Aditi Exports Pvt. Ltd.,, Ahmedabad v. The DY.CIT(OSD) Range-1,, Ahmedabad

ITA 391/AHD/2007 | 2004-2005
Pronouncement Date: 12-03-2010 | Result: Allowed

Appeal Details

RSA Number 39120514 RSA 2007
Assessee PAN AABCA6150F
Bench Ahmedabad
Appeal Number ITA 391/AHD/2007
Duration Of Justice 3 year(s) 1 month(s) 18 day(s)
Appellant Aditi Exports Pvt. Ltd.,, Ahmedabad
Respondent The DY.CIT(OSD) Range-1,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 12-03-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 12-03-2010
Date Of Final Hearing 04-03-2010
Next Hearing Date 04-03-2010
Assessment Year 2004-2005
Appeal Filed On 24-01-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH D DD D BEFORE BEFORE BEFORE BEFORE SHRI BHAVNESH SAINI SHRI BHAVNESH SAINI SHRI BHAVNESH SAINI SHRI BHAVNESH SAINI JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER AND SHRI N.S. SAINI ACCOUNTANT MEMBER AND SHRI N.S. SAINI ACCOUNTANT MEMBER AND SHRI N.S. SAINI ACCOUNTANT MEMBER AND SHRI N.S. SAINI ACCOUNTANT MEMBER DATE OF HEARING:04/03/2010 DRAFTED ON: 04/03/20 10 ITA NO . 391 /AHD/ 20 0 7 & 1892/AHD/2008 ASSESSMENT YEAR : 2004-2005 2002-2003 ADITI EXPORTS PVT. LTD. B/2 RIDDHI SIDDHI BUNGLOW RAMDEV NAGAR CHAR RASTA SATELLITE AHMEDABAD-380015. VS. DCIT (OSD) RANGE: 1 3 RD FLOOR JITENDRA CHAMBERS NEW RBI LANE AHMEDABAD-380 014. PAN/GIR NO. AABCA 6150 F (A PPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI S.N.SOPARKAR A.R. RESPONDENT BY: SHRI C.K.MISHRA SR. D.R. O R D E R O R D E R O R D E R O R D E R PER N.S.SAINI ACCOUNTANT MEMBER :- THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-X AHME DABAD DATED 07/12/2006 AND LEARNED COMMISSIONER OF INCOME TAX (A PPEALS)-V AHMEDABAD DATED 03.04.2007. 2. THE GROUNDS OF THE APPEAL READS AS UNDER:- 1. THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS ): V AHMEDABAD [HEREINAFTER REFERRED TO AS CIT(A)] HAS GROSSLY ERRE D IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF DEPRECIATION OF RS.91 2 7 927/- IN ASSESSMENT YEAR 2002-03 AND RS. 51 34 484/- IN ASSE SSMENT YEAR 2004- 05 ON THE PLANT & MACHINERY ACQUIRED DURING THE PRE VIOUS YEAR RELEVANT TO A.Y. 2001-2002 AND 2004-05 RELYING ON THE APPELLATE ORDER PASSED BY HIS PREDECESSOR FOR A.Y. 2001-2002 IN TOTAL DISREGARD OF THE EXPLANATION - 5 TO SECTION 32(1) OF THE ACT. 2. THE ID. CIT(A) HAS FAILED TO APPRECIATE THE FACT S THAT: EACH ASSESSMENT YEAR IS A SEPARATE AND DISTINCT ASSESSMENT YEAR. THE APPELLANT COMPANY PROVED THE ACQUISIT ION AND OWNERSHIP OF THE SAID PLANT & MACHINERY THE APPELLANT COMPANY CARRIED OUT MANUFACTURING OP ERATIONS DURING THE RELEVANT PREVIOUS YEAR AND HAS THUS PROVED THAT THE SAID PLANT & MACHINERY HAS BEEN USED FOR THE PURPOSE OF THE APPELL ANT COMPANY'S BUSINESS. ITA NO .391/AHD/2007 AND 1892/AHD/2007 - 2 - 3. DURING THE ASSESSMENT YEAR 2002-03 THE ASSESSEE HAS SHOWN WDV OF FIXED ASSETS AT RS.3 65 11 888/- AND CLAIM DEPRECIAT ION OF RS.9 27 972/-; IN THE ASSESSMENT YEAR 2004-05 THE ASSESSEE HAS SHOWN AN ADDITION OF FIXED ASSET OF RS.4 93 78 020/-. THE ASSESSEE CLAIMED DEPRECIATION OF RS.61 27 192/-. THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO FILE DETAIL S OF ACQUISITION OF SUCH FIXED ASSETS WITH EVIDENCE. THE ASSESSEE EXPLAINED THAT T HE ADDITION TOWARDS FIXED ASSET WAS EXPLAINED IN SCHEDULE-D OF THE AUDITED BAL ANCE-SHEET. A PHOTO COPY OF LEDGER ACCOUNT WAS SUBMITTED. IT WAS ALSO STATED TH AT THE FILE CONTAINING BILLS VOUCHERS ETC. WAS ENCLOSED. IT WAS ALSO CONTENDED T HAT THEN ASSETS HAVE BEEN VALUED BY THE AUTHORIZED VALUER AND THE BANKING AUT HORITIES HAVE SANCTIONED FACILITIES OF RS.250 LACS AGAINST SECURITY OF FIXED A SSETS. THE ASSESSING OFFICER HELD THAT THE DETAILS LIKE BILLS ETC. WERE FILED VERY LAT E. THE VOUCHERS FILED WERE ONLY OF RS.4 LACS WHEREAS THE TOTAL VALUE OF ADDITION WAS E XCEEDING RS.493 LACS. THE ASSESSING OFFICER HELD THAT THE VALUATION REPORT HAS NO MEANING AT ALL. THERE IS A GRAVE DOUBT AND QUESTIONABLE CHARACTER OF VALUATION REPORT AND HENCE THE. SAME WAS NOT ACCEPTED. THE ASSESSEE IS GRANTED FACILITIES BY BANK FOR CASH CREDIT (STOCK) CASH CREDIT (HYPOTHECATION OF BOOK DEBITS) AND INLAND/FOREIGN LETTER OF CREDIT FOR A SUM OF RS. 125 LACS RS.75 LACS AND RS.5 0 LACS RESPECTIVELY. THUS SANCTION IS NOT AGAINST FIXED ASSETS. ACCORDINGLY TH E DEPRECIATION IS DISALLOWED. 4. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) H AS OBSERVED AS UNDER:- 2. FROM THE PERUSAL OF THE ASSESSMENT ORDER IT IS NOTICED THAT THE AO HAS DISALLOWED THE DEPRECIATION OF RS.91 27 927/- IN ASSESSMENT YEAR 2002-03 AND RS. 51 34 484/- IN ASSESSMENT YEAR 2004 -05. THE FACTS OF THE CASE ARE THAT THE AO DISALLOWED DEPRECIATION ON PLANT & MACHINERY IN THE ASSESSMENT YEAR 2001-2002 ON ALL THE ADDITIONS MADE DURING THAT YEAR BECAUSE BILLS AND SUPPORTING EVIDENCES WERE NO T PRODUCED BEFORE THE LEARNED ASSESSING OFFICER DURING THE ASSESSMENT PROCE EDINGS FOR THAT YEAR I.E. ASSESSMENT YEAR 2001-2002. THE DISALLOWA NCE OF DEPRECATION SO MADE IN THE ASSESSMENT YEAR 2001-2002 WAS CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). FOLLOWING THE S AME HISTORY IN THE SUBSEQUENT YEARS I.E. 2002-03 AND 2003-04 ALSO DE PRECATION ON PLANT & MACHINERY WAS DISALLOWED. THE LEARNED ASSESSING OFFIC ER HAD DISALLOWED DEPRECIATION OF THE ABOVE NOTED AMOUNT IN THIS YEAR AS WELL. 4. I HAVE CAREFULLY GONE THROUGH THE SUBMISSION MADE BY THE COUNSEL OF THE APPELLANT. SINCE THE DECISION ON THIS ISSUE H AS ALREADY BEEN RENDERED BY MY PREDECESSOR FOR ASSESSMENT YEAR 2001- 02 2002-03 AND 2003-04 I CANNOT TAKE A DIFFERENT VIEW AND THE ISSUE IS YET TO BE DECIDED ITA NO .391/AHD/2007 AND 1892/AHD/2007 - 3 - BY THE ITAT ON THIS POINT FOR THE EARLIER YEARS. I T HEREFORE CONFIRM THE DISALLOWANCE MADE BY THE LEARNED ASSESSING OFFICER FOR THE YEAR UNDER CONSIDERATION. 5. LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS CONFI RMED THE DISALLOWANCE OF THE CLAIM OF DEPRECIATION TO THE ASSESSEE IN THE YE ARS UNDER CONSIDERATION FOLLOWING HIS ORDER FOR ASSESSMENT YEARS 2001-02 200 2-03 AND 2003-04. HE FILED BEFORE US COPY OF THE CONSOLIDATED ORDER OF THE TRIBUNAL DATED 22.05.2009 IN THE CASE OF THE ASSESSEE ITSELF PASSED FOR ASSESSMENT YEAR 2001-02 AND 2003- 04 IN ITA NO.1603/AHD/2005 AND 1012/AHD/2006 AND SU BMITTED THAT THE TRIBUNAL HAS ALLOWED THE CLAIM OF DEPRECATION TO THE ASSESSEE. THEREFORE FOLLOWING THE SAME THE CLAIM FOR DEPRECIATION IN THE YEAR UNDER CONSIDERATION SHOULD BE ALLOWED. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE ALSO AGR EED WITH THE SUBMISSIONS OF THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RECORD. THE UNDISPUTED FACTS ARE THAT THE DEPRECIATION HAS BEEN DISALLOWED BY THE LEARNED ASSESSING OFFICER IN THE EARLIER ASSESSMENT YEAR 2001-02 AND 2003-04 FOLLOWIN G WHICH THE DEPRECIATION HAS BEEN DISALLOWED IN THE YEARS UNDER APPEAL ALSO. BOTH THE PARTIES AGREED THAT THE TRIBUNAL IN THE ASSESSMENT YEAR 2001-02 AND 200 3-04 VIDE CONSOLIDATED ORDER PASSED ON 22.05.2009 HAS DELETED THE ADDITION AND WHILE DOING SO IT OBSERVED AS UNDER:- ITA NO.1603/A/2005 & 1680/A/2005 14. GROUND NOS.2(A) & 2(B) ARE AGAINST THE DISALLO WANCE OF DEPRECIATION OF RS.61 27 192/- IN RESPECT OF DEPRECIATION ON PLANT AND MACHINERY WORTH RS.4 21 86 000/-. 15. DURING THE YEAR THE ASSESSEE HAS SHOWN AN ADDI TION OF FIXED ASSET OF RS.4 93 78 020/-. THE ASSESSEE CLAIMED DEPRECIATI ON OF RS.61 27 192/-. THE ASSESSING OFFICER REQUIRED THE AS SESSEE TO FILE DETAILS OF ACQUISITION OF SUCH FIXED ASSETS WITH EVIDE NCE. THE ASSESSEE EXPLAINED THAT THE ADDITION TOWARDS FIXED A SSET WAS EXPLAINED IN SCHEDULE-D OF THE AUDITED BALANCE-SHEET . A PHOTO COPY OF LEDGER ACCOUNT WAS SUBMITTED. IT WAS ALSO STATED THAT THE FILE CONTAINING BILLS VOUCHERS ETC. WAS ENCLOSED. IT WA S ALSO CONTENDED ITA NO .391/AHD/2007 AND 1892/AHD/2007 - 4 - THAT THEN ASSETS HAVE BEEN VALUED BY THE AUTHORIZED VALUER AND THE BANKING AUTHORITIES HAVE SANCTIONED FACILITIES OF RS. 250 LACS AGAINST SECURITY OF FIXED ASSETS. THE ASSESSING OFFICER HELD TH AT THE DETAILS LIKE BILLS ETC. WERE FILED VERY LATE. THE VOUCHERS FI LED WERE ONLY OF RS.4 LACS WHEREAS THE TOTAL VALUE OF ADDITION WAS EX CEEDING RS.493 LACS. THE ASSESSING OFFICER HELD THAT THE VALUATION REPORT HAS NO MEANING AT ALL. THERE IS A GRAVE DOUBT AND QUESTION ABLE CHARACTER OF VALUATION REPORT AND HENCE THE SAME WAS NOT ACCEPTE D. THE ASSESSEE IS GRANTED FACILITIES BY BANK FOR CASH CREDI T (STOCK) CASH CREDIT (HYPOTHECATION OF BOOK DEBITS) AND INLAND/FORE IGN LETTER OF CREDIT FOR A SUM OF RS. 125 LACS RS.75 LACS AND RS.5 0 LACS RESPECTIVELY. THUS SANCTION IS NOT AGAINST FIXED ASS ETS. ACCORDINGLY THE DEPRECIATION IS DISALLOWED. 16. BEFORE THE LEARNED CIT(A) IT WAS CONTENDED THAT DURING ASSESSMENT PROCEEDINGS THE ASSESS WAS ASKED TO FILE (1) COPY OF LEDGER ACCOUNT SHOWING DATE-WISE ADDITION TO FIXED ASSETS; (2) STA TEMENT OF DEPRECIATION; AND (3) SUPPORTING BILLS AND VOUCHERS . ALL THESE DETAILS WERE FILED. THE LEARNED CIT(A) HEL D THAT THE BILLS AND VOUCHERS OF LIMITED VALUE HAVE BEEN PRODUC ED. THE ASSESSEE HAS FAILED TO ESTABLISH THE EVIDENCE THE FAC T OF ADDITION OF ASSETS DURING THE YEAR. THOUGH THE ASSESSEE COMMENC ED MANUFACTURING ACTIVITIES DURING THE YEAR BUT SINCE T HE ASSESSEE FAILED TO FURNISH DIRECT EVIDENCE I.E. ORIGINAL BILLS AND VOUCHERS OF THE PLANT AND MACHINERY SHOWN TO HAVE BEEN PURCHASED AN D DATE OF ITS PUTTING TO USE THERE IS NO NEED TO GO INTO VALUER' S REPORT OR SANCTION OF CASH CREDIT LIMIT BY WHICH THE EXISTENCE OF PLANT AND MACHINERY COULD NOT BE ESTABLISHED. HE ACCORDINGLY UPHELD THE ORDER OF THE ASSESSING OFFICER. HOWEVER HE HELD THAT THE WHOLE SE T OF ESTABLISHMENT CANNOT BE CONSIDERED AS NON-EXISTENT BECAUSE THERE IS SOME KIND OF MANUFACTURING ACTIVITY DURING THE YE AR. THEREFORE THE DISALLOWANCE OF DEPRECIATION SHOULD BE RESTRICTE D TO ADDITIONAL MACHINERY SHOWN TO HAVE PURCHASED DURING THE YEAR O F RS.4 21 86 00/- AND NOT ON ENTIRE ASSETS OF RS.4 93 78 020/-. 17 . THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT AS PER AUDITED ACCOUNTS THE RAW MATERIAL CONSUMED WERE TO THE EXT ENT OF 18 27 263 KGS. THE SALES WERE EXCEEDING RS.793 LA CS. ALL THESE THINGS WOULD NOT HAVE BEEN POSSIBLE BUT FOR THE UTIL IZATION OF PLANT AND MACHINERY. OUT OF THE TOTAL VALUE OF PLANT AND M ACHINERY OF RS.2 69 43 117/- A SUM OF RS.2 59 55 887/- IS TRANSFE RRED FROM THE ACCOUNT OF PLANT AND MACHINERY WORK-IN-PROGRESS. THESE ITEMS WERE PURCHASED IN EARLIER YEAR BUT SINCE THE SAME W ERE NOT INSTALLED AND WERE TO BE APPORTIONED OVER VARIOUS ITEMS OF PLA NT AND MACHINERY LIKE MACHINERY FURNACE ELECTRIFICATION C OILER DE-COILER WIRE DRAWING MACHINE ETC. THE SAME WAS APPORTIONED OVER VARIOUS SUCH ASSETS ON THE BASIS OF VALUATION REPORT. SINCE VARIOUS ITEMS LIKE STEEL ELECTRIFICATION ETC. WERE TO BE APPORTIO NED OVER SPECIFIC ASSET AND SINCE THIS WORK WAS COMPLETED DURING THIS YEAR THE AMOUNT FOR PLANT AND MACHINERY WORK-IN-PROGRESS WAS TRANSFERRED TO ITA NO .391/AHD/2007 AND 1892/AHD/2007 - 5 - PLANT AND MACHINERY ACCOUNT ITSELF. THIS IS EVIDENT FROM THE COPY OF LEDGER ACCOUNT FILED BEFORE THE ASSESSING OFFICER WHICH IS AT PAGES 173 TO 176 OF THE PAPER BOOK. AS PER THE COPY OF ACCO UNT THE WORK- IN-PROGRESS IN EARLIER YEAR ITSELF WAS RS.2 88 18 79 4/-. SIMILARLY IN RESPECT OF ADDITION TO ALL OTHER TYPES OF ASSETS NAME LY FURNACE ELECTRIFICATION COOLING TOWER COILER DE-COILER C RANE OIL STORAGE TANK WIRE DRAWING MACHINE ETC. ARE AT PAGES 52 TO 373 OF THE PAPER BOOK. THE COMMISSIONER (APPELAS) HAS MISINTER PRETED SANCTION LETTER OF THE BANK. THOUGH THE LETTERS ARE BY WAY OF CASH CREDIT AND LC FACILITIES YET THE SECURITY OFFERED BY THE ASSESSEE IS ITS FIXED ASSETS. LOANS WERE SANCTIONED AND DISBURSED O NLY AFTER VERIFYING THE EXISTENCE OF THE MACHINERY AND THE BILL S THEREOF. IF OUT OF TOTAL VALUE OF RS.4 29 57 920/- BEING THE VALUE OF PLANT AND MACHINERY IF THE PLANT AND MACHINERY TO THE EXTENT OF RS.4 21 86 000/- IS NON-EXISTENT THE PRODUCTION AN D SALES COULD NOT HAVE BEEN OF SUCH AN ENORMOUS AMOUNT. THE EXIST ENCE OF BUILDING WHICH IS ALSO ADDITION DURING THE YEAR IS NOT IN DOUBT. THIS BUILDING ITSELF IS VALUING MORE THAN RS.71 LACS. THE COMPLETE LEDGER ACCOUNT AND THE BILLS IN RESPECT THEREOF WERE FILED B EFORE THE ASSESSING OFFICER AS WELL AS BEFORE THE CIT(A). THE ON LY PURPOSE OF OBTAINING THE VALUATION REPORT WAS TO ALLOCATE THE WORK-IN-PROGRESS TOWARDS VARIOUS ASSETS. IF THE ASSESSING OFFICER HAD A NY DOUBT ABOUT THE GENUINENESS OF THE VALUATION REPORT HE COULD H AVE APPOINTED HIS OWN VALUER BUT THE CLAIM WOULD NOT HAVE BEEN DI SALLOWED BY TREATING THE MACHINERY AS NON-EXISTENT ONE. WHEN T HE ASSESSEE HAS DEMONSTRATED THAT THE HUGE RAW-MATERIAL HAS BEEN CO NSUMED AND PRODUCTION OBTAINED THE SAME WOULD NOT HAVE BEEN P OSSIBLE BUT FOR THE USE OF PLANT AND MACHINERY. HE ACCORDINGLY PLEAD ED THAT THE DISALLOWANCE BE DELETED. 18. THE LEARNED DR SHRI K. SRIDHAR ON THE OTHER HAN D STRONGLY RELIED UPON THE APPELLATE ORDER. HE SUBMITTED THAT FOR ALL OWANCE OF ANY CLAIM OF EXPENDITURE THE ONUS IS ON THE ASSESSEE TO PROVE THE GENUINENESS OF SUCH CLAIM. IN RESPECT OF CLAIM OF DEPR ECIATION THE ASSESSEE HAS 10 PROVE THE OWNERSHIP OF THE ASSET AND USER OF THE SAME FOR THE PURPOSE OF BUSINESS. IN SPITE OF REQUEST THE ORIGINAL BILLS WERE NOT PRODUCED. THEREFORE THE ASSESSING OFFI CER WAS CONSTRAINED TO DRAW AN ADVERSE INFERENCE. HE ACCORDI NGLY PLEADED THAT THE ORDER OF THE ASSESSING OFFICER BE UPHELD. ALT ERNATIVELY THE MATTER MAY BE RESTORED TO THE FILE OF THE ASSESSING O FFICER FOR EXAMINING THE COPIES OF INVOICES NOW PRODUCED AND IT S CLASSIFICATION THEREOF. 19. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE A SSESSEE HAD ALREADY FILED COMPLETE ACCOUNTS IN RESPECT OF VARIOUS ITEMS OF FIXED ASSETS ADDED DURING THE YEAR. THE ASSESSEE HAS ALSO FILED COPIES OF BILLS WHICH ARE AT PAGES 52 TO 374 OF THE PAPER BOOK . THE ASSESSING OFFICER INSISTED ON PRODUCTION OF ORIGINAL BILLS. EVEN THOSE BILLS WERE ONCE PRODUCED BUT NO COGNIZANCE IS TAKEN THEREOF. IN RESPECT OF THE ITA NO .391/AHD/2007 AND 1892/AHD/2007 - 6 - COPIES OF BILLS FILED BEFORE US THERE IS NO DISPUTE A S TO THE GENUINENESS THEREOF. THE CONSUMPTION OF RAW-MATERIA L AND PRODUCTION ACHIEVED THEREFROM IS A TESTIMONY THAT TH E ASSESSEE WAS USING ALL THESE MACHINERY. THE ADDITION TO THE PLA NT AND MACHINERY IS NOT OF RS.4 19 00 000/- AS UNDERSTOOD BY THE ASSE SSING OFFICER BUT OUT OF WHICH RS.2 46 30 ; 578/- IS TRANSFERRED FROM CAPITAL WORK- IN-PROGRESS ACCOUNT. THE CAPITAL WORK IN PROGRESS I N THE IMMEDIATELY PRECEDING YEAR HAS ALREADY BEEN ACCEPTED. THEREFORE IT CAN BE SAID THAT THE ASSESSEE HAS ACQUIRED THE ASSETS OF WHICH IT IS THE OWNER. THE SAME IS EVIDENCED BY THE BILLS AND COPY OF RESPE CTIVE LEDGER ACCOUNT. THREE IS NO DISPUTE TO THE USER OF SUCH ASS ET AND THE PRODUCTION IS TESTIMONY TO THE SAME. THE CONDITION FOR CLAIM UNDER SECTION 32 HAVING BEEN FULFILLED THE ASSESSEE IS ENT ITLED TO DEPRECIATION THEREON. WE THEREFORE DELETE THE DISA LLOWANCE OF DEPRECIATION ON THE ASSETS WORTH RS.4 21 86 000/-. ITA NO.1012/A/2006 32. THE ONLY DISPUTE RAISED IN THIS APPEAL IS AGAIN ST DISALLOWANCE OF DEPRECIATION OF RS.68 45 979/- ON PLANT AND MACHINER Y. 33. THE ASSESSING OFFICER ON THE BASIS OF HIS FINDING I N ASSESSMENT YEAR 2001-02WHICH WAS CONFIRMED BY THE LEARNED CIT(A) PAR TLY HELD THAT THE ASSESSEE HAS NOT BEEN ABLE TO PRODUCE EVIDENCE FOR EXTRA ADDITION TO PLANT AND MACHINERY. THEREFORE DEPRECI ATION ON SUCH PLANT AND MACHINERY IS NOT ALLOWABLE. 34. BEFORE THE LEARNED CIT(A) IT WAS CONTENDED THA T THE ASSESSING OFFICER HAS DISALLOWED PROPORTIONATE DEPRECATION ON T HE PLANT & MACHINERY RELYING UPON HIS ORDER FOR ASSESSMENT YEA R 2001-02. HOWEVER IN ASSESSMENT YEAR 2002-03 CLAIM OF DEPRECI ATION HAS BEEN ALLOWED. AS PER DEFINITION OF WRITTEN DOWN VALUE ' CONTAINED IN SECTION 43(6) THE SAME IS ON THE BASIS OF WRITTEN D OWN VALUE AS ON THE 1 ST DAY OF THE FINANCIAL YEAR AS INCREASED BY ANY ADDIT ION AND DECREASED BY ANY SALE THEREOF. HOWEVER THE WRITTEN DOWN VALUE HAS BEEN ACCEPTED ON 31.3.2002.. THEREFORE THE OPENING WRITTEN DOWN VALUE AS ON 1.4.2002 CANNOT BE ALTERED SO AS TO DIS ALLOW THE DEPRECIATION. THE LEARNED CIT(A) HELD THAT IN ASSES SMENT YEAR 2001-02 THE CLAIM OF THE ASSESSEE WAS NOT ALLOWED AS THE ASSESSEE HAS FAILED TO PROVE THE ACQUISITION OF MACHI NERY. THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 35. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT IN APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2001-02 THE ASSESSEE IS HELD TO HAVE ACQUIRED REQUISITE PLANT AND MACHINERY USED IN PRODUCTION. THEREFORE THE FOUNDATION FOR DENYING DEPRECIATION NO MORE SURVIVES. IT IS ALSO SEEN THAT THE EXISTENCE OF PLAN T AND MACHINERY HAS BEEN ACCEPTED IN ASSESSMENT YEAR 2002-03 AND HE NCE WRITTEN DOWN VALUE AS ON THE LAST DAY OF THE FINANCIAL YEAR R ELEVANT TO ASSESSMENT YEAR 2002-2003 COULD NOT COULD NOT BE AL TERED. THUS ON BOTH COUNTS THE ASSESSEE IS HELD TO BE ELIGIBLE FOR DEPRECIATION ITA NO .391/AHD/2007 AND 1892/AHD/2007 - 7 - ON PLANT MACHINERY. WE THEREFORE DELETE THE DISALLO WANCE OF RS.68 45 979/-. 8. RESPECTFULLY FOLLOWING THE ABOVE ORDER OF THE TRIBU NAL WE SET ASIDE THE ORDER OF THE LOWER AUTHORITIES AND DIRECT THE LEARNE D ASSESSING OFFICER TO ALLOW THE DEPRECIATION TO THE ASSESSEE AS CLAIMED IN THE RETU RN OF INCOME FOR THE YEARS UNDER CONSIDERATION. 9. IN THE RESULT BOTH THE APPEALS OF THE ASSESSEE A RE ALLOWED. ORDER SIGNED DATED AND PRONOUNCED IN THE COURT ON 12/03/2010. SD/- SD/- (BHAVNESH SAINI) ( N.S. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 12/03/2009 PARAS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS) 5. THE DR AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER //TRUE COPY// (DY./ASSTT.REGISTRAR) ITAT AHMEDABAD