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2009 (10) TMI 71 - ITAT DELHI-BClaim of depreciation on fixed assets - written off - AO was of the opinion that since the fixed assets were not found on physical verification, the assessee could not be allowed to get the benefit of depreciation on the fixed assets and thus made an estimated disallowance of these fixed assets @ 20 per cent and added to the total income of the assessee resulting in an addition. CIT(A) disagreeing with the submissions of the assessee upheld the order of AO but restricted the disallowance to 10 per cent in place of 20 per cent made by the AO. HELD THAT:- We find that the assessee has furnished the details of the fixed assets as well as the value of the fixed assets written off but has not given the scrap value of the written off assets nor has informed whether these have been sold then sale value and in case not sold then their scrap value estimated by it. It means that in case, some assets, which formed part of the block of assets, are discarded or destroyed or sold or written off their WDV is to be reduced from the WDV of the block of assets for the purposes of computing depreciation and not the WDV of individual assets by working out the same item-wise. Therefore, the scrap value of the assets, which have been written off, discarded during the year. is to be reduced from WDV for the purpose of granting depreciation. In this view, we direct that in the light of the decision, the AO should recompute the depreciation only after ascertaining the scrap value of the assets, which have been discarded or written off in the books during the year under consideration. Accordingly, the orders of tax authorities below in this regard are set aside and the AO is directed to recompute the depreciation of the entire block of assets, as directed hereinabove, as well as, as per observations of the Tribunal in the decisions. The ground No. 2 of appeal taken by the Revenue is rejected and ground No. 2 of the appeal of the assessee is allowed in the manner mentioned hereinabove in this order. Deduction claimed u/s 10A - CIT(A), the assessee fulfills all the requirements of s. 10A and is covered within the definitions given in Expln. 2 (vii) to this section and, therefore, he restored the exemption denied by the AO and allowed the appeal of the assessee and deleted the impugned addition made by the AO. HELD THAT:- The assessee, there is the approval of Government of India which indicates that the assessee's unit would be located in Gurgaon. Hence, we are of the opinion that the CIT(A) in his well reasoned and well discussed order after analyzing the provisions of s. 10A as well as the notification and subsequent approvals of the Government of India in the case of assessee has rightly concluded that the assessee fulfils all the requirements of s. 10A and is covered within the definition given in Expln. 2(vii) to this section and so the CIT(A) rightly held that the assessee is entitled to exemption claimed under s. 10A of IT Act and has further rightly deleted the impugned addition. Accordingly, the order of CIT(A) in this regard is upheld. Ground No. 1 of the appeal of the Revenue is rejected. Levy of Interest under ss. 234A, 234B and 234D - respectfully following the decision of the Tribunal in the case of ITO vs. Ekta Promoters (P) Ltd.[2008 (7) TMI 452 - ITAT DELHI-E] this issue is decided in favour of assessee and against the Revenue and consequent upon the same the order of CIT(A) in this regard is set aside and this part of ground No. 3 of the appeal of assessee stands allowed. During appellate proceedings, learned Authorised Representative for the assessee has not advanced any arguments on the legal issue involved in ground No. 1 of the appeal of the assessee and so it is presumed that the assessee in fact has not pressed this ground before us. Otherwise also, we have decided the appeal of the assessee on merits and so decision on this legal issue is merely academic one. In the circumstances stated above, ground No. 1 of the assessee stands rejected. In the result, the appeal filed by the assessee is partly allowed and appeal filed by the Revenue is dismissed.
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