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2015 (9) TMI 1491 - ITAT KOLKATA

2015 (9) TMI 1491 - ITAT KOLKATA - TMI - Allowability of higher rate of depreciation amounting claimed on Dumper and Payloader - Held that:- We find that the Learned DR did not refute the findings given by the Learned CITA with regard to the nature of business carried on by the assessee and income disclosed thereon. It is seen that the assessee has disclosed income from transportation by dumpers and pay loaders in its profit and loss account and therefore we hold that the assessee is using these .....

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the assessee has disclosed income from transportation by dumpers and pay loaders in its profit and loss account and therefore we hold that the assessee is using these vehicles for transportation of goods of other persons. It is pertinent to note that CBDT Circular No. 652 dated 14.6.1993 on this subject states that assessee is entitled to higher rate of depreciation when the vehicles are used by the assessee in his own business of transportation of goods on hire.- Decided in favour of assessee .....

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of the sundry creditor before the Learned AO and just because no reply has been furnished by the said creditor to the Learned AO u/s 133(6) of the Act, that cannot automatically lead to a situation that the said creditor is not having any creditworthiness. We also find that the Learned AO had not disputed the genuinity of the purchases, sales and trading results of the assessee. - Decided in favour of assessee - Addition made towards excess payment of dumper and payloader charges and excess .....

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vir Singh, JM And Shri M. Balaganesh, AM. For the Appellant : Shri S.S. Alam, CIT (DR) For the Respondent : Shri Aravind Agarwal, Advocate ORDER Per Shri M. Balaganesh, AM 1. This appeal of the revenue and cross objection of the assessee arises out of the order of the Learned CIT(A) in Appeal No142/CIT(A)/Asl/Range-1/Asl/10-11 dated 27.09.2011 for the Asst Year 2008-09 arising out of the order of the Learned Assessing officer framed u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to .....

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s engaged in the business of carrying out transportation of coal handling and unloading and excavation job on contract basis. He informed that during the course of hearing, an addition u/s 40(a)(ia) of the act was made by the Learned AO towards non deduction of tax at source for payment of machinery hire charges to L & T Finance Ltd. He further argued that the entire sums have been paid before the end of the previous year. He prayed before us that the second proviso introduced in section 40( .....

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5. In response to this, the Learned DR fairly conceded to the decision quoted by the Learned AR and agreed for set aside to Learned AO. 3.2. We have heard the rival submissions and we find that the Hon ble Delhi High Court in the case of CIT vs Ansal Land Mark Township P Ltd had held that the second proviso to section 40(a)(ia) of the Act has to be construed retrospective in operation. The relevant operative portion of the said judgment is reproduced here in below:- 4.22. Without prejudice to th .....

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that TDS shall be deemed to be deducted and paid by a deductor if resident recipient has disclosed the amount in his return of income and paid tax thereon, is retrospective in nature or not? The High Court held as under- Section 40(a)(ia) was introduced by the Finance (No. 2) Act, 2004 to ensure that an expenditure should not be allowed as deduction in the hands of an assessee in a situation where income embedded in such expenditure has remained untaxed due to tax withholding lapses by the asse .....

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be penalized under section 40(a)(ia) when there was no loss to revenue. The Agra Tribunal in the case of Rajiv Kumar Agarwal-vs.- ACIT [2014] 45 axmann.com 555 (Agra - Trib.) had held that the second proviso to Section 40(a)(ia) is declaratory and curative in nature and has retrospective effect from 1st April, 2005, being the date from which sub-clause (ia) of section 40(8) was inserted by the Finance No. 2) Act, 2004, even though the Finance Act, 2012 had not specifically stated that proviso is .....

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this issue to the file of the Learned AO to examine the issue in the light of the decision rendered by the Hon ble Delhi High Court as stated supra and decide the issue in accordance with law. The assessee is also directed to provide necessary evidences and documents to prove that the payee had duly disclosed the subject mentioned receipt of machinery hire charges in its return and paid the due taxes thereon. If the same is proved, the assessee should be given relief. Hence the cross objection .....

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on hire to another operator and rather it is used in its own business of loading / unloading and transporting for various organizations. On first appeal, the Learned CITA held that the assessee is disclosing income from transportation by dumpers and pay loaders from M/s Panem Coal Mines Ltd and showing it as income from loading and transportation. He further held that it is therefore clear that the assessee is using these vehicles for transportation of goods of other persons. Aggrieved, the rev .....

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s tribunal in the case of JCIT vs Avinash Transport in ITA No. 1909/Kol/2012 dated 13.8.2015. 4.3. We have heard the rival submissions and perused the materials available on record. We find that the Learned DR did not refute the findings given by the Learned CITA with regard to the nature of business carried on by the assessee and income disclosed thereon. It is seen that the assessee has disclosed income from transportation by dumpers and pay loaders in its profit and loss account and therefore .....

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/2012 dated 13.8.2015 in favour of the assessee, wherein it was held that :- The assessing officer concluded that when the dumpers are given on hire, the assessee would be entitled for depreciation at the rate of 30% . However, that is not the correct interpretation of law, because if the assessee is transporting the goods of other pesons , then also the dumper is given on hire and under such circumstances, in view of the decision of the Hon ble Madhyapradesh High Court in the case of Anup Chand .....

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In view of the aforesaid facts and circumstances and respectfully following the coordinate bench decision in the case of Avinash Transport as cited supra, we hold that the assessee is entitled for depreciation on dumpers and pay loaders at the higher rate and accordingly we are not inclined to interfere with the order of the Learned CITA on this issue. The Ground No.1 raised by the revenue is dismissed. 5. The next issue to be decided in this appeal is as to whether the Learned CITA is justifie .....

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om the said creditor. Since no reply was received from the said creditor, the Learned AO concluded that the creditworthiness of the said sundry creditor has not been established by the assessee and accordingly added the closing balance as on 31.3.2008 of ₹ 7,96,400/- as unexplained cash credit u/s 68 of the Act. On first appeal, the Learned CIT(A) deleted the addition as below:- 5. In these grounds the appellant is disputing the addition of balance due to a sundry creditor from which it ha .....

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actually made. It has also disputed the application of the case laws relied on by the A.O. on the facts of its case. I find that the existence of the creditor and its identity has not ultimately been doubted by the A.O. The case laws relied on by the A.O. are not seen to be applicable to the facts of this case. The case of Baishnab Charan Mohanty [212 ITR 199 (Orissa)] and Precision Finance (P)Ltd. [208 ITR 465 (Cal.)] concerns cash credits and these cannot be equated with the facts of the appel .....

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n be made here to the decision of the Hon ble Allahabad High Court in the case of Pancham Das Jain [205 CTR 444] wherein, on similar facts, addition of trade creditors has been directed to be deleted. Accordingly, the addition made by the A.O. is directed to be deleted. This ground of appeal is allowed. Aggrieved, the revenue is in appeal before us on the following ground:- 2. That on the facts and in the circumstances of the case, the Learned CIT(Appeal), erred in deleting the addition of ͅ .....

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on record. We find that the Learned DR did not refute the findings given by the Learned CITA with regard to the fact that the assessee had fully discharged its onus by giving the name and address of the Sundry Trade Creditor M/s Bijay Hardware Stores before the Learned AO. We find that the provisions of section 68 of the Act could not be invoked for the trade creditoRs.We hold that the assessee had duly discharged its onus by placing all the details of the sundry creditor before the Learned AO .....

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444 is well placed. In that case, their Lordships had held as under:- The tribunal has recorded a categorical finding of fact based on appreciation of materials and evidence on record that the AO had accepted the purchases, sales as also the trading result disclosed by respondent asessee. It had recorded a finding that the aforesaid two amounts represented the purchases made by the assessee on credit and , therefore, the provisions of section 68 of the Act could not be attracted in the present .....

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resaid facts and circumstances and respectfully following the judicial precedents as stated supra, we are not inclined to interfere with the findings of the Learned CITA on this ground. Accordingly, the Ground No. 2 raised by the revenue is dismissed. 6. The final issue to be decided in this appeal is as to whether the Learned CITA is justified in deleting the addition of ₹ 13,37,234/- made towards excess payment of dumper and payloader charges and ₹ 1,00,000/- towards excess expendi .....

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AO also found that during the assessment year under appeal, a sum of ₹ 1.12 crores was paid to Mr. Arbind Singh who is a related party in terms of section 40A(2)(b) of the Act which admittedly constitutes 11.89% of total payment of dumper and payloader hire charges. Accordingly, he proceeded to disallow a sum of ₹ 13,37,234/- (computed at 11.89% of ₹ 1,12,45,998) and a sum of ₹ 1,00,000/- on an adhoc basis to take care of the unjustified increase in other expenditure duri .....

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