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TMI Blog2018 (11) TMI 861X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer in disallowing the claim of Security Charges of Rs. 2,00,000/- on ad-hoc basis, on the alleged plea that the same was not used for business purpose, without considering the facts and circumstances of the case." 3. We have heard the rival contentions and gone through the facts and circumstances of the case. Briefly stated facts are that the assessee has debited security charges paid to Krishna Plastic site, Boisar, Tarapur amounting to Rs. 8,14,896/-. The AO noted that even in AY 2010-11, the security expenses amounting to Rs. 1,48,540/- was disallowed. On that basis, the AO noted that there is overall increase in security charges from Rs. 4,46,480/- to Rs. 8,14,896/- , which are excessive and part of which is not connected with the business of the assessee. Accordingly, the AO estimated the disallowance at 2 lacs. Aggrieved, assessee preferred the appeal before CIT(A), who also confirmed the action of the AO considering hundred percent increase in the expenses of security charges over the last year and also that in immediate preceding year, the amount paid for security charges to Krishna Plastic site to the extent of Rs. 1,48,540/- disallowed, he confirmed the disallowan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that these assets are old and even in earlier years depreciation was allowed on this crane and crawlers. The learned Counsel for the assessee filed copy of accounts statement of M/s Raheja Sand Supplier & builders in the books of the assessee wherein, the complete details of payment by account payee cheque was disclosed in the immediate preceding year. The learned counsel for the assessee also filed copy of claim of depreciation charge for immediately preceding year and also filed copy of assessment order framed by AO under section 143(3) for AY 2010-11 vide order dated 04.02.2013. According to the learned Counsel for the assessee, once the depreciation is allowed in the immediate preceding year, the AO cannot disallow the depreciation in the absence of any adverse material. 8. After hearing both the sides and gone through the facts and circumstances of the case. We noted that these cranes and crawlers purchased in 2009 (details are cited above). Accordingly, the assessee's claim for depreciation was allowed in earlier years and taking the same facts in this year, depreciation cannot be disallowed. Accordingly, we allow the claim of depreciation and this issue of assessee's appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed the record. We notice that the Hon'ble Gujarat High Court has considered identical issue in the case of Aravali Finlease Ltd. (supra) and has taken the decision that the depreciation is allowable in the hands of the company even if it is registered in the name of its director provided that the vehicle is used for the purpose of business of company and income derived there from was shown as income of the company. In the instant case there is no dispute with regard to the fact that the vehicles are used for the purpose of business of the assessee company. In the instant case there is no dispute with regard to the fact that the vehicles are used for the purpose of business of the assessee company. In the case of Basti SugarMills Co. Ltd. (supra), the Hon'ble Delhi High Court approved the decision of the Tribunal in holding that, since vehicle is a movable asset, the registration as required in the case of transfer of immovable property is not a condition precedent for legal ownership. In the instant case, the funds for purchase of vehicles have been provided by the assessee company and they have been shown as assets of the assessee company. Hence, in our view, the assessee company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of valuation report justifying premium of Rs. 290/- was also filed. However the AO was not satisfied with the explanation of the assessee and added entire security premium of Rs. 15,13,52,000/- U/s 68 of the Act on the plea that shares of assessee company does not justify such huge share premium. Relevant discussion is in para 9 of the assessment order and final conclusion of which is as under:- "The only inference can be drawn from all this is that no consultation or proper valuation took place and the rate of premium was fixed unilaterally by the assessee without any reference to post records, present earning or future prospects. The object was not to attract genuine investors by pegging the premium at a reasonable level but to bring in large amounts of unaccounted funds in the guise of share premium from related concerns. Since the amount come from the director and sister concern, the genuineness of the whole transaction becomes doubtful and the assessee has not satisfactorily explained this genuineness. In view of above, the shore premium is found to be excessive and unreasonable and the explanation offered by the assessee is not found satisfactory. Thus, relying on the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f financial statements of these two parties from whom share application money and share premium received. Even the bank account statements clearly show that the amounts received by the assessee from these parties on account of share premium are clearly received further from third parties. In regard to capacity of these parties, the Ld. Counsel for the assessee stated that the complete details are given to the AO as well as to the CIT(A). It is pertinent to note that subsequently there was search action on the group and all the individuals and group companies including the above two shareholder were assessed with same AO and assessment of the both the above shareholders were completed accepting returned income. The assessee has filed copies of assessment orders of both the shareholders. In this regard, we are find from the order of AO that he has not done any independent enquiry to prove that the transaction is not genuine. He has accepted share capital part which further proves that he has not doubted transaction per se being genuine. Further out of total capital a sum of Rs. 4,00,00,000/-was received in earlier years. Shares to Director Mr A K Jaka were allotted at Book value of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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