TMI Blog2019 (8) TMI 539X X X X Extracts X X X X X X X X Extracts X X X X ..... id company, therefore, the provisions of section 2(22)(e) of the IT Act are not applicable.S et aside the order of the CIT(A) and direct the Assessing Officer to delete the addition. The grounds raised by the assessee on this issue are accordingly allowed. Disallowance of depreciation on vehicle - as per AO assessee has not used the vehicle or the telephone for the purpose of his business. He, therefore, rejected the claim of depreciation - HELD THAT:- It is the submission of the ld. counsel for the assessee that when the assets have already been entered into the block of assets, therefore, use of individual asset is not necessary and, therefore, the Assessing Officer or the CIT(A) are not justified in disallowing the depreciation. I fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a, Accountant Member For the Assessee : Shri Sanjay Kumar, CA For the Revenue : Shri S.L. Anuragi, Sr. DR ORDER This appeal filed by the assessee is directed against the order dated 23rd July, 2018 of the CIT(A)-16, New Delhi, relating to Assessment Year 2013-14. 2. The first issue raised by the assessee in his grounds of appeal relates to the order of the CIT(A) in confirming the addition of ₹ 13,78,656/- made by the Assessing Officer on account of deemed dividend u/s 2(22)(e) of the IT Act. 3. Facts of the case, in brief, are that the assessee is an individual and is the proprietor of M/s Ashok Bansal Co. and derives income from salary, brokerage, commission, interest and rent. He filed his return of incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Current A/c ₹ 61,16,053.00 ₹ 74,94,709.00 Cr. Net Loan/Advances ₹ 1,11,26,527.00 ₹ 1,27,37,759.00 Dr. 5. Relying on various decisions, it was argued that no disallowance u/s 2(22)(e) of the Act is called for. However, the ld.CIT(A) was not satisfied with the arguments advanced by the assessee and sustained the addition made by the Assessing Officer by observing as under:- I have carefully gone through the finding of the AO and submission Ld. AR. There is no dispute that the primary condition of share holding is fulfilled in this case. The appellant is having 42 per cent of share holding in M/s Saurabh (Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reply is either submitted or given in the course of hearing. All these transactions are interest free and no interest has either been charged by the company or by the appellant. After considering all the material on record and the argument of the Ld AR, in my view, all the conditions for applying section 2(22)(e), is fulfilled in the case of the appellant. The appellant is share holder and received advances from the company and the company is having accumulated profit. No material has been brought on record which controvert the finding of the AO. Therefore, I do not see any reason to interfere in the finding of the AO. 'The addition made by the AO u/s 2(22)(e) is confirmed. The ground No.2 is dismissed. 6. Aggrieved with such order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ree accounts with the said company and the cumulative balance is advance given by the assessee to the company and not advance received by the assessee from the said company, therefore, I am of the considered opinion that the provisions of section 2(22)(e) of the IT Act are not applicable. I, therefore, set aside the order of the CIT(A) and direct the Assessing Officer to delete the addition. The grounds raised by the assessee on this issue are accordingly allowed. 8. The second issue raised by the assessee in the grounds of appeal relates to the order of the CIT(A) in sustaining the disallowance of depreciation on vehicle amounting to ₹ 2,58,369/-. 9. After hearing both the sides, I find, during the course of assessment proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see that when the assets have already been entered into the block of assets, therefore, use of individual asset is not necessary and, therefore, the Assessing Officer or the CIT(A) are not justified in disallowing the depreciation. I find merit in the above argument of the ld. counsel for the assessee. It has been held by the Hon'ble Delhi High Court in CIT vs. Bharat Aluminium Co. Ltd. [2010] 187 taxman 111 (Delhi) as relied on by the ld. counsel for the assessee that though as per section 32(1), in order to be entitled to claim depreciation, asset is to be owned by assessee and it is also to be used for purpose of business or profession, but expression used for the purpose of business , when applied to block of assets, would mean u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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