TMI Blog2014 (2) TMI 662X X X X Extracts X X X X X X X X Extracts X X X X ..... , the expenses have to be allowed – Decided in favour of Assessee. Disallowance u/s 36(i)(iii) of the Act – Held that:- When the assessee has not paid any interest either on borrowed funds or on the capital of the partners then any sum advanced to the family members of the partners without interest cannot terminate in charging notional interest and making the addition - the advance has been made on account of business expediency – Relying upon S.A. Builders Ltd. vs CIT [2006 (12) TMI 82 - SUPREME COURT] - only real income is to be taxed - When interest bearing funds have not been diverted then such notional disallowance is not justified – thus, the disallowance made u/s 36(1)(iii) is not justified – Decided in favour of Assessee. Dele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied in deleting the addition of Rs. 18,70,723/- made by the AO on account of excess depreciation claimed by the assessee on Hydraulic Crane Machine.'' 3.1 Briefly stated, the facts of the case are that the assessee firm derives its income from plying and hiring of cranes. For assessment year 2008-09, it filed its return of income on 30-092008 declaring its total income of Rs. 29,31,830/- and against which assessment was completed at Rs. 53,57,294/- u/s 143(3) of the I.T. Act, 1961 ('the Act' for short). In doing the, AO has computed total income of the assessee as under:- Total income declared by the assessee 29,31,830/- Add:- 1. Disallowance on account of excess = 18,70,723/- depreciation. 2. dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .e salary of drives/ helpers), fuel expenses, transportation expenses, repairing expenses, tyre expense, Misc. expenses etc. The submission of the ld. DR is that this is a small disallowance on account of self made vouchers and it deserves to be upheld. 4.4 After considering the rival submissions, it is found that the net profit rate declared by the assessee company is on very very higher side in this year and the expenses are fully vouched and in some cases self made vouchers are where proper vouches are not possible. In our considered opinion, such adhoc disallowance is not justified. The assessee has disclosed better net profit rate as company to assessment year 2007-08. In this regard, the decision of this very Bench in the case of IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out interest cannot terminate in charging notional interest and making the addition. In this regard, this advance has been made on account of business expediency. Therefore, the decision of Hon'ble Supreme Court of India in the case of S.A. Builders Ltd. vs CIT 288 ITR 1 (SC) would give rescue to the assessee. The Hon'ble Rajasthan High Court has repeatedly held that only real income is to be taxed. One such decision by the Hon'ble Jurisdictional High Court in the case of CIT vs. VTC Leasing Finance Co. 30 TW 211 (Raj.) is relevant. When interest bearing funds have not been diverted then such notional disallowance is not justified. This is the ratio of decision of ITAT Jaipur Bench in the case of Yash Industries in ITA No. 14/JP/2007. Acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arate issues. After hearing both the sides, we are convinced that numerous pieces of evidences have been filed by the assessee in support of its claim which includes RTO registration wherein the cranes are registered under the head 'Truck Crane' which shows that crane is mounted on vehicle. A certificate of the Distt. Transport Officer, stating the crane registered under Vehicle No. for which fitness is not required. The facts of the cases relied upon by the ld. DR are not the same as that of this particular in Third Member case, the ITAT, Pune Bench while deciding the case of Sanghvi Motors (P) Ltd. vs. DCIT, 110 ITD 1 (Pune) has allowed the higher depreciation on such vehicles. Accordingly, we do not find any infirmity in the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
