TaxTMI 
TaxTMI 
2020 (6) TMI 628
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....ke up the facts from Unimed Technologies Ltd. ("UTL" for short), as this appeal has been extensively argued by ld.representatives. 3. Brief facts of the case are that Unimed Technologies Ltd. has filed its return of income electronically on 18.9.2013 declaring total income at Rs. 4,45,94,808/-. The case of the assessee was selected for scrutiny assessment, and notice under section 143(2) was issued on 2.9.2014. The assessee at the relevant time was engaged in manufacturing and dealing with pharmaceutical products and also development/sale of product technologies relating to pharmaceutical formulation. On scrutiny of the accounts, it revealed to the AO that the assessee-company has made an addition in the assets of Rs. 10,65,00,000/- on account of Solar Power Plant on which depreciation at the rate of 80% and additional depreciation at the rate of 20% was claimed totaling to Rs. 5,32,50,000/- under the head "Finance Lease Assets". The facts with regard to M/s.Sun Petrochemicals P.Ltd. are that the assessee has filed its return of income on 29.9.2013 declaring total income at Rs. 3,51,52,094/- under the normal provision, and book profit under section 115JB of the Act at Rs. 58,14,....
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....uced on page no.4 to 6 of the assessment order. Thereafter, the ld.AO has analysised submissions made by the assessee. He thereafter made comparative study of the information called for vis-à-vis the kind of information submitted by the assessee. The ld.AO after going through such details rejected the claim of the assessee. The comparison made by the AO is worth to note. It reads as under: "4.6. In response to the above show cause, the assessee company replied vide it's letter dated 16/03/2016 which is reproduced hereunder - Sr. No. Explanation required by LAO Explanation of the assessee i) As to how the investment was made by M/s Real Gold Developers LLP when the contract as well as Power Purchase Agreement was signed by MP Power Management Co. Ltd. with M/s A/fa Infraprop Pvt Ltd. : Real Gold purchased the assets and made investments. Alfa Infra took the assets on lease from Real Gold and others. ii) Evidence of receipt of each equipment with copy of purchase invoice, transportation evidence and delivery challans from premises of M/s Real Gold Developers LLP. Evidences in respect of handing over of these equipments to th....
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....s) and its specification with distinctive numbers, related documents of import and/or warranty Details are already submitted. It is also explained that Real Gold spent the amount and we have reimbursed the amount coming to our share. Copy of account is also filed. Kindly refer our submission dated 01st March, 2016 sr. no. 9. Description is as per purchase invoice, with distinct identification numbers, import bill of lading, and transport copy etc have already been submitted earlier. ix) Submit the copy of invoices of the erection & installation of the Solar Power Plant by M/s Alpha Infra prop PvtLtd. Cost of acquisition from Real Gold includes installation & erection, details of which have already been submitted. X) Justification of claim that the solar power plant was ready for generation of power as on 01.03.2013 in view of the fact that commercial generation of electricity was first started in the month of September 2013. In the business of leasing, we handed over the plants on lease to M/s Alfa Infra. We received the lease rent also. Our claim is based on our nature of business. On 01.03.2013, it was ready from equipment ....
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....(A)-1 has allowed the appeal of "AMSL". The ld.CIT(A) has reproduced the order of "AMSL", and thereafter observed that there is no disparity on the facts. Therefore, he concurred with ld.CIT(A)-1, who has allowed depreciation to "AMSL". The ld.CIT(A) accepted the claim of the assessee and allowed this ground of appeal. The brief discussion made by the ld.CIT(A) qua both the assessees is available in para 4.1.3 which reads as under: "4.1.3. Since the facts are identical in the case of appellant also, I respectfully following the order of CIT(A)-1, Vadodara in the case of Aditya Medisales Ltd. hold that the appellant is entitled to claim the depreciation on the Solar Power Generation Plant owned by it and leased out during the year under consideration for earning lease rentals duly assessed as business income. Accordingly, the Assessing Officer is directed to allow the depreciation to the appellant. Thus, appellant succeeds in respect of Ground No. 2." 6. The ld.DR submitted that the ld.CIT(A) has not applied his mind on the facts highlighted by the ld.AO. The ld.CIT(A) simply concurred with ld.CIT(A)-1, Vadodra, who has granted depreciation to "AMSL". He poin....
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....ntions and gone through the record carefully. Section 32 of the Income Tax Act has directed bearing on the controversy, and therefore, it is imperative upon us to take note of relevant part of this section. It reads as under 32. (1) In respect of depreciation of- (i) buildings, machinery, plant or furniture, being tangible assets; (ii) know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets acquired on or after the 1st day of April, 1998, owned, wholly or partly, by the assessee and used for the purposes of the business or profession, the following deductions shall be allowed- 9. A perusal of the above would indicate that in order to claim depreciation under section 32 of the Income Tax Act, the assessee has to demonstrate that it has owned an asset wholly or partly, and such asset has been used for the purpose of business or profession. Thus, for the purpose of controversy in hand, it is to be ascertained whether both the assessees were able to prove on record that they have acquired the assets before end of the accounting year, and such assets have....