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Issues involved: Appeal challenging order of CIT(A) regarding disallowance of depreciation on fixed assets, appeal regarding addition made on account of incorrectness and incompleteness of books of account, and appeal regarding direction to allow carry forward of brought forward losses of earlier years without basis.
Issue 1: Disallowance of depreciation on fixed assets The revenue appealed against the CIT(A)'s decision to delete the addition of Rs. 4,26,936 made on account of disallowance of depreciation on fixed assets. The Assessing Officer disallowed 50% of the depreciation claimed by the assessee based on auditors' comments and nature of business. However, the first appellate authority found that the fixed assets were duly reflected in the balance sheet with no new additions. The assessee had regularly claimed depreciation on all assets since inclusion in the balance sheet. The Tribunal noted that the revenue did not provide evidence to counter the factual findings in the impugned order. Considering the tax effect and lack of evidence, the appeal of the revenue was liable to be dismissed. The decision was supported by a previous Tribunal case involving R.K. Hotels (ITA No.383/Ind/09). Issue 2: Incorrectness and incompleteness of books of account The revenue appealed against the addition made on account of incorrectness and incompleteness of books of account. The Tribunal noted a typographical error in the figure mentioned in the appeal grounds, with the correct amount being Rs. 3,94,732 instead of Rs. 6,37,206. The tax effect was below the prescribed monetary limit for filing the appeal. The Tribunal decided to dismiss the revenue's appeal based on the tax effect and the insertion of sec. 268A in the Act. The decision was in line with Board instructions specifying monetary limits for filing appeals before various courts and tribunals. Issue 3: Direction to allow carry forward of brought forward losses The revenue challenged the direction of the first appellate authority to allow carry forward of brought forward losses of earlier years without basis. The revenue contended that no basis was provided for the decision, and the Assessing Officer rightly disallowed it due to lack of proof from the assessee. However, the first appellate authority found that all previous years' returns were duly filed and available in the Assessing Officer's records. The Tribunal agreed that the assessed loss, not set off, should be allowed as per section 72. Citing relevant judicial pronouncements, the Tribunal found no infirmity in the first appellate authority's decision and dismissed the revenue's appeal.
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