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2011 (8) TMI 749 - AT - Income TaxDepreciation - Aeroplane vis a vis Aircraft - CIT invoked 263, "aircraft owned by the assessee cannot be an 'aeroplane' since it is much smaller, lighter and less powerful than an aeroplane and thus eligible for depreciation @ 25% instead of 40%" - Held That:- Aeroplane in comparison to aircraft has a fixed wings and is powered by propellers or jets and it's a submission of the assessee that aircraft owned by it has fixed wings and is powered by propellers or jets. There is no merit in observation of CIT - 'aeroplane' is a machine much bigger, heavier and powerful than an aircraft which travels in the air more than an aircraft. Thus aircraft owned by the assessee cannot be considered only as 'Plant and machinery' which is a term distinct to such type of aircraft. - t the Assessing Officer had granted the depreciation to the assessee @ 40% in accordance with the provisions of the Rule, therefore, such grant of depreciation cannot be considered to be a claim not supported by law, as the department cannot straightaway show that such claim of depreciation was not in accordance with the law and, in such, circumstances, the powers u/s 263 could not be invoked. Eligibility of Expense for Exempt Income - Relevant A/y 07-08 - CIT(A) upheld disallowances on retrospective applicability of Rule 8 - Held That:- In case of Godrej & Boyce Mfg. (P.) Ltd. (2010 (8) TMI 77 - BOMBAY HIGH COURT) matter referred back to Assessing Officer to reconsider and re-adjudicate the same after giving the assessee a reasonable opportunity of hearing. Applicability of 40A(2) - Commission paid 2.3% of turnover paid to the directors but no supporting evidence has been placed on record by the assessee to substantiate that such payment was supported by the resolution - held that: - it is not the case of the assessee that section 40A(2)(b) is not applicable. Under the provisions of section 40A(2)(a), the Assessing Officer has an authority to disallow any part of expenditure which is paid to the persons described in section 40A(2)(b) if he is of the opinion that such expenditure paid by the assessee is excessive or unreasonable - case remanded back. Cash payment in excess of Rs. 20,000/ - Section 40A(3) - Airport Authority of India (AAI) towards Rout Navigation (RNFC), landing and parking and/or duty on fuel and the charges for fuel which are made out of the buffer with IOC, but the duty was to be paid in cash before the flight could take off. It was submitted that there are several reasons for making such cash payments as these are the payments made in respect of non-scheduled aircrafts or airlines which, as per rules of Government of India, - held that:- Such payments are to be made in cash as per the directions given by AAI. Such fact has been certified by the AAI. If it is so, then, in our opinion, learned CIT (A) has rightly granted the relief to the assessee as the same may fall under the exceptions specified in Rule 6DD (k) - Decided in favor of assessee.
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