TaxTMI 
TaxTMI 
2024 (10) TMI 517
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....o have appreciated that depreciation u/s 32 of the Act is allowable once the asset is kept ready for its use in the earlier year(s) Le. prior to the assessment year under consideration. 4. The Ld. CIT(A) erred in upholding the addition of Rs. 4,15,44,689/- towards Unexplained Share Application Money. 5. The Ld. CIT(A) ought to have appreciated that the assessee company has not accepted any share application money during the financial year relevant to the assessment year under consideration. 6. The Ld. CIT(A) ought to have appreciated that no addition to the share capital has been made during the year under consideration. 7. The Ld. CIT(A) ought to have appreciated from the balance sheet that the amounts mentioned in Reserves & Surplus and Membership fees are brought forward figures and that there is no fresh increase during the year under consideration. 8. The appellant may add, alter or modify or substitute any other point to the grounds of appeal at any time before or at the time of hearing of the appeal." 03. Brief facts of the case shows that assessee is stated to be engaged in the business of training and education filed its retu....
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....d that assessee has shown said application money of Rs. 46,434,698/- which has been shown under the head membership as on 31/3/2011 and the same figure as on 31/3/2010. However on verification of the return of income for assessment year 2000 - 11 he found that assessee has shown said application money of Rs. 4,890,000/- only as on 31/3/2010. However as per the return filed as on 31/3/2011, the said application money was shown at Rs. 46,434,698/-. Therefore according to him there is an increase in the share application money/membership fees of Rs. 41,544,698 compared to the previous year. As the assessee has not furnished any information with respect to the above sum and no confirmation has furnished, he found that the above sum is required to be added under section 68 of the income tax act as unexplained cash credit. He made such addition. Accordingly the assessment order under section 143 (3) of the act was passed on 18/3/2014 determining total income of the assessee at Rs. 41,506,670 against the returned loss of Rs. 12,239,085/-. 06. Aggrieved with the assessment order, appeal was preferred before the learned CIT - A which was disposed of per order dated 19/12/2016. The learne....
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....ial year 2007 - 08 also wherein the identical sum is outstanding. He further referred to the order of the learned CIT - A where in this fact is admitted. Accordingly he submitted that both the additions are unwarranted. 08. The learned departmental representative vehemently supported the orders of the lower authorities. He submits that the assessee has not furnished any information before the learned assessing officer and therefore the addition is made under section 68 of the income tax act with respect to the membership fees and said application money. With respect to the depreciation he submits that argument of the assessee is unsustainable because assessee is not carrying on any business during the assessment year. The assessee has not fulfilled the basic condition of the user of the asset. He submits that the depreciation is claimed by the assessee on all block of the assets therefore the argument of the assessee that user is to be seen only in the year in which the assets enter into the Block is not relevant in this case. He submits that the depreciation is claimed on all the blocks of the assets which have not been used during the year. It is not the case of the assessee t....
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....fore the judicial precedents relied upon by the learned authorised representative does not help the case of the assessee. Further before the learned CIT - A assessee has raised several legal contentions, none of those decisions were considered by the learned CIT - A. The learned CIT - A merely referred to the notes to the accounts and confirmed the disallowance of depreciation. However as assessee did not get any opportunity of explanation before the learned assessing officer who passed an assessment order is assessee did not furnish details before him, in the interest of justice, we set-aside this issue back to the file of the learned assessing officer with a direction to the assessee to prove that in absence of any business activity carried on by the assessee, how the assessee is entitled to claim of depreciation under section 32 (1) of the act. The learned AO may examine the same and decide the issue afresh. 12. Coming to the second issue of the addition under section 68 of the income tax act it is apparent that share capital of the company does not have any increase during the year. The opening share capital was Rs. 4,990,800/- and the same remained at the close of the year.....