ACIT Vs Mithra Kyokuto Special Purpose Vehicles Company Pvt Ltd (ITAT Visakhapatnam)
The Visakhapatnam ITAT disallowed the depreciation claim due to insufficient evidence for machinery installation:
The Visakhapatnam ITAT disallowed the assessee's depreciation claim of ₹2.66 crore, finding insufficient evidence of machinery installation during the assessment year. The assessee, engaged in manufacturing tippers and concrete mixers, included raw material costs in capital work-in-progress without capitalizing the machinery, indicating non- operational status. The AO also disallowed 20% of other expenses, citing lack of business use. While CIT(A) ruled in favor of the assessee, citing inauguration expenses as evidence of readiness. The Revenue preferred the appeal before the ITAT Vizag bench. The Departmental Sr.AR Dr. Aparna Villuri argued that the assessee failed to provide proof of machinery installation during the assessment year and the Raw materials were included in capital work-in-progress, but the machinery was not capitalized, indicating it was not operational. Further argued that, the inauguration expenses alone cannot be proved that the unit is operational for claiming the depreciation. Concurring the arguments of the Ld. DR, the ITAT allowed the appeal of the revenue.
FULL TEXT OF THE ORDER OF ITAT VISAKHAPATNAM
This appeal is filed by the revenue against the order of Learned Commissioner of Income Tax (Appeals), Vijayawada [hereinafter in short “Ld.CIT(A)”] in Appeal No. 159/CIT(A)/VJA/15-16 dated 24.04.2019 for the A.Y. 2012-13.
