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Assistant Commissioner of Income Tax, Circle-2, Jaipur Versus M/s Shivani Enclave Pvt. Ltd.

2015 (12) TMI 1503 - ITAT JAIPUR

Disallowance of excess depreciation claimed on Wind Mill plant - CIT(A) deleted the addition - Held that:- foundation of platform, erection, installation of plant and machinery, preparation of crane platform for wind mill and other civil work carried out for installation are internal part of wind mill, which have not independent use. Thus, we are of the considered view that the assessee is entitled for 80% of depreciation on composite wind mill project including other expenditure for put to use .....

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n case of credit card. This is not a commission payment but a fees deducted by the bank. There is no such relation between the bank and the shop keeper, which establishes the relationship of a principal and commission agent. Therefore, TDS is not liable to be deducted on payment made on the basis of credit card. The other case laws referred by the assessee is also squarely applicable. - Decided in favour of assessee.

Disallowance of Misc. supply expenses - CIT(A) deleted the addition .....

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026/JP/2013 - Dated:- 10-11-2015 - SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM For The Revenue : Shri Kailash Mangal (JCIT) For The Assessee : Shri G.G. Mundra (CA) ORDER PER: T.R. MEENA, A.M. This is an appeal filed by the revenue against the order dated 08/10/2013 passed by the learned CIT (AI, Jaipur for A.Y. 2009-10 The respective grounds of appeal are as under:- 1 Whether on the facts and circumstances of the case and in law, ld CIT(A), has erred in deleting the addition of ₹ 32,74 .....

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f ₹ 4,29,676/-. 2. The first ground of the revenue appeal is against deleting the addition of ₹ 32,74,147/- on account of excess depreciation claimed by the assessee on wind mill plant. The assessee is running hotels, restaurants, bar and shopping complex. It filed return of income on 27/09/2009 declaring total income of ₹ 50,78,815/-. During the year under consideration, the assessee has installed wind mill at village Saadiya, district Jaisalmer, Rajasthan of ₹ 3,66,33,3 .....

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er under the head building @ 10% or as plant and machinery @ 15%. The ld Assessing Officer gave reasonable opportunity of being head, which was replied vide letter dated 02/11/2011, which has been reproduced on page No. 3 and 4 of the assessment order. After considering the assessee s reply, the ld Assessing Officer referred Section 32 of the Income Tax Act, 1961 (in short the Act) as well as schedule as per Appendix 1, Rule 5 of the Act and held that all the assets should be either covered unde .....

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ning on wind energy. The categorization made in the Appendix shows that there is no intention to include internal approach roads, foundation work and crane platform for wind mill, supply of electric items like RSJ Poles Disc insulator, conductor etc. in the above block of assets. Further the expenditure on account of labour for civil work or electrical work carried out in connection with the installation of wind mill also cannot be included in the definition of Wind Mill by any means because the .....

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ion in connection with transfer of lease land. 4] Power evacuation charges. 5] Interest on bank loan. Thereafter he considered all the categorization of assets particularly expenditure incurred for civil work carried out at site, charges for creation of foundation/platform, expenditure incurred on accessories & Electrical items to renewable energy device and their components and labour charges for installation of electrical line for transmission and metering, land lease related expenditure, .....

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33077 2528477 10% 252848 Plant & Machinery 6451132 483834 5967298 15% 895095 Lease and Hold Land 100000 Nil Nil Nil Nil Total allowable depreciation 14309876 Depreciation claimed by the assessee 17584023 Difference to be added 3274147 Finally he disallowed depreciation of ₹ 32,74,147 and the same was added in the income of the assessee. 3. Being aggrieved by the order of the learned Assessing Officer, the assessee carried the matter before the learned CIT(A), who had allowed the appeal .....

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asis of the decision of the Hon ble ITAT in the case of M/s Chirash Associates Pvt. Ltd. (ITA No. 1632/JP/08). It is further noted that the appeal on this ground was allowed by my predecessor in A.Y. 2010-11 as well. Therefore, following the order of my predecessor as well as of the Hon ble ITAT, the disallowance made by the A.O. is deleted. The appeal on this ground is, accordingly, allowed. 4. Now the revenue is in appeal before us. The Ld. DR vehemently supported the order of the ld. Assessin .....

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9 as stated above. The assessee company filed appeal against the assessment order for A.Y. 2008-09 before CIT(A)-I, Jaipur. The CIT(A)-I, Jaipur vide his appeal order dated 06/07/2011 in appeal No. 481/10-11 (copy submitted) deleted the disallowance of depreciation and directed the A.O. to treat the entire cost of ₹ 3,66,33,382/- as cost of wind mill and to allow depreciation @ 80% (for ½ year) which has been confirmed by this Hon ble Bench vide order dated 25/7/2014 in ITA No. 840/ .....

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nd perused the material available on the record. This Bench has already considered the assessee s own case in ITA No. 840/JP/2011 for A.Y. 2008-09 on identical facts. The operative portion of the order is reproduced as under:- 6. We have heard the rival contentions of both the parties and perused the material on record. The various High Courts as well as Coordinate Bench of ITAT, Jaipur in case of DCIT Vs. Vippy Solvex Products Ltd. and DCIT Vs. M/s Chirag Associates (P) Ltd. respectively, held .....

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is against disallowance of ₹ 4,82,093/- U/s 40(a)(ia) of the Act. The ld Assessing Officer observed that the assessee had debited credit card commission of ₹ 8,67,719/-. The assessee has not deducted TDS on payment of credit card service charges. Each charges appeared to be commission in respect of credit card. Section 40(a)(ia) of the Act is squarely applicable on it. The assessee was given reasonable opportunity of being heard. The assessee s reply was reproduced by the Assessing O .....

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order. Accordingly, the assessee is liable to deduct TDS U/s 194H of the Act. He further referred CBDT circular No. 619 on TDS dated 04/12/1991 on page No. 22 of the assessment order. He further relied on the decision in the case of CIT Vs. Singapore Airlines Ltd. & Other Airlines, 213 Taxman 441, Ahmadabad Tribunal order in the case of Canara Bank Vs. ITO 305 ITR (AT) 189, Mumbai ITAT s decision in the case of Ultra Entertainment Solutions Ltd. Vs. ITO 17 SOT 249. Accordingly, he disallowe .....

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09 (ITA No. 746/JP/2011). It has been held by the Hon ble ITAT that the provisions of Section 194H were not applicable when there was no relationship of principal and agent. Following the decision of my predecessor and the Hon ble ITAT the disallowance is deleted. The appeal on this ground is, accordingly, allowed. 8. Now the revenue is in appeal before us. The ld DR vehemently supported the order of the Assessing Officer. At the outset, the ld AR of the assessee has submitted as under:- The abo .....

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that assessee sold its goods through credit card and on presentation of bill issued against credit card the bank makes payment to assessee after deducting agreed fees as per terms and conditions in case of credit card. This is no a commission payment but a fees deducted by the bank. There is no such relation between the bank and the shop keeper which establishes the relationship of a principal and commission agent. Therefore, provision of section 194H are not attracted in this type of transacti .....

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CIT (2013) 156 TTJ 729 (Jod). 9. We have heard the rival contentions of both the parties and perused the material available on the record. This issue has been considered by the Coordinate Bench in Gem Paradise Vs. ACIT in ITA No. 746/JP/2011 in which it has been held that the assessee sold its goods through credit card and on presentation of bill issued against credit card, the bank makes payment to the assessee after deducting agreed fees as per terms and conditions in case of credit card. This .....

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. supply expenses of ₹ 4,29,676/-. The ld Assessing Officer observed that the assessee has claimed Rs, 21,48,379/- on account of miscellaneous supplies and expenses. He asked the assessee to furnish the details of these expenses during the assessment proceedings. The ld Assessing Officer on verification, was found that these expenses were incurred mostly in cash and were not supported by bills. The assessee had made self made vouchers which are not verifiable. The ld Assessing Officer held .....

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,48,379/- on miscellaneous supplies and expenses was mainly in cash and not supported by bills. It is, however, seen from the break up given by the appellant that out of these expenses only ₹ 19,530/- have been incurred in cash. Moreover, this issue is also covered in favour of the appellant vide order of the CIT(A)-III, jaipur for A.Y. 2006-07 in appeal No. 660/JPR/08-09 dated 28/09/2010. Since, this issue is covered in favour of the appellant, the disallowance is deleted. The appeal on t .....

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