COMMISSIONER OF INCOME TAX Vs. BOHRA INDUSTRIES LTD

JUDGEMENT

(1.) BY way of this appeal under Section 260A of the Income Tax Act, 1961 ['the Act'], the revenue seeks to question the order dated 16.12.2011 as passed in ITA No.346/Jodh/2009 whereby the Income Tax Appellate Tribunal, Jodhpur Bench, Jodhpur ['the Tribunal'] has affirmed the order dated 19.01.2009 as passed by the Commissioner of Income Tax (Appeals), Udaipur ['the CIT(A)] in deleting disallowance, to the tune of Rs.8,73,445/ - towards depreciation on building and Rs.20,96,267/ - towards interest paid to the bank, as ordered by the Assessing Officer ['the AO'] in the assessment order dated 28.12.2007 relating to the respondent - assessee for the assessment year 2005 -06.

(2.) AFTER having heard the learned counsel for the appellant and having perused the material placed on record, we are clearly of the view that essentially the matter relates to appreciation of evidence leading to finding on facts; and no substantial question of law is involved in the case.

(3.) AGGRIEVED by the aforesaid assessment order dated 28.12.2007, the assessee preferred an appeal that was considered and partly allowed by the CIT(A) in his order dated 24.03.2009. On the aforesaid disallowance towards depreciation and interest, the learned CIT(A) did not agree with the observations made by the AO while, inter alia, observing that the AO did not deal with the basic point as to whether construction of the factory building had been carried out or not. The learned CIT (A) also observed that the AO did not make any physical enquiry to verify the exact condition of the factory building and rather proceeded only on the theory part while devoting much of the time in collecting and analyzing the bills/vouchers/wage -sheets and even the aspect of ratio of the building material, masons and labourers. The learned CIT(A) also found the AO not correct in appreciation of the statements of the material suppliers. The CIT(A) also found that every item of purchase, payment, transportation, receipt etc. was recorded properly in the books of accounts and the AO had nowhere pointed out any defect in such books. The CIT(A), therefore, did not approve of disallowance made by the AO with reference to some procedural irregularities and presumptions. The CIT(A) also indicated about the obvious flaws in the AO's approach where total labour payment was disallowed, which would practically mean that construction of factory building, whatever, was carried out without any labour payment. Similarly, disallowance towards material supplies was also disapproved. The CIT(A), inter alia, observed as under: -