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2013 (3) TMI 876
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.... erred in following the decision of her predecessor for A.Y. 2002-2003, ignoring the fact that in A.Y. 2003-04 same was reversed by the CIT(A). ITA/118/NAG/2011-AY. 2007-08 i). On the facts and circumstances of the case, the learned CIT(A) erred in allowing 100% depreciation on mining and drilling accessories as against 15% allowed by the A.O. ii.) On the facts and circumstances of the case, the CIT (A) erred in equating mining and drilling accessories with sand stowing pipes and allowing 100% depreciation. iii). On the facts and circumstances of the case, the CIT (A) erred in following the decision of her predecessor for A.Y. 2002-2003, ignoring the fact that in A.Y. 2003-04 same was reversed by the CIT(A). iv). On the facts and circumstances of the case, CIT(A) erred in allowing unabsorbed depreciation of Rs. 21,66,16,015/-. v). Any other ground of appeal may be urged at the time of hearing. ITA/52/NAG/2012-AY. 2008-09 i). On the facts and circumstances of the case, the learned CIT(A) erred in allowing 100% depreciation on mining and drilling accessories as against 15% allowed by the A.O. ii). On the facts and c....
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....wed 15% depreciation office appliances instead of 10%. ITA/42/NAG/2012-AY.2008-09 1. The learned CIT(A)- has erred in upholding the A.O's action of not allowing depreciation on office appliances @ 15% claimed by the assessee company after holding the items of office appliances as office furniture and allowed depreciation @ 10% instead. The learned CIT(A)-I has erred in confining the stand of A.O. for not treating office appliances as "Plant". The learned CIT(A)-I ought to have allowed 15% depreciation on office appliances instead of 10%. 2. The learned CIT(A)1 has erred in upholding A.O's stand of disallowance of prior period expenditure of Rs.3,65,000/ claimed by the assessee in the Profit & Loss Account. The 1earned CIT(A)-I has erred in concluding that the assessee by accounting prior period expenses in the impugned year pertaining to the earlier year has not adhered to the principles of the mercantile system of accounting and the claim of such expenditure would result in distorting the profit of years. In the facts and circumstances of the case and the submission offered during the course of hearing, the prior period expenditure ought to have....
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....r 100% depreciation. Finally, he allowed depreciation @ 25% on accessories related with the Mining and Drilling and addition of Rs. 41.61 lakhs was made. Assessee preferred an appeal before the First Appellate Authority (FAA). 4. After considering the submissions of the assessee, order of the AO and the order of his predecessors for the AY 2002-03, FAA held that in the earlier year, appellant's claim with regard to 100% depreciation was allowed on the basis of Rule 5 of old Appendix-I, that the same was applicable only upto AY. 2002-03, that the old Appendix was not applicable for the year under consideration, that the appellant had failed to substantiate its claim with regard to 100% depreciation on Drilling and Mining Accessories, that the AO had rightly disallowed claim made under the head depreciation holding that the said items were included in Plant & Machinery, that depreciation allowed @ 25% was as per the provisions of the Act. Finally, FAA upheld the order of the AO and restricted the depreciation of aforesaid items to 25%. 4.1. Similar view was taken by the FAA with regard to structure made of steel. FAA held that her predecessor had allowed the appellant's claim @....
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....sessee, AO held that Desert Cooler, Air Conditioner, Water Cooler, Aqua Guard and Wall Clock could not be categorised under the head 'Plat and Machinery', that depreciation @ 15% was allowable only for the office appliances, that these items were similar to the Furniture and Fixtures, that assessee was entitled to claim depreciation @ 10% only. As a result, an addition amounting to Rs. 1.95 Lakhs was made to the income of the assessee. Assessee preferred an appeal before the FAA. 7.1. After considering the submissions of the assessee, FAA held that in the depreciation schedule available in the Income Tax Rules, 1962 there were separate heads on which depreciation was allowable depending on the nature of the Plant & Machinery, that AO had allowed the depreciation as per Appendix-I r.w.s. 5, that items like Air Conditions etc., were part of Furniture and Fixtures, that that in the case under consideration same were installed in the office premises. Finally, FAA upheld the order of the AO. 7.2. Before us, AR submitted that depreciation should be allowed @ 15%, that items in question were part of Plant & Machinery. DR submitted that the items in dispute could not be treated as pa....
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....pal and primary use for which the goods are required and for which the same are capable of being used. The third test is what is known as the commercial test in seeing how the articles or goods are known in the world of "trade and commerce". On application of any of these tests it is difficult to agree that the electrical fans and air conditioners would be office appliances. By no stretch of imagination in "trade and commerce" or in popular parlance can they be said to be office appliances or equipments. Merely because these appliances are fixed in office premises they do not become, by that fact, office appliances. They are capable of being adopted for the purposes for which they are meant, namely, for maintaining a particular bearable climatic temperature in laboratories, workshops, surgical and nursing homes and even in private residential buildings." 7.4. We find that the assessee had not, before the AO or the FAA, produced any evidence to prove that items in question were directly link with production/processing and hence could be treated as Plant and Machinery. In these circumstances, we are of the opinion that order of the FAA does not suffer from any legal infirmity. As ....
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.... Tribunal)]. DR submitted that treatment give by the assessee for prior period expenses was not as per the matching number. 11. We have heard the rival submissions. There is no doubt that assessees, following the Mercantile system of accounting should take care of all expenses of that particular AY while preparing the Books of Accounts of the relevant period. But there are certain circumstances where the liabilities/expenses crystalise after the 31st March of that particular year. Prior period expenses are not a new phenomenon in the filed of accounting or taxation laws. Courts are of the view that if the expenditure incurred in particular year are crystalised in a subsequent year because of certain reasons, same cannot be dis-allowed only on the ground that assessee is following Mercantile system of Accounting. If assessee is following a particular system of accounting and it is not distorting income, treatment of prior period expenses loses its importance. In the case under consideration, assessee was following the same system for the last so many years and the AO was allowing the prior period expenses for the relevant years. AO/FAA has not challenged the claim made by the ass....
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....in existence in respect of which such income or expenses relate, the mercantile system does not call for adjustment in the books of account on estimate basis. It is actually known income or expenses, the right to receive or the liability to pay which has come to be cryastallized, which is to be taken into account under the mercantile system of maintaining books of account. An estimated income or liability, which is yet to be crystallized, can only be adjusted as a contingency item but not as an accrued income or liability of that year. To illustrate, we find from the details of the expenses that certain expenses related to the fees paid to the experts, out of pocket expenses incurred by the consultation firm and discharge of liability on account of demurrage claimed by the port authorities. Such items without investigation into the facts about the crystallization of such dues cannot be disallowed merely on the ground that they relate to transactions pertaining to an earlier accounting year...." Respectfully following the above decisions, we decided Ground No.4 in favour of the assessee. As a result, appeal filed by the assessee for the AY 2008-09 stands partly allowed. ITA....
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....8 years only. He further held that on 1st day of AY 2007-08, un-absorbed depreciation for the AY 1997-98 was not available to be set-off as 8 years had already lapsed, that amended provisions of Section 32 w.e.f. 2002-03 had no relevance for the AY 1997-98. 13.1. Assessee preferred an appeal before the FAA. After considering the submission of the assessee and Assessment Order, FAA held that prior to 01-04-1997, un-absorbed depreciation of the previous year used to be claimed as current depreciation and would be allowed to be set-off against income from any other head, that an amendment was made to the provisions of Section 32(2) of the Act, w.e.f. 01- 04-1997, that because of the amendment treatment of un-absorbed depreciation underwent a change, that as per the amended provisions un-absorbed depreciation was no longer deemed to be part of current depreciation, that the period available for setoff of such un-absorbed depreciation from profits of subsequent years was restricted to 8 years, that during earlier period no such time limit was prescribed, that vide finance Act, 2001 the provisions of Section 32(2) were once again amended, that the position as it existed prior to 01-04....