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TMI Blog2019 (1) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration, the principle of ‘block of assets’ would be applicable. It is now well settled that once an asset enters the particular block of assets and depreciation granted thereon for the whole block as such, the concerned asset loses its identity - condition of ‘put to use’ should be tested only in the year of installation or purchase and not thereafter. Hence we hold that the depreciation is allowable on the entire block of assets in the instant case. In any case, the basis adopted by the authorities below of disallowing 50% of depreciation claimed is not in accordance with law.- Decided in favour of assessee. Disallowance of miscellaneous expenses - assessee company was declared as a sick industrial company - Held that:- We find that the mistake committed in the annual report had been duly pointed out and brought to the notice of the AO in the original assessment proceedings itself vide written submissions dated 26.10.1998, which has been summarily ignored by the AO. We find that the same had been duly appreciated by the CIT-A by holding that the correct printing charges is only ₹ 7.76 lakhs and that the same is not to be considered as abnormally very high. As argue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upheld by the ld CITA in first appeal. On further appeal preferred by the assessee company before this tribunal, the same was disposed off by this tribunal in ITA Nos. 1353 to 1355 (Kol) of 2003 dated 30.4.2004 for the Asst Years 1994-95 , 1996-97 and 1997-98 by setting aside the issue to the file of the ld AO afresh in accordance with law. Pursuant to the said order, the impugned assessment was framed by the ld AO. In the said assessment, the ld AO observed that on perusal of the tax audit report, it appears that the excise duty of ₹ 52.43 lakhs had not been provided on uncleared finished goods for the purpose of valuation of closing stock. The ld AO felt that it is a well settled fact that sicne the assessee company is following mercantile system of accounting, liability is incurred as soon as the excisable goods are manufactured or produced but not at the time of clearance of finished goods. He held that since the assessee company had not provided for the excise duty on closing stock of finished goods, the excise duty amounting to ₹ 52.43 lakhs requires to be added back to the total income and which would be allowable as deduction only in the year of payment u/s 43B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue Appeal for Asst Year 1996-97 The brief facts of this issue are that the ld AO observed that during the relevant Asst Year, the assesee company had claimed depreciation for ₹ 22,50,396/-. On perusal of the record, it appears that during the relevant period, only three units of the company remained in operation and all other units remained closed. He observed that as per provisions of section 32 of the Act, depreciation is allowable on fixed assets which were put to use during the relevant period. Since during the previous year, only three units of the assessee company were in operaetion, hence in absence of details, 50% of depreciation claimed was disallowed in the sum of ₹ 11,25,198/- by the ld AO. The ld CITA observed that though depreciation is allowable on block of assets only if production is contained in the same unit. Profit is determined unit wise. If any unit has stopped production, depreciation would not be allowable on its assets. The ld CITA held that the ld AO had disallowed only 50% of depreciation claimed by the assessee as the assessee could not furnish separate list of assets, which requires no interference. Aggrieved, the assessee is in app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly shown as ₹ 108.75 lakhs in Schedule -5 of Annual Report and that the correct amount was only ₹ 7.76 lakhs. This fact was completely ignored by the ld AO in the set aside assessment also. The ld CITA duly appreciated the same and held that correct printing charges is only ₹ 7.76 lakhs and that the same is not abnormally high and accordingly deleted the disallowance made in the sum of ₹ 100.99 lakhs towards miscellaneous expenses. Aggrieved, the revenue is in appeal before us. 4.1. We have heard the rival submissions. We find that the mistake committed in the annual report had been duly pointed out and brought to the notice of the ld AO in the original assessment proceedings itself vide written submissions dated 26.10.1998, which has been summarily ignored by the ld AO. We find that the same had been duly appreciated by the ld CITA by holding that the correct printing charges is only ₹ 7.76 lakhs and that the same is not to be considered as abnormally very high. It was argued that since the assessee is already declared as a sick industrial company and most of its units are closed , the papers containing documents and evidences are dislocated and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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