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2018 (9) TMI 1414 - HC - Income TaxDepreciation on machinery not listed in New Appendix-I Depreciation Schedule – Part-III (xia) eligible for depreciation @ 40% - Held that:- The manner in which the Assessing Officer and the CIT(A) have dealt with the issue is incorrect. When the assessee takes a specific stand stating that all the equipments are forming part of the life saving equipments, the Department would not be justified to high-off few of the equipments stating that the computer software, server, etc., will not form part of life saving equipments. If such a narrow interpretation is to be given, then the purpose and purport of granting higher rate of depreciation at 40% itself would stand defeated. Furthermore, we find that AO nor the CIT (A) has rendered a finding that the stand taken by the assessee stating that the tabulated items form part of the listed items in the schedule is either factually incorrect or a wrong submission. AO as well as the CIT (A) did not examine the issue from that point of view. This exercise was done by the Tribunal and the Tribunal has gone through the paper book submitted by the assessee running about 224 pages explaining the nature of equipment, purchase of equipment, various write-up of the equipments, bills, vouchers, etc., and after having been satisfied that they all form part of the life saving equipments, granted the relief. Thus, we find that the Tribunal was fully justified in granting the relief of depreciation at 40%. Hence, the finding rendered by the Tribunal on the said issue is confirmed. Deduction of payments made to doctors, who referred patients for diagnosis, as they are illegal payments and prohibited under the Medical Council (Professional Conduct, Etiquette and Ethics) - assessee contended that the disallowance of the expenses incurred especially the component of expenses relatable to providing gifts to medical doctors cannot be made straightaway by applying the Board's circular without examination of the income tax file of the beneficiary medical doctors - Held that:- Tribunal was not justified in directing the Assessing Officer to delete the addition. The learned counsel for the assessee would submit that the assessee has got entire details with them and they are ready to produce the details before the Assessing Officer. In the light of the above, so far as the second question is concerned, we are of the view that the matter requires to be remanded to the Assessing Officer to consider the materials that will be placed by the assessee to establish their stand that gifts were given to their doctors and it is not a prohibited practice and it is not for the purpose of referring or canvassing patients. The assessing Officer shall afford an opportunity to the assessee and re-do the assessment under the said head.Regulations, 2002. Disallowance made under Section 40A(3) - Tribunal allowed the assessee's appeal solely on the ground that the expenditures were negligible considering the turnover of the assessee being ₹ 39.00 crores - Held that:- Tribunal failed to note that the assessee themselves stated that they have incurred expenses towards consumables, repairs and maintenance, for which bills and vouchers are available. Therefore, the Tribunal should have remanded the matter for fresh consideration to examine the documents available with the assessee towards the expenditures and ought not to have straightaway deleted the disallowance by referring to the turnover for the relevant assessment year. Therefore, the disallowance under Section 40A(3) is required to be re-done by the Assessing Officer.
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