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2015 (5) TMI 714 - AT - Income TaxExcess claim of depreciation - Equipments given on hire - cost of acquisition u//s 43(1) - CIT(A)directing to adopt value of the depreciated assets at ₹ 89,10,245 as against ₹ 22,45,000 taken by the Assessing Officer (AO) and consequently allowing relief of depreciation amounting to ₹ 16,66,311 - Held that:- It is manifest from the order of the ld. CIT(A) that he simply took on record the details from the assessee and proceeded to delete the disallowance without any independent appraisal. Such Equipments were purchased and commercially exploited by BBW for at least three months, earning rent of ₹ 11.77 lac from their hiring, before transferring them to the assessee. It defies all the logics that any Equipment commercially exploited for at least three months by giving it on hire, after purchase, would fetch the same price at which it was acquired. The Tribunal, being a final fact finding authority, cannot act as a mute spectator to the designs of the parties in arranging their affairs in such a manner so as to scuttle the legitimate tax due to the exchequer. A thing which can be seen with a naked eye, cannot be lost sight of on some unrealistic reasoning. It is not a case in which the AO has arbitrarily formed a view that the purchase price of the Equipments was declared higher and simply ignored it without any bedrock. Rather, he took pains in establishing that the case of the assessee was caught within the mischief of Expl. 3 to section 43(1).The order passed by the ld. CIT(A) in holding otherwise, is, therefore, overturned. Correctness of the amount substituted as actual cost - Held that:- assessee capitalized actual cost of Equipments purchased from BBW at a net of ₹ 63.22 lac, which has been held by us above to be unacceptable. The AO determined the actual cost of such Equipments at ₹ 20 lac, which is again devoid of rationality and is not more than an ad hocism. - The written down value of such Equipments in the hands of BBW at the time of sale to the assessee stood at ₹ 32.91 lac. No details of Installation charges etc. incurred by BBW has been made available. In our considered opinion, the ends of justice would meet adequately, if the total actual cost of such Equipments purchased from BBW is taken at ₹ 35.00 lac on all inclusive basis. The impugned order on this score is set aside and the AO is directed to allow depreciation by considering ₹ 35.00 lac as the actual cost of Equipments purchased from BBW as against his estimate of ₹ 20.00 lac.
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