9911796707
TMI Blog2023 (4) TMI 1117X X X X Extracts X X X X X X X X Extracts X X X X ..... ided that any amount of interest paid in respect of capital borrowed for acquisition of an asset, shall not be allowed as deduction till the date on which, such asset was first put to use. As per the assessee itself, the machinery purchased was put to use in February, 2007 and this fact was not noticed by the AO while passing the impugned order - In the said order, 100% depreciation was given by taking the date of putting the machinery to use by 21.08.2006. Assessee had produced the Fixed Assets Register for the financial years 2005-06 and 2006-07 showing the date of purchase, installation and date of put to use of these assets; certificate of M/s Power Tracks approved Chartered Engineers, to prove the date of installation of the new ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whereby appeal filed by the respondent-assessee against the order dated 03.11.2014 passed by the Commission of Income Tax (Appeal), has been allowed. The respondent-assessee company is a manufacturer and exporter of terry towel. For the assessment year 2007-08, the assessee filed its return of income at a total income of 'NIL' claiming loss of Rs. 86,40,279/-. Consequently, assessment under Section 143 (3) of the Act (Annexure A-1) was framed on the assessee and disallowance on account of interest paid on capital work in progress was made under Section 36(1)(iii) of the Act on account of fact that the assessee had shown an amount of Rs. 6,43,261/- as capital work in progress in the balance sheet. Thereafter, reassessment proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med amounting to Rs. 1,94,75,052/- on account of machinery being put to use in March, 2007. In this order, it was stated that the assessee had added assets of Rs. 13,33,68,281/- during the year under consideration and they were put to use only in February, 2007, interest of which worked out to Rs. 68,16,891/-, which was capitalized upto February, 2007 and was required to be added to the cost of the assets. The assessee had claimed full depreciation and additional depreciation of substantial part of addition, which otherwise was allowable @50% due to less than 6 months use. Depreciation on plant, machinery and electrical installation was reworked. The assessee was allowed excess depreciation of Rs. 1,94,75,052/-. This depreciation was found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Keeping in view this evidence, proceedings under Section 154 of the Act were rightly initiated as this finding of fact was based upon the evidence given by the assessee himself and it did not require further investigation. This issue was neither debatable nor required further investigation. She has also referred to the observation made by the Tribunal that the Fixed Assets Register for the financial years 2005-06 and 2006-07 showing the date of purchase, installation and date of put to use of these assets, certificate of M/s Power Tracks approved Chartered Engineers, to prove the date of installation of the new plant and machinery, certificate of Central Excise Department regarding installation of new plant and machinery, showed that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act, the assessee had claimed benefit of depreciation for the whole year for purchase of new machinery. Reference was made to Section 36(1)(iii) of the Act, which provided that any amount of interest paid in respect of capital borrowed for acquisition of an asset, shall not be allowed as deduction till the date on which, such asset was first put to use. As per the assessee itself, the machinery purchased was put to use in February, 2007 and this fact was not noticed by the Assessing Officer while passing the impugned order dated 04.06.2013 (Annexure A-3). In the said order, 100% depreciation was given by taking the date of putting the machinery to use by 21.08.2006. The assessee had produced the Fixed Assets Register for the financial ..... X X X X Extracts X X X X X X X X Extracts X X X X
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