TMI Blog2019 (6) TMI 1343X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed the same to hold that the provisions made towards leave encashment is allowable as a deduction, he submitted that the decision of the Hon'ble Calcutta High Court has been stayed by the Hon'ble Apex Court [ 2008 (9) TMI 921 - SC ORDER] and the issue is pending for adjudication. As prayed that the issue may be remanded to the file of the AO to pass the final order after the Apex Court decides the issue - we deem it fit and proper to remand the issue to the file of the AO with a direction to give effect to the Hon'ble Supreme Court s decision in the case of Exide Industries Ltd (Supra). Thus, ground treated as allowed for statistical purposes Disallowance of labour charges - AO disallowed 5% of the labour charges -CIT (A) restricted the disallowance to ₹ 5.00 lakhs - HELD THAT:- AO has made an adhoc disallowance without pointing out any discrepancy or defects in the books of account. The CIT (A) observed that the disallowance on the labour charges is on a higher side and hence restricted it to ₹ 5.00 lakhs. We are of the opinion that only such expenditure which is not substantiated by proper bills vouchers or which could not be explained by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Grader iv) Rough Terrain Crane v) Soil Compactor vi) Mobile Crane etc The assessee was therefore, asked to explain as to why depreciation should not be restricted to 15% which is the rate applicable to the vehicles as the above are used for specific purpose but does not form part of motor business, motor lorries and motors taxis used in a business of running them on hire. In reply to the same, the assessee vide letter dated 20.,01.2015 submitted as under: During the year consideration, the assessee claimed depreciation @30% on crane, chasis, motor graders, wheel loaders, soil compactors, JCBs, concrete boom placers given on hire. At the outset, it is humbly submitted that as per Entry-III-(3)(ii) of Appendix-I of the I.T. Rules Motor buses, motor lorries and motor taxis used in a business of running them on hire are eligible for depreciation @30% . 3. The AO however, was not convinced with the above reply and held that the term commercial vehicle has been clearly defined in the Notes to the Table of Rates of Depreciation admissible in the Appendix to Income Tax Rules and since the assets leased by the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;other vehicle-MMV' by the Registration Authorities. In view of the ratios laid down by Hon'ble Supreme Court and followed by various Tribunals holding that the motor vehicles designed for special services are to be treated as motor vehicles, the appellant is eligible for depreciation @ 40% as claimed. Reliance is specially placed on the decisions of Hon'ble Karnataka Tribunal in the case of Bothra Shipping Services Vs. CIT (ITA No. 586/Kol/2010) and CIT Vs. Gaylord Construction (2010) 190 Taxmann 406 (Ker). Accordingly, the ground of appeal is allowed . 6. After considering the detailed submissions of the DR and perusing the Paper Book placed on record, I am of the opinion that there is no merit in Revenue's contentions. As seen from the assessment order passed u/s. 143(3) originally, AO has considered the claim of depreciation and made certain disallowances out of various depreciation claims made in the schedule. It indicates that AO found the claim of 40% depreciation on the above said vehicles appropriate and allowed the same. Since there is specific discussion on the depreciation claims in the first assessment order, allowance of 40% depreciation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espectfully following the decision of the Coordinate Bench, we do not see any reason to interfere with the order of the CIT (A). Therefore, the Revenue s appeals are dismissed. 9. As regards the Cross Objection filed by the assessee for the A.Y 2014-15 in ITA No.858/Hyd/2016, we find that the assessee has raised the following grounds of appeal: 1. That on the facts and in the circumstances of the case, the learned CIT (A) (herein after referred to as learned CIT (A) erred in confirming disallowance of claim of leave encashment on provision basis amounting to ₹ 4,50,247/- in computing total income. 2. That on the facts and in the circumstances of the case, the learned CIT (A) was not justified and grossly erred in confirming ad-hoc disallowance of labour expenses to the tune of ₹ 5,00,000/-. 3. That the respondent craves leave, to add, to amend, modify, rescind, supplement or alter any of the grounds stated here-in-above either before or at the time of hearing of the appeal . 10. As regards Ground No.1, the learned Counsel for the assessee submitted that though the issue is covered in favour of the assessee by the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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