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TMI Blog2022 (7) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... t has stated, the pipes were used for carrying hazardous chemicals. Therefore, for safety considerations, such pipes have to be replaced when they are in fairly good condition to avoid the accident. For industries handling hazardous chemicals, it is not possible to wait till the conditions of the pipes deteriorate so much that leakages start. It was necessary for such industries to go for preventive maintenance Therefore, it can be presumed that the condition of the pipes replaced were fairly good from scrap value angle. Therefore the appellant's contention that the scrap was never sold and had little worth is not acceptable. The appellant could not explain how much other materials such as nuts, bolts, brackets, sockets consumed f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, we proceed to dispose off these appeals ex parte qua the assessee, after hearing the learned Departmental Representative ( learned DR ) and on the basis of material available on record. 3. Since both these appeals pertained to the same assessee and the issue involved is also common, therefore, these appeals were heard together and are being disposed off by way of this consolidated order. Further, as the basic facts in both the appeals are same, except with variance in figures, we have elaborately mentioned only the facts for the first assessment year (i.e. 2014-15) before us, for the sake of brevity 4. The only grievance of the assessee in both the appeals is against the disallowance of depreciation of plant and machinery claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asked to justify as to for purpose these were used. Assessee stated that old tubes were rusted and hence these new tubes were purchased. Hence, assessee was asked to give details of labor charges and other material used for fitting these pipes/tubes. Assessee stated that replacement of pipes was done by the internal staff only. It is surprising that such technical work could be done by the internal staff only. 3. Assessee has also stated that this replacement was necessary as assessee had applied for N. Visa audit from Brazil, which is like US FDA. If certified by such audit, assessee would have got good business. But then, assessee states that factory is under possession of bank and hence such applications and relevant documents cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pugned order for the assessment year 2014-15, dismissed the appeal filed by the assessee observing as under:- 4.4.1 I have considered the rival contentions. The appellant has claimed that it had purchased SS pipes/tubes and replaced existing pipes in the factory. The appellant has added to the WDV of fixed assets a sum of Rs. 3,46,28,880/- which the appellant claimed was cost of the pipes/tubes. The AO has rejected the appellant's claim and held that no pipes/tubes had been actually purchased. I find that the appellant's claim is not acceptable for a number of reasons. The appellant could not produce the delivery challans to prove that the pipes/tubes were actually delivered in the appellant's factory. I also find that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would like to state that those pipes are heavily damaged and strap of the same are non-usable and kept at the plant only. The value of the scrap is very meagre and the appellant has never shown any scrap during the previous year relevant to assessment year 2014-15. Considering facts of the case, your honour will find that the asset is negligible value and the rusted pipes are kept with the appellant company only. 4.4.4 I have considered the contentions of the appellant. The appellant has stated that the scraps were kept with the appellant and were never sold. This is again very unconvincing. I find from indiamart that value of stainless steel pipe scrap is at least 20% of the cost of new pipes. As the appellant has stated, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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