TMI Blog2020 (4) TMI 715X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be assumed that there is a default as the deduction is not as required by or under the Act, but the facts is that this expression, on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction has not been paid on or before the due date specified in sub-section 3(1) of section 139. Section 40(a)(ia) refers only to the duty to deduct tax and pay to government account. If there is any shortfall due to any difference of opinion as to the taxability of any item or the nature of payments falling under various TDS provisions, the assessee can be declared to be an assessee in default u/s. 201 and no disallowance can be made by invoking the provisions of section 40(a)(ia) - AO either could accept the claim of the assessee or could disallow the claim of the assessee but he could not have disallowed the proportionate expenditure - Decided in favour of assessee. - ITA. No: 361/AHD/2017 - - - Dated:- 19-2-2020 - Shri Mahavir Prasad, Judicial Member And Shri Waseem Ahmed, Accountant Member For the Appellant : Shri Tushar Hemani Aditi Sheth, AR For the Respondent : Shri Vidhyut Trivedi, Sr. D.R. ORDER PER MAHAVI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed three TATA trippers (Heavy Goods Vehicles) on 31.03.2009. It was further noticed that retails invoices were generated on 31.03.2009. Insurance along with registration was also done on 31.03.2009 and assessee has claimed depreciation on these vehicles @ 50% and same was doubted by the assessing officer. 4. Assessee contention was that vehicles were purchased on 31.03.2009 and were put to use on 31.03.2009. And there was a carting trip for L T from Nareshwar to Karjan site. But in the absence of any document report with regard to carting trip for L T from Nareshwar to Karjan site, assessing officer disallowed the claim of depreciation @ 50% by the assessee and made addition of ₹ 14,24,343/-. 5. Against the said order, assessee preferred first statutory appeal before the ld. CIT(A) who confirmed the action of the A.O. 6. Now assessee has come before us by way of second statutory appeal. 7. We have gone through the relevant record and impugned order. Mainly claim of depreciation was disallowed by the lower authorities on the ground that assessee could not produce any proof with regard to put to use the said vehicles on 31.03.2009. But assessee filed a paper boo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... depreciation was allowed by the Hon ble High Court with following observation: Installation of machinery or plant and machinery in the building itself is not sufficient to attract the provisions contained in section 32 of the Income-tax Act, 1961. There must be use of plant and machinery for the purpose of business as contemplated in section 32. The term use has a wide connotation. Even trial production of a machinery would fall within the ambit of used for the purpose of business . Further, as the statute does not prescribe a minimum time limit for use of the machinery, the assessee cannot be denied the benefit of depreciation on the ground that the machinery was used for a very short duration for trial run. 10. Since vehicle was put to use on 31.03.2009 and in support of its contention, assessee has submitted copies of ledger before the lower authorities and respectfully following the aforesaid judgments, we allow claim of the assessee and this ground of the assessee is allowed and we direct assessing officer to allow the claim of depreciation of ₹ 14,24,343/- u/s. 32 of the Act. 11. Next ground is relating to disallowance of expenses of ₹ 30,23,9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TR 432 (Cal)] has, dismissing the appeal of the commissioner on the ground that no substantial question of law arises, reproduced and confirmed the following stand of a coordinate bench: In the present case before us the assessee has deducted tax u/s. 194C(2) of the Act being payments made to sub-contractors and it is not a case of non-deduction of tax or no deduction of tax as is the import of section 40(a)(ia) of the Act. But the revenue s contention is that the payments are in the nature of machinery hire charges falling under the head rent and the previous provisions of section 194I of the Act are applicable According to revenue, the assessee has deducted tax @ 1% 2 u/s. 194C(2) of the Act as against the actual deduction to be made at 10% u/s. 194I of the Act, thereby lesser deduction of tax. The revenue has made out a case of lesser deduction of tax and that also under different head and accordingly disallowed the payments proportionately by invoking the provisions of section 40(a)(ia) of the Act. The ld. CIT(A), DR also argued that there is not work like failure used in section 40(a)(ia) of the Act and it referred to only non-deduction of tax and disallowance of such p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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