- (1.) Heard Sri Shubham Agrawal, the learned counsel for the appellant and Sri Rupesh Jain along with Sri R.S. Agarwal, the learned counsel for the respondent.
(2.) The present appeal is for the assessment year 1996 -97. The assessee deals in manufacture of polyester yarn chips and other activities and had set up three new units during the period relevant to the assessment year 1996 -97. One of the units was established at Nasik, which manufactured polyester chips. The second unit was also established at Nasik, which manufactured poly films and the third unit was set up in Silvasa, which was engaged in photo processing. The assessee filed a return showing a loss, which was not accepted and an assessment order was passed on 31st March, 1999 disallowing the depreciation claimed by the assessee on the ground that the plants were not fully installed at Nasik and were also not put to use and were not ready for production. The Assessing Officer held that the assessee was not entitled to claim deduction on depreciation for the Poly chips plant at Nasik and Bopet poly film plant at Nasik. The Assessing Officer also disallowed foreign travelling expenses amounting to Rs. 14,91,651/ - incurred in respect of 34 persons on the ground that the tax audit report did not mention the names of the persons and, therefore, the genuineness of the expenses incurred by the assessee was doubted. The Assessing Officer also disallowed the payment of commission amounting to Rs. 77,74,517/ -. The assessee, being aggrieved, filed an appeal, which was allowed and the aforesaid disallowances were set aside. The revenue, thereafter, carried out the matter to the Tribunal, which was dismissed. The department, being aggrieved, has filed the present appeal under Sec. 260A of the Income Tax Act.
(3.) On the question of depreciation, the sole ground for disallowing the claim by the Assessing Officer was that the assessee could not prove that he had started production and that the excise documents produced were only photocopies and were not the original and, therefore, reliance could be placed on these documents. The Tribunal after considering the evidence found that the assessee had started the production of poly chips plant at Nasik on 29th March, 1996 and operated the plant during the relevant previous year, which was borne out from the excise records and the raw material purchased and consumed by the assessee. The Tribunal had further given a finding that the excise records were verified by the excise authorities and the genuineness of those documents could not be doubted.;