2013 (7) TMI 735 - HC - Income Tax

Disallowance u/s 35D - Public issue expenses - Tribunal set aside disallowance - Held that - When Tribunal has merely remanded the issue for further consideration of the Assessing Officer with reference to the material on record - No question of law arises - Decided against Revenue. Deletion on account of bogus purchase - CIT sustained addition - Tribunal deleted addition on account of bogus purchase - Held that - The authorities below merely on going through the findings in earlier year followed the order for holding bogus purchases made by the assessee. The assessee explained before the learned CIT(A) that no sufficient opportunity was given to produce the documents on this issue, therefore, additional documents were filed at the appellate stage on which remand report from the AO was called for, but the AO has not given any finding against the assessee based on the additional evidences - Nothing is brought on record if any adverse findings were given by central excise authorities against the assessee for assessment year under appeal - in absence of any material against the assessee, such addition could not have been made - Decided against Revenue.

Issues involved:
1. Disallowance of depreciation on tangible assets
2. Addition made on account of bogus purchase
3. Disallowance made under section 35D of the Act and public issue expenses

Detailed Analysis:
1. Disallowance of Depreciation on Tangible Assets:
The High Court observed that the Tribunal remanded the issue for fresh consideration before the Assessing Officer based on the material on record. The Tribunal highlighted specific items for tangible assets recorded in a valuation report and directed the Assessing Officer to reconsider the depreciation on tangible assets. The Court noted that the Tribunal confirmed the grant of depreciation on intangible assets but set aside the refusal to grant depreciation on tangible assets. The matter was restored to the Assessing Officer for a reasoned decision considering the valuation report and evidence provided by the assessee. The Court held that since the Tribunal remanded the issue for further consideration based on the evidence, no question of law arose.

2. Addition Made on Account of Bogus Purchase:
Regarding the addition made on account of bogus purchase, the Tribunal set aside the view of the Assessing Officer and CIT (Appeals). The Court noted that the search conducted by the central excise department did not yield any incriminating material against the assessee for the relevant assessment year. The Tribunal found that the authorities below relied on findings from earlier years without sufficient opportunity for the assessee to produce documents. Additional documents were filed at the appellate stage, but the Assessing Officer did not provide any adverse findings based on the additional evidence. The Tribunal concluded that there was no justification to sustain the addition against the assessee, as no adverse findings were presented against the assessee. The Court upheld the Tribunal's decision to delete the addition, emphasizing that the addition lacked any basis or supporting evidence.

3. Disallowance under Section 35D of the Act and Public Issue Expenses:
The Court briefly mentioned that a similar question had been considered in a previous Tax Appeal, where the issue was remanded for the Tribunal's consideration. Consequently, the Court issued a notice for the final disposal of the appeal specifically for the consideration of the disallowance made under section 35D of the Act and public issue expenses. The judgment did not provide detailed analysis or conclusions on this issue, as it was reserved for further consideration by the Court.

Overall, the High Court's judgment addressed the issues of disallowance of depreciation on tangible assets and addition on account of bogus purchase in detail, emphasizing the importance of evidence and proper consideration by the authorities involved in the assessment process.

← Previous Next →