INDO EUROPEAN BREWERIES LTD Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THE assessment of the petitioner for asst. yr. 2004-05 has been sought to be reopened by a notice dt. 17th March, 2011, issued under S. 148(1) of the IT Act, 1961.

(2.) THE petitioner filed its return of income for asst. yr. 2004-05 on 19th Oct., 2004. The AO passed an order of assessment under S. 143(3). The assessee had declared a loss of Rs. 2.10 crores. Depreciation in the amount of Rs. 2.11 crores was claimed by the assessee on fixed assets. The AO made a general disallowance on the depreciation claimed by the assessee in the amount of Rs. 20 lacs on the following grounds :

(3.) DURING the course of the assessment proceedings for asst. yr. 2008-09 the assessee claimed depreciation in the amount of Rs. 81.67 lacs at 100 per cent of the cost of an asset described as an Effluent Treatment Plant (ETP) system. The assessee, by a notice dt. 11th Oct., 2010, was requested to justify the claim and produce documents in support of evidence. In response, the assessee by a letter dt. 30th Oct., 2010 produced a copy of a bill pertaining to the purchase of equipment. The bill indicated that the asset was supplied to the assessee by a company by the name of M/s Praneet Enviroquips (P) Ltd. at Mohali. The AO issued a communication dt. 29th Nov., 2010 to the alleged vendor under S. 133(6) and sought details of the transaction. In a reply dt. 4th Dec., 2010, Praneet Enviroquips (P) Ltd. stated that during the financial year 2007-08, corresponding to asst. yr. 2008-09 no ETP had been supplied to the assessee; no invoice or bill had been issued or raised for the supply of any ETP and no payment had been received from the assessee. Subsequently, by a letter dt. 13th Dec., 2010 the assessee claimed that it was informed by its plant manager that the equipment was purchased from one Narender Mahindra of Delhi. The AO added back an amount of Rs. 81.67 lacs on account of the bogus claim of depreciation made by the assessee. The assessee has filed an appeal against the order of the AO which is stated to be pending.