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TMI Blog2024 (10) TMI 517X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee, how the assessee is entitled to claim of depreciation u/s 32 (1) - AO may examine the same and decide the issue afresh. Addition towards unexplained sale application money - the claim of the assessee that there are no fresh credits during the year is apparent. However, as AO in the assessment order has specifically stated that the reason addition during the year and the same amount has been added as unexplained cash credit u/s 68 of the act. Neither the AR nor the learned departmental representative could explain how the above figure is arrived at. Further the learned CIT - A also not considered that how the amount has been arrived at by the learned assessing officer. Without examining the fact that whether the assessee has received any sum during the year or not, he has confirmed the addition u/s 68 of the act. The learned CIT A also did not consider the facts stated by the assessee that the share capital of the assessee company remains unchanged for last 3 years. Therefore, we set-aside the whole issue back to the file of the learned assessing officer within direction to the assessee to substantiate before the learned assessing officer that there are no credits in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue of notice under section 143 (2) of the act on 27/9/2012. 04. Assessee was issued notices under section 142 (1) on 5/6/2013 which was not complied with. AO further issued several notices however, the same were not complied with and no information was provided. Thus, the AO held that numbers of opportunities were provided to the assessee to furnish the documentary evidences in support of its return of income however, assessee has not submitted anything. The learned AO noted that in the annual accounts there was a note that as there was no commercial operation for the company during the year, quantitative details of sales and information as required under paragraph 3 and 4C of part II of schedule VI to the companies act, 1956 is not applicable. Further, on verification of the profit and loss account the learned AO also observed that the assessee has not shown any income for the year under consideration. However it was noted that assessee has claimed various expenditure under various heads and depreciation of ₹ 4,831,712/ . In the computation of income they assessee has added back the depreciation under the companies act of ₹ 4,793,682/ against the said expenditure of & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax act but rejected it for the reason that according to the notes to accounts there was no commercial operation for the company during the year, in the profit and loss account there is no revenue therefore the assessee has not proved that the said assets were used for the business purpose during the relevant assessment year or not. With respect to the addition under section 68 of the income tax act of share application money and membership fees he considered the explanation of the assessee and confirmed the addition as assessee has not brought on record anything that this amount was genuinely received from genuine identifiable person/members through banking channel and and the members were contributing own funds towards subscription. As the assessee has failed to show the above details the addition made by the learned assessing officer was upheld. 07. Assessee aggrieved with the appellate order preferred the appeal before us. The learned authorised representative referred to the 109 pages paper book submitted before us. With respect to disallowance of depreciation he submitted that there is an opening block of assets at the beginning of the year, no new assets were purchased durin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocks of assets. 09. We have carefully considered the rival contention and perused the orders of the lower authorities. The facts clearly shows that during the course of assessment proceedings the assessee did not appear before the learned assessing officer despite issue of several notices. Even the notices for non-compliance were also issued. However on appeal before the learned CIT A assessee made submissions which were considered. 10. There are only to substantive issues in this appeal. As per ground number 2 and 3 assessee has challenged the disallowance of depreciation under section 32 of the income tax act of ₹ 4,793,682/ . By ground number 4 7 assessee has challenged the addition of ₹ 41,544,689 towards unexplained sale application money. 11. On the first issue of the depreciation it is apparent that assessee has claimed depreciation of ₹ 12,201,055 during the year. The details of the depreciation is stated in the computation of total income is comprising of block of building, furniture and fittings, plant and machinery and computer. There is no addition or deletion during the year. It is also a fact that in the profit and loss account there is nil income sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 46,434,698/ and which also remain the same as on 31/3/2011. Thus it is apparent that there is no fresh credit during the year in either of the two accounts. Therefore the claim of the assessee that there are no fresh credits during the year is apparent. However, as the learned assessing officer in the assessment order has specifically stated that the reason addition of ₹ 41,544,698/ during the year and the same amount has been added as unexplained cash credit under section 68 of the act. Neither the learned authorised representative nor the learned departmental representative could explain how the above figure is arrived at. Further the learned CIT A also not considered that how the amount of ₹ 41,544,698/ has been arrived at by the learned assessing officer. Without examining the fact that whether the assessee has received any sum during the year or not, he has confirmed the addition under section 68 of the act. The learned CIT A also did not consider the facts stated by the assessee that the share capital of the assessee company remains unchanged for last 3 years. Therefore, we set-aside the whole issue back to the file of the learned assessing officer within directio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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