TaxTMI 
TaxTMI 
2021 (6) TMI 287
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....g Officer (Ld. A.O.) and the Commissioner of Income Tax (Appeals) [CIT(A)J has erred in not following the directions given by the Hon'ble ITAT. 2. On the facts, in the circumstances of the case & in law, the Learned CIT(A) has erred in upholding the disallowance of depreciation of Rs. 2,74,85 8/- made by learned Assessing Officer (A.O.) in respect of Fixed Assets on the pretext of there being no business during the year under appeal, whereas the said fixed assets were already put to use in business in the preceding previous year so the same formed a part of the block and they were used in the current year as well. 3. The learned C I T (A) has further erred in upholding the disallowance made by the Id. A O of total busi....
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....rder dated 26-12-2006 determining the total income at Rs. 8,30,680/- by holding the receipt from business as unexplained credit under section 68 of the Act on the reasoning that the assessee has not carried out any business activity during the year. While doing so, the assessing officer also disallowed various expenditure/deduction claimed against the business income. Assessee challenged the aforesaid decision of the assessing officer before the first appellate authority and thereafter before the Tribunal. Vide order dated 08-05-2013, the Tribunal restored the matter back to the assessing officer for fresh adjudication with certain directions. In pursuance to the directions of the Tribunal, the assessing officer framed a fresh assessment an....
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....banking channel with the permission of Reserve Bank of India (RBI). Further, he submitted, the salary paid to technical persons for developing software and payment of electricity bill clearly demonstrates that the assessee was carrying on business activity. He submitted, being completely swayed away by the report submitted by the Ward Inspector of the department and without making proper enquiry, the assessing officer has repeated the same addition. He submitted, since the assessee has furnished all supporting evidence to demonstrate carrying on business activity, the income shown under the head 'business' has to be accepted and the deduction claimed on account of depreciation, the expenses has to be allowed. Further, he submitted, assessee....
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.... carried on activity of software development, the assessing officer had deputed the Inspector to conduct a field enquiry. In the report submitted, the Inspector has specifically stated that on a visit to assessee's business premises, he found that no business activity was carried on inside the premises and only some black and white television sets and electronic components were kept. Further, from local enquiry, he found that no business activity is being carried on from the said premises for last five to six years. 9. Refuting the allegations made by the Inspector in his report, the assessee had furnished submission dated 03-07-2013 before the assessing officer stating that portion of the said premises and for carrying out such activity....
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.... has again submitted that a part of the premises was given to, the erstwhile owner for storage of its material. It is not understood, when the assessee has purchased the premises along with all the items like electronic components, TV sets, etc. where is the question of again allowing the erstwhile owner to store its materials. Further, the assessee has submitted that a part of the premises was let out to Crystal Software Solutions Ltd. Thus, the assessee has not come out clear on facts. 11. Further, we find various doubts raised by the assessing officer with regard to the technical capability of the concerned employees for developing software, lack of infrastructure, etc. have not been properly addressed by the assessee. At the same tim....
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....transaction. If the assessee has continued with such business activity in subsequent years, then assessee's claim can be accepted. However, all these aspects need to be properly enquired into by the departmental authorities, which appear to have not been done. 13. In view of the aforesaid, we are inclined to restore the issue to the learned Commissioner of Income Tax (Appeals) for fresh adjudication after due opportunity of being heard to the assessee. The assessee is also permitted to bring fresh evidence on record to establish its claim of carrying on the business activity of software development. Learned Commissioner of Income Tax (Appeals) would be free to conduct proper enquiry either by himself or get it done through the assessing ....