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2020 (5) TMI 208 - AT - Income TaxDepreciation on rigs on hire - @60% OR @15% - assessee is not a “mineral oil concern‟ as it is supplying equipment on hire to all other mineral oil concern and is giving it on hire and not using for its business purpose - HELD THAT:- Respectfully following the decision of the coordinate bench [2019 (4) TMI 765 - ITAT DELHI] as well as [2018 (12) TMI 1634 - ITAT DELHI] in assessee/s own case, we direct the ld AO to grant depreciation on this asset @60%. Accordingly, ground No. 1 of the appeal of the ld AO is dismissed. Disallowance u/s 14A read with Rule 8D - HELD THAT:- CIT (A) is correct that the ld AO has failed to record satisfaction about the correctness of the claim of the assessee that it has not incurred any expenditure to earn the exempt income. It is also true that the assessee has not received any exempt income during the year. Thus in absence of exempt income, relying on the decision in case of Cheminvest Ltd Vs. CIT [2015 (9) TMI 238 - DELHI HIGH COURT] wherein, it has been held that there should be actual receipt of exempt income and section 14A will not apply if no exempt income is received during the relevant previous year. In view of this, we confirm the order of the ld CIT (A) and direct the ld AO to delete the disallowance u/s 14A of the Act. Ground No. 2 of the appeal is dismissed. Addition on account of balances lying in sundry creditors account - HELD THAT:- As submitted that with respect to the most of the creditors the confirmation has been received and submitted before the ld CIT (A). In case of all other creditors the specific bank account of the assessee was also produced this shows that the payments are made through account payee cheques. With respect to the one party wherein, it has been shown that certain amounts with respect to the above parties have also written back which have been offered for taxation. For all other creditors the assessee has submitted the PAN as well as ledger accounts from the books of assessee for the subsequent years. In view of the above overwhelming evidence produced by the assessee which could not be controverted by the ld DR we find no infirmity in the order of the ld CIT(A) in deleting the addition as there is neither cessation of the liability nor the creditors are found to be non existing. In the result ground No. 3 of the appeal is dismissed. Disallowance u/s 43B - HELD THAT:- Assessee has made a provision of leave encashment and the same does not fall u/s 43B (f) relying on the decision of Exide industries Vs. Union of India [2007 (6) TMI 175 - CALCUTTA HIGH COURT] - As carefully considered rival contentions and find that in case of CIT Vs. Exide Industries Ltd [2009 (5) TMI 894 - SC ORDER] has held that the assessee shall pay the tax as if section 43B(f) is on the statue and would be entitled to make a claim in its return of income. Therefore, it is apparent that the Hon'ble Supreme Court has merely directed the assessee for payment of tax. However, the binding force of the decision of the Kolkata High Court still stands and therefore, respectfully following the same, we direct the AO to delete the above disallowance. Accordingly, cross objections filed by the assessee is allowed. In the result, cross objection of the assessee is allowed.
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