IT : Where assessee maintained regular books of account which were duly audited, decline in gross profit and disproportionate increase in expenses in certain heads cannot, by itself, be ground to reject book results
IT : Variation in consumption of fuel in relevant year does not, by itself, empower Assessing Officer to assume some undisclosed production so as to make addition to book result
IT : Electric installations that were part of plant and machinery, are eligible to depreciation as plant and machinery
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[2014] 51 taxmann.com 515 (Ahmedabad - Trib.)
IN THE ITAT AHMEDABAD BENCH 'D'
Century Tiles Ltd.
v.
Joint Commissioner of Income-tax*
N.S. SAINI, ACCOUNTANT MEMBER
AND KUL BHARAT, JUDICIAL MEMBER
IT APPEAL NOS. 2310 (AHD.) OF 2011 & 1058 (AHD.) OF 2013
[ASSESSMENT YEARS 2008-09 & 2009-10]
JUNE 9, 2014
I. Section 145 of the Income-tax Act, 1961 - Method of accounting - Rejection of books of account (Decline in GP rate) - Assessment year 2009-10 - Whether where assessee maintained regular books of account which were duly audited, decline in gross profit and disproportionate increase in expenses in certain heads, by itself, would not empower revenue to reject book results; said reason can, at best, present a case where Assessing Officer ought to have verified books with caution and make due inquiries - Held, yes [Para 23] [In favour of assessee]
II. Section 69C, read with section 145, of the Income-tax Act, 1961 - Unexplained expenditure (Unaccounted production) - Assessment year 2008-09 - Assessee was engaged in manufacturing and trading of glazed tiles - Assessing Officer noticing that fuel consumption increased abnormally in relevant assessment year in comparison to increase in production, computed unaccounted production and made addition - Whether in absence of any material to show that assessee actually produced quantity more than what had been disclosed in books of account, variation in amount of consumption of fuel did not by itself, empower Assessing Officer to assume some undisclosed production and thereby make addition to result disclosed by regularly maintained books of account - Held, yes [Paras 36 and 37] [In favour of assessee]
III. Section 32 of the Income-tax Act, 1961 - Depreciation - Allowance/Rate of (Electric installation) - Assessment year 2008-09 - Whether where electric installations were part of plant and machinery, assessee was entitled to depreciation at rate applicable to plant and machinery and not at rate applicable to electric installations - Held, yes [Para 39] [In favour of assessee]
IT : Variation in consumption of fuel in relevant year does not, by itself, empower Assessing Officer to assume some undisclosed production so as to make addition to book result
IT : Electric installations that were part of plant and machinery, are eligible to depreciation as plant and machinery
■■■
[2014] 51 taxmann.com 515 (Ahmedabad - Trib.)
IN THE ITAT AHMEDABAD BENCH 'D'
Century Tiles Ltd.
v.
Joint Commissioner of Income-tax*
N.S. SAINI, ACCOUNTANT MEMBER
AND KUL BHARAT, JUDICIAL MEMBER
IT APPEAL NOS. 2310 (AHD.) OF 2011 & 1058 (AHD.) OF 2013
[ASSESSMENT YEARS 2008-09 & 2009-10]
JUNE 9, 2014
I. Section 145 of the Income-tax Act, 1961 - Method of accounting - Rejection of books of account (Decline in GP rate) - Assessment year 2009-10 - Whether where assessee maintained regular books of account which were duly audited, decline in gross profit and disproportionate increase in expenses in certain heads, by itself, would not empower revenue to reject book results; said reason can, at best, present a case where Assessing Officer ought to have verified books with caution and make due inquiries - Held, yes [Para 23] [In favour of assessee]
II. Section 69C, read with section 145, of the Income-tax Act, 1961 - Unexplained expenditure (Unaccounted production) - Assessment year 2008-09 - Assessee was engaged in manufacturing and trading of glazed tiles - Assessing Officer noticing that fuel consumption increased abnormally in relevant assessment year in comparison to increase in production, computed unaccounted production and made addition - Whether in absence of any material to show that assessee actually produced quantity more than what had been disclosed in books of account, variation in amount of consumption of fuel did not by itself, empower Assessing Officer to assume some undisclosed production and thereby make addition to result disclosed by regularly maintained books of account - Held, yes [Paras 36 and 37] [In favour of assessee]
III. Section 32 of the Income-tax Act, 1961 - Depreciation - Allowance/Rate of (Electric installation) - Assessment year 2008-09 - Whether where electric installations were part of plant and machinery, assessee was entitled to depreciation at rate applicable to plant and machinery and not at rate applicable to electric installations - Held, yes [Para 39] [In favour of assessee]
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