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2018 (11) TMI 993 - AT - Income TaxDisallowance of of labour expenditure - labour contractors were not having complete knowledge of the contract - circumstantial evidence produced to indicate that it has incurred these expenditure for completing the work - Held that:- The only circumstances with the AO is that proprietorship concern of the labour contractors were in the names of ladies and actual work were being looked after by their husbands, hence, they are not having knowledge of their business. To our mind these circumstances, ought not to be looked into in isolation for disbelieving the claim of the assessee. Receipts have already suffered tax in the hands of the recipients. Work has been done. There are no doubt with regard to the contracts obtained from AUDA or AMC and completion of work. Thus, actual expenditure must have been incurred on such work. Can the claim of the assessee be belied simply for the reasons that some of the labour contractors were not having complete knowledge of the contract which is being looked after by their husband ? To our mind, the Revenue authorities have failed to appreciate actual circumstances of the dispute. Considering the above details, we allow this ground of appeal and delete the impugned disallowance. - Decided in favour of assessee. Disallowance of depreciation - whether depreciation is to be granted at the rate of 15% or 40%? - Revenue authorities have disallowed the claim by holding that the assessee has been claiming additional depreciation which is available to an assessee engaged in the manufacturing activity - Held that:- Case of the assessee is, whether depreciation on the vehicles and instruments used for construction business will be allowed at 40% or 15%, whereas the Revenue authorities have considered this issue, whether the assessee is entitled for additional depreciation or not. Considering the above facts, we deem it appropriate to set aside this issue to the file of the AO for examination. AO shall consider the claim of the assessee, whether it is entitled for higher rate of deprecation or not. AO shall look into the order of the ITAT in the case of Rakesh Jain (supra) . This ground of appeal is allowed for statistical purpose.
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