If directors admitted that installed capacity has not enhanced, then same cannot be contradicted by a report of the CA to claim additional depreciation

Such findings of the AO have not been rebutted through any material on record. The Directors of the assessee Company are responsible for the affairs of the assessee Company and once they have admitted that the installed capacity of the current and previous year is not ascertainable, would show that installed capacity has not been enhanced. In the absence of any evidence on record, we do not find it to be a fit case for interference. The assessee has failed to prove that the assessee Company’s installed capacity has increased at any point of time as compared with the earlier years. Even, the learned Counsel for the assessee was not able to point out what wast he capacity of the plant and machinery in earlier years. Therefore, no comparison could be made. The decision cited by the learned Counsel for the assessee in the case of Madhu Industries Ltd. (supra) would not be applicable because the facts are clearly distinguishable and further, in case of the assessee, no evidence has been brought in support of the contention. In the absence of any material on record, we do not find it to be proper to interfere with the order of the learned CIT(A).

It is admitted fact that no investment has been made in the shares of group companies in the assessment year under appeal. The AO has also not brought any evidence on record if there was any nexus between the borrowed funds and the amount invested in the shares of other companies. On identical facts we have confirmed the order of the learned CIT(A) in earlier assessment year 2001-02 in ITA No. 2960/Ahd/2004. The Honourable Supreme Court in the case of Radhasoami Satsang (supra), therefore, clearly applies because the consistency shall have to be maintained by the Income Tax Authorities. The Honourable M. P. High Court in the case of CIT Vs Godavari Corporation Ltd. 156 ITR 835 (MP) also held that “though it is true that the principles of res judicata do not apply, the rule of consistency would apply”. Since it is admitted fact that facts are same as considered in earlier year, therefore, following the same reason for decision in ITA No.2960/A hd/2004, we set aside the orders of the authorities below and delete the entire addition”.