ORDER

Per Shri A.K. Garodia, Accountant Member

This appeal is filed by the assessee and the same is directed against the order of ld. CIT(A)-1, Bangalore dated 04.04.2018 for Assessment Year 2014-15.

2. The grounds raised by the assessee are as under.

“1. That the order of the authorities below in so far as it is against the appellant is against the law, facts, circumstances, natural justice, without jurisdiction, bad in law and all other known principles of law.

2. That the total income and total tax computed is hereby disputed.

3. That the authorities below erred in disallowing depreciation relating to fixed assets amounting to Rs.3,88,36,290/-.

4. That the authorities below erred in holding that under the facts and circumstances the decision of the Hon'ble Supreme Court results in total stoppage of business of permanent nature.

5. That the authorities below erred in assuming that the plant was not operational.

6. That the CIT-A erred in confirming the disallowance of depreciation by rejecting the ground on 'Block of Asset' concept.

7. That the authorities below erred in relying on irrelevant material and ignoring the relevant material.

8. For the above and other grounds and reasons which may be submitted during the course of hearing of the appeal, the assessee requests that the appeal be allowed as prayed and justice be rendered.”

3. The relevant facts in brief are that it is noted by the AO in Para 3 of the assessment order that it is noticed that assessee has claimed an amount of Rs. 5,85,98,656/- towards depreciation for the present year. The AO has further noted that fixed assets of the assessee include Building and Plant and Machinery related to the mining activity of the assessee. The AO further noted in the same para that assessee has not carried out any mining activity during the Financial Year 2013-14 relevant to Assessment Year 2014-15. The AO has also noted that assessee has income only from contract receipts for transportations and rake loading charges. Thereafter the AO has noted that the assessee was issued show cause notice asking the assessee to explain as to why the depreciation should not be disallowed on the Plant and Machinery and Building which is not utilized for the purpose of business. The assessee submitted reply vide letter dated 05.12.2016 received by the AO on 06.12.2016 which is reproduced by the AO in Para 3.2 of the assessment order. In the said written submissions, the assessee has placed reliance on the judgement of Hon’ble Madras High Court rendered in the case of CIT Vs. Southern Petrochemical Industries Corpn. Ltd. as reported in 301 ITR 255. He also placed reliance on the judgement of Hon'ble Karnataka High Court rendered in the case of CIT &Anr Vs. Blend Well Bottles (P) Ltd. as reported in 323 ITR 18. Reliance is also placed on another judgement of Hon’ble Madras High Court rendered in the case of CIT Vs. Southern Hydro Carbon Ltd. as reported in 146 CTR 55. The AO held that these judgements are not applicable in the present case because the facts are different. The AO has noted that the assessee M/s. Bharat Mines and Minerals has been classified under Category ‘C’ i.e. the assessee has carried out illegal mining and is found to be involved in flagrant violation of the Forest (Conservation) Act. The AO has also noted that Central Empowered Committee (CEC) has recommended for cancellation / determination of mining leases falling under category ‘C’ and to allot such mines to the end users through bidding in a transparent way. After considering the judgements relied upon by the ld. AR of assessee before the AO, the AO has made disallowance of Rs. 3,88,36,290/- out of depreciation claimed by the assessee of Rs. 5,85,98,656/-. Being aggrieved, the assessee carried the matter in appeal before CIT(A) but without success and now the assessee is in further appeal before us.

4. It is submitted by ld. AR of assessee that copy of financial statements of the assessee for Financial Year 2011-12 is available on p