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2017 (5) TMI 1686

] whereby the issue is restored to the file of AO. Depreciation on Goodwill - HELD THAT:- As in assessee’s own case for A.Y. 2007-08 whereby the additional ground raised by assessee in ITAT was admitted and the issue was restored to the file of CIT(A). Depreciation on lease assets - HELD THAT:- Issue decided against the Department by ITAT’s order in assessee’s own case for A.Y. 2006-07 - I.T.A. No. 2921, 2930/Ahd/2013 for A.Y. 2008-09 - 19-5-2017 - Shri Pradip Kumar Kedia, Accountant Member And Shri Mahavir Prasad, Judicial Member Assessee by: Shri James Kurian, Sr. D.R. Revenue by: Shri Sanjay R. Shah, A.R. ORDER Shri Mahavir Prasad, These Cross Appeals filed by the Assessee and the revenue respectively are commonly direc .....

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e-return of income for A.Y. 2008-09 on 26/09/2008 declaring total income at ₹ 6,13,35,62,160/-. Thereafter, the appellant company has filed its revised e-return on 13/01/2010 revising total income of ₹ 6,05,89,34,379/-. The order u/s. 143(3) of the IT Act, 1961 was passed on 31/12/2010 assessing total income at ₹ 6,08,35,67,750/-. 6. Thereafter, assessee preferred first statutory appeal before the learned CIT(A), who partly allowed the appeal of the assessee. 7. We have gone through the relevant record and impugned order passed by the authorities below. So far as consumption of stores and spares of ₹ 64,31,768/- are concerned and same is mentioned on AO s Order Page No.9, Para No.6 and in CIT(A) s Order Page No.21, .....

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s own case is reproduced here under: Ground No.3 of the assessee's appeal is for disallowance of ₹ 51,49,4577- out of consumption of stores and spares during the previous year. The assessee has claimed expenditure of ₹ 5710.25 lacs on account of consumption and replacement of stores and spares treating the same as Revenue expenditure. The details of stores and spares were submitted before the A.O. by the appellant but on verification of details the ld. A.O. found that in case of following item the expenditure is having nature of capital. Sr.No. Item Amount Depreciation rate Depreciation amount 1. BEARING ASSEMBLY 1,009,620 17.50% 1,76,684 2. HARDWARE FOR PLC1 UPGRADE 1,527,931 35.00% 5,34,776 3. Gear Box 2,792,602 17.50% 4, .....

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the whole expenditure. From the side of the Revenue, Ld. CIT.D.R. relied on the order of the A.O. We have considered the rival contentions of the appellant and perused the assessment record and heard the arguments from both sides. The ld. CIT(A) had observed that this replacement of stores and spares can be used independently and its of replacement of plant and machinery. As per A.O's observation it has endorsing benefit to the assessee. The matter is required to re-examine with reference to addition confirmed by the CIT(A). The A.O. is directed to re-examine the nature of expenditure item-wise and take decisions as per law. Ground no.4 is against confirming disallowance of depreciation amounting to ₹ 7,93,490/- on the assets leas .....

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this is finance lease with Western Railway by purchasing the railway wagons. Therefore, he disallowed the depreciation of ₹ 7,93,490/-. The Id. A.O. considered the past assessment for A.Y. 2000-01, 2003-04, 2004-05 & 2005-06. He excluded the capital portion of ₹ 64,28,352/- out of lease rent income of ₹ 72,15,314/- and interest income of ₹ 7,86,962/- was considered for taxation in the assessment order. Being aggrieved by the order of the A.O., the assessee carried the matter before the CIT(A) who has confirmed the addition. The appellant relied upon the decision of Hon'ble Supreme Court before the CIT(A) in case of Shaan Finance Ltd, 268 ITR 308, decision of Gujarat High Court in the case of CIT vs. Pinnacle .....

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e on the decision of the Hon'ble Supreme Court in the case of Asea Brown Boveri Ltd.(supra) by the learned DR, the arguments of the learned DR that the assessee had purchased the equipments for the economic life of the plant itself and not more than that. As a matter of fact, it is not a case, as is appearing from different clauses of the lease deed that the equipments leased will be returned back to the lessor after the expiry of the lease. Nothing has been brought to disapprove the said clauses of the lease deed by any of the authorities below or by the learned DR. The learned DR could not prove that in fact the assessee is only a financer and is not interested in the assets and therefore, it cannot be said as full payout lease. There .....

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al is restored back to the A.O. 11. So far as depreciation on lease assets of ₹ 5,73,297/- and same is mentioned in AO s order Page No.18, Para No.8 and CIT(A) s order Page No.22, Para No.7m same is covered against the Department by ITAT s order in assessee s own case for A.Y. 2006-07 relevant Page No.10, Para No.13 and A.Y.2007-08. 12. With these observations appeal of the assessee is allowed and matter remit back to the file of the AO pertaining to Ground No. 2 and pertaining to Ground No. 1. We remit back to the file of CIT(A) in Department appeal in Ground No.2 lease assets of ₹ 5,73,297/- is decided in the favour of the appellant. 13. In the result, appeal of the assessee in ITA No.2930/Ahd/2013 is allowed and appeal of the .....

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