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2018 (9) TMI 1090 - AT - Income TaxDisallowance of depreciation on sumo car - addition to the presumptive income declared u/s 44AD - Additions on the ground that vehicle was not put to use for his business purposes during the previous year - Held that:- The assessee has declared the profit @ 17.46% and the AO has not found fault in the profit declared by the assessee under section 44AD. The profit declared by the assessee is much more than the minimum income to be assessed under the provisions of section 44AD at 8%. Accordingly when the assessee has filed return of income declaring income under section 44AD then the AO could have estimated the income of the assessee if it was found to be less than as ought to have been under the provisions of section 44AD of the Act. Hence the addition made by the AO in the income declared under section 44AD is not justified and the same is deleted. Addition u/s 68 on account of claim of gifts - Held that:- In a case where the AO has accepted the claim of gift then in such a situation the gift received to the extent of ₹ 50,000/- cannot be added to the income of the assessee as per the provisions of section 56(2)(vii). In the case in hand the claim of the assessee that the said amount of ₹ 44,370/- is the gift received by the assessee from various persons/relatives has not been established either by furnishing any evidence or any details or explanation, therefore, a mere claim of gift would not fall in the ambit of provisions of section 56(2)(vii). Therefore, when the assessee has failed to establish the claim of gift then the said amount has to be added as unexplained cash credit under section 68. Accordingly, we do not find any error or illegality in the orders of the authorities below, qua this issue. Disallowance of depreciation on JCB - Held that:- It is not the case of the A.O. that the assessee has not used the JCB for the business purposes and further when the assessee has received the hire charges from use of JCB during the year under consideration, then the mere delay in registration would not negate the fact of use of JCB by the assessee. It is pertinent to note that the JCB is not a transportation vehicle but a machine used in digging and other excavation of work and, therefore, practically it is possible to use the JCB without getting the registration. Further, when the registration was granted with a penalty on account of delay in registration, the said defect was removed by paying the penalty and accordingly the claim of depreciation on the JCB cannot be disallowed. In view of the above facts and circumstances of the case, we allow the claim of depreciation on JCB.
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