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TMI Blog2015 (9) TMI 1181X X X X Extracts X X X X X X X X Extracts X X X X ..... e Hon'ble Supreme Court. 2. Ld. CIT(A) has also erred in law and on facts in deleting the disallowance of depreciation which has been made by the AO after proper marshalling and sound footing of facts. 3. Any other grounds raised during the proceedings of appeal." 3. First issue vide ground no. 1 relates to the deletion of addition made by the AO on account of deduction u/s 80HHC on DEPB. 4. Facts related to this issue in brief are that the assessee was engaged in the business of manufacturing and export of artwares, EPNS artwares, Iron artwares and other handicrafts. The assessee had credited Rs. 68,13,755 for the year relevant to the assessment year 2002-03 as DEPB and Rs. 93,40,792/- for the assessment year 2003-04. The AO did not allow the claim of the assessee for deduction u/s 80HHC on the said amounts. 5. Being aggrieved the assessee carried the matter to the ld. CIT(A) and submitted that the DEPB licenses were export incentives for refunds of various excise and custom duties paid while procuring raw materials and moreover, only a unit carrying out export sales is entitled to get DEPB licenses only and only against exports made. Thus, the DEPB credits / licenses dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke any law which takes away or abridges the equality clause in article 14 of the Constitution which enjoins the State not to deny to any person equality before the law or equal protection of the laws of the country. As long as there is a rational basis for the classification, article 14 will not be in the way of such a classification resulting in unequal burdens on different classes of properties. A taxing statute is not wholly immune from attacks on the ground that it infringes the equality clause in article 14, though the courts are not concerned with the policy underlying a taxing statute. In the amendments the classifications based on export turnover is a recognized way of classification throughout the world. Progressive levy is based on income classification in terms of both, the basis of taxation and the rate of tax, and on this ground, the same cannot be said to be arbitrary. The Legislature is not bound by the doctrine of promissory estoppels and the amendment could not be struck down on the ground of violation of promissory estoppels. The object of the amendment, as it appeared from the statements of the Finance Minister while moving the Bill, was to get rid of the wrong d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es clear therefrom that challenge which was laid to the conditions contained in the said provisos by the respondent has succeeded. However, to make the position crystal clear, we substitute the direction of the High Court with the following direction : Having seen the twin conditions and since 80HHC benefit is not available after 1.4.05, we are satisfied that cases of exporters having a turnover below and those above 10 cr. Should be treated similarly. This order is in substitution of the judgment in Appeal." 10. We, therefore, by respectfully following the ratio laid down by the Hon'ble Supreme Court in the aforesaid referred to judgment do not see any merit in this ground of the departmental appeal. 11. Ground no. 2 relates to the deletion of disallowance on account of depreciation made by the AO. The facts related to this issue in brief are that the AO disallowed the depreciation to the extent of Rs. 60,559/- on the vehicle block, Rs. 1,49,734/- on factory/ office building block, and Rs. 5,32,414/- on machinery & plant block for the assessment year 2002-03 by observing as under :- "11) The assessee has submitted a chart of fixed assets showing opening WDV and additions mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al disallowance - (60559+68523+ 149734+532414) = 811230/-." 12. Being aggrieved the assessee carried the matter to the ld. CIT(A) who incorporated the submissions of the assessee in page no. 6 and 7 of the impugned order which are reproduced verbatim as under :- Ground no. 1(e), Disallowance of Rs. 60,559/- and Rs. 68,523/- out of Depreciation on Vehicles :- The disallowance of Rs. 60,559/- has been made on the contention that the journal entry dated 31.03.2002 was not explained. The journal entry is the transfer of amount of car purchased from M/s MGF Automobiles Ltd. by Delhi branch office of the assessee on 24.02.2002. The detailed copy of account having particulars of invoice and car and the bill were duly produced before AO and the same are enclosed herewith. It is prayed that the disallowance of Rs. 60,559/- , may kindly be deleted. Further, after allowance of above Rs. 60,559/- the total disallowance on account of depreciation on vehicles may kindly be restricted to 6% instead of 10%, as in earlier years. Ground no. 1(f), Disallowance of Rs. 1,49,734/- out of Depreciation on Factory/Office/Buildings :- The depreciation on additions to factory/office Building made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise and conjectures. All the details called for were duly submitted with proper evidence. The addition stands deleted." Now the department is in appeal. 14. The ld. DR reiterated the observations made by the AO and strongly supported the assessment order dated 21.3.2005. In his rival submissions, the ld. Counsel for the assessee reiterated the submissions made before the authorities below and strongly supported the impugned order passed by the ld. CIT(A). 15. We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is noticed that the disallowance of depreciation on vehicles was restricted by the ld. CIT(A) to the extent of 6% by following the decision of the ITAT in assessee's own case for the preceding assessment year 2001,2002, during the course of hearing, nothing contrary to the said decision was brought on record. Therefore, we do not see any valid ground to interfere the findings of the ld. CIT(A). 16. As regards to the disallowance of depreciation on the building, the ld. CIT(A) categorical stated that the assessee had claimed the depreciation @ 5% on the additions made after 30.09.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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