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The Tax PublishersITA Nos. 4508 & 4509/Mum/2019
2021 TaxPub(DT) 0804 (Mum-Trib)INCOME TAX ACT, 1961
Section 32
An equipment financed by Bank cannot be summarily treated as bogus. AO had not made any inquiry from the bank in this regard and made disallowance of depreciation claimed on the purchase of machinery which could not be held as justified.
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Depreciation - Allowability - Equipment purchased financed by bank -
AO made disallowance of depreciation claimed on the purchase of machinery on the ground of being bogus purchase of machinery. Held: Assessee claimed that it had purchased a printing machine with help of term loan from Bank. It stands to reason that an equipment financed by Bank of Maharashtra cannot be summarily treated as bogus. AO had not made any inquiry from the bank in this regard. In this background, disallowance of deprecation was deleted.
REFERRED :
FAVOUR : In favour of assessee.
A.Y. : 2010-11
IN THE ITAT, MUMBAI BENCH
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