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TMI Blog2016 (9) TMI 1329X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee suo mottu in assessment year 2007-08 and secondly by the AO in assessment year 2005-06 and 2006-07 which is not correct in terms of provision of the Income Tax Act, 1961 as the same disallowance cannot be made twice. The depreciation has to be allowed in one year. Moreover, while framing the assessment u/s 143(3) read with section 147, the AO has not carried out any rectification in respect of assessment year 2007-08 or nor any such direction was given by ld.CIT(A). In view of this, it would be reasonable and proper if the disallowance as made by the AO in AY 2005-06 is deleted. - Decided in favour of assessee. - I.T.A. No.2167 and 2168/Mum/2013 - - - Dated:- 15-9-2016 - SHRI SHAILENDRA KUMAR YADAV, JM AND SHRI RAJESH KUMAR, AM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery by ₹ 3, 19,20,515/in the books at account, while calculating depreciation u/s.32, it had neither reduced from the block the WDV of plant and machinery destroyed by fire nor credited the amount receivable in insurance claim. Accordingly, excess depreciation to the tune of ₹ 87,27,7831- has been allowed. There is a failure on the part of the assessee to explain full and true disclosure of particulars of income for A. Y. 2005-06. 2. I have therefore reasons to believe that the income of ₹ 87,27,783/-has escaped assessment under the provisions of Income-tax Act, 1961 for the A. Y 2005-06 and remedial action by issuance of notice u/ s. 148 will be appropriate in the case because all the conditions for issue of such no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear 2005-06. The AO not finding the reply of the assessee convincing and satisfying came to the conclusion that the machinery destroyed in the fire cannot be said to have been in existence by the said period, and therefore was not put to use, and thus no claim of depreciation can be entertained thereon. Accordingly, the AO disallowed and added a sum of ₹ 87,27,783/- on account of disallowance of depreciation which is calculated as under : WDV as on 1.4.2004 Additions Deletion Dep.allowed Dep.Allowable Excess Dep.Allowed Less than 180 days More than 180 days 99,13,963 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... truction. In view of this, the monies received towards the assets destroyed which are forming part of the block of assets should be reduced in this A.Y. from the WDV and only on the balance amount of WDV, depreciation should be granted for this AY. The AO is directed to rework the depreciation accordingly from AY 2005-06 and for later assessment years. 3.15 It. is seen that the A.O. has reduced the entire cost of the assets destroyed from the WDV and this action is not in accordance with the Income tax Law. The A.O. is directed to rework the disallowance as per my directions contained in the earlier para. Before concluding I also wish to point out that in view of the clear provisions of section 43(6) (c) (i) (B), it is cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The claim was received in the assessment year 2006-07 and 2007-08. We find that the amount of ₹ 1 crore was received by the assessee on 15.9.2005 and final payment of ₹ 1,49,43,705/- was received on 13.4.2006. Since the assessee was not having the details of the claim finally settled and therefore the same could not be reduced in the assessment year 2005-06 and 2006-07 and when the assessee received the details from the Insurance Company. The assessee reduced the same from the block of assets. Now, the issue before us is whether the assessee has rightly accounted for claim received from the Insurance Company for plant and machinery and fixed assets or the same should have been accounted for in AY 2005-06 and 2006-07. Having co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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