in support of its contention, Ld. A.R. submitted all the details with regard to purchase of machines. On the other hand, revenue contention was that machines were not purchased on the given date and payment was made through journal entry. When we specifically asked about the payment made in order to purchase machinery. Ld. A.R. shown us the payment detail and they were made through banking channels and relevant details of the said payment were shown to us and list of suppliers with invoices of machinery purchased were also submitted before the lower authorities. And ledger account of M/s. Vimpsan Precision Pvt. Ltd. was also submitted before the lower authorities. Apart from that reconciliation chart of plant and machinery with Dalal Mott Macdonald report were also submitted to the effect that machines were very much there and inspection was duly carried out by the surveyor. And Valuation Report certificate dated 26.05.2003 wherein before granting loan IDBI Bank carried out inspection and Valuation Report was duly prepared wherein details of all the ....