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TMI Blog2015 (7) TMI 282X X X X Extracts X X X X X X X X Extracts X X X X ..... addition of Rs. 48,21,163/- which was made on account of undisclosed investment in the expenses under the head of transportation and labor charges for obtaining illegal stock without considering the fact that the payment of Royalty to Govt. has no relation with the expenses of transportation and labour charges. 2. That the Ld. CIT (A) -II has erred in law and on fact in allowing depreciation of Rs. Rs. 86,348/- without considering the fact that the depreciation cannot be allowable merely because the assessee has acquired the vehicle during the year but it should have been put to use for business for availing the depreciation." Ground No. 1 2. Apropos ground no. 1, we have heard arguments of both the sides and carefully perused the rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsiderable force since the payment of royalty would go hand in hand with any assessment of income from illegally mined stock. Since this fact is evident from the same set of documents from which the Ld. AO has worked out the undisclosed investment, it would be only fair to allow relief of Rs. 45,18,755/- against the impugned addition. Thus the Appellant gets relief of Rs. 45,18,755/- from the addition of Rs. 48,21,163/-. " 4. On vigilant reading of the order of the Tribunal in the case of M/s Swastik Stone Enterprises (supra), we observe that in the similar facts and circumstances, the issue of expenses under the head of transportation and labour charges for obtaining illegal stock was remitted to the file of AO for a fresh consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the illegal transport of goods i.e. minor minerals to the tune of 10,715/- cubic meters for which compounding fees of Rs. 28,21,615/- was levied. Ld. Commissioner of Income Tax (A) noted that the against the above order of the DM, Nainital, assessee has filed the appeal before the Divisional Commissioner, Nainital, which is still subjudice before him. Considering the above, Ld. Commissioner of Income Tax (A) held that the as of now, since the DM's order indicates the conclusive finding of fact, he was not in a position to make a departure from the same because no fresh evidence has been led which can cause any interference towards the order of DM. Ld. Commissioner of Income Tax (A) concluded as under:- "Since the forest department offici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of assessment AO noted that a survey was conducted on the premises of the assessee company by the forest department, PWD and revenue department. On the basis of material found during the survey DM, Nainital passed a order on 19.3.2005 holding that during the year the asessee has done illegal transportation (made undisclosed sale) of 10032.07 cubic meter of mineral. It was also held by the DM, Nainital that during the year assessee was found having illegal storage of 5045.93 cubic meter of stone which was brought from Gola River. Considering the facts the DM, Nainital vide order dated 19.3.2005 imposed compounding fee of Rs. 5,04,363/- on account of illegal storage of mineral of 5045.93 cubic meter. Then DM, Nainital further impos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed the records. It transpires that the decision of revenue authorities is solely made on the basis of the order of the DM, Nainital and the same has been said to be a matter of adjudication pending before the Divisional Commissioner, Nainital. Both the authorities had totally relied upon the order of the DM, Nainital. Since the same is pending before the Divisional Magistrate, Nainital, the same cannot be said to be final and conclusive. 7.1 In this view of the matter, we remit the issue to the files of the AO to consider the same afresh after examining the appellate orders of the Divisional Commissioner, Nainital on this issue. Needless to add that the assessee should be granted adequate opportunity of being heard." 6.2 A reading of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vehicle during the year but it should have been put to use for business for availing the depreciation. Ld. counsel of the assessee, supporting the impugned order of the CIT(A), has drawn our attention towards operative part para 5 and 5.1 of the impugned order and submitted that once it is established that the asset was used for the purpose of business, then it is to be presumed that it was put to use and ready for use in the assessee's business set up and, therefore, the CIT(A) was correct in allowing depreciation to the assessee. On careful consideration of above submissions, we note that the CIT(A) granted relief to the assessee with following observations and conclusion:- "5.0 The fourth ground challenges the addition of Rs. 1, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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