TaxTMI 
TaxTMI 
2025 (8) TMI 517
X X X X Extracts X X X X
X X X X Extracts X X X X
....iled by assessee against the order u/s. 143(3) r.w.s. 263 of the Income-tax Act, 1961 (the Act) dated 26.12.2011 passed by the ACIT, Circle 2(2), Ernakulam [ld. AO] was partly allowed. 2. The assessee is aggrieved with the same and has preferred this appeal raising the following grounds: - "1. The order of the CIT(A), National Faceless Appeal Centre (NFAC) issued under section 250 of the Income Tax Act discussing the grounds relating to valuation of closing stock, disallowance of section 47(XIII) and claim of depreciation is erroneous on facts and in law. 2.(i) Whether on facts CIT(A) was right in disallowing the claim u/s.47(XIII) of the IT Act, since the appellant had complied with all the requirements of the said sec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uced at the time of hearing, the order of the CIT(A) requires to be modified." 3. The brief facts of the case show that assessee is engaged in the business of development and sale of software as partnership firm, whose assessment was completed u/s. 143(3) r.w.s. 147 of the Act on 26.12.2008 at a net loss of Rs. 22,90,188. The above assessment was revised by the CIT-II, Kochi by order u/s. 263 of the Act dated 03.3.2011 setting aside assessment already passed u/s. 143(3) r.w.s. 147 dated 26.12.2008 for redoing the same. Subsequently notices were issued u/s. 143(2) on 27.11.2011. 4. During the assessment proceedings it was found that assessee firm over the years had developed a software called 'Quadra software' and for this AY this was ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of ld. lower authorities. 9. Ground nos. 1 & 2 are general in nature and therefore dismissed. 10. Ground 3 is with regard to addition of Rs. 57 lakhs. The facts show that assessee has developed a software inhouse by the name 'Quadra' software which is used in building construction by builders & real estate developers. Assessee developed it 'in - house' and expenditure for such development was recovered from the customer for whom it was developed. AS the software found acceptance, the assessee revalued the software at a value of Rs. 57 lakhs which was credited to the capital account of the partners. The ld. AO added the same to the total income of assessee. Same was also confirmed by the ld. CIT(A). We find that there is neither trans....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s. The ld. AR has categorically stated that in this case depreciation is considered till the date of transfer i.e., upto 31.12.2004 and such details are furnished to the ld. lower authorities. Before us also at page 105 assessee has furnished such details. On verification of the same, it is found that allowance of depreciation is claimed only for part of the year in terms of 5th proviso to section 32(1) of the Act. The ld. AO is directed to verify the same and grant depreciation in accordance with law. Accordingly ground no. 4 of assessee is allowed with above direction. 12. Thus, ITA No.268/Coch/2023 for AY 2005-06 is partly allowed. 13. ITA No.269/Coch/2023 is filed by assessee against the appellate order passed by the ld. CIT(A) da....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ns. It was contested that reopening is invalid. 18. The ld. DR supported the order of lower authorities. 19. We have carefully considered the rival contentions and perused the orders of ld. lower authorities. The impugned assessment year is 2005-06. The assessee filed its return of income on 26.5.2006. Subsequently vide notice u/s. 148 of the Act dated 10.7.2007 reopening of the assessment was made for the reason that the balance sheet and P&L account did not comply with generally accepted accounting principles and further these accounts have neither been audited or reviewed by the auditor. All these were communicated to the assessee on 21.11.2008. Notice u/s. 143(2) was also issued. Based on these reasons, no addition was made on acc....