TMI Blog2020 (9) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... ing for the number of days, the asset was put to use comes out 180 days which is outside the purview of the proviso to section 32 of the Act. The above working as shown by the assessee was not disputed by the learned DR appeared for the revenue. In view of the above, we hold that the assessee is entitled for depreciation at the rate prescribed under the provisions of law. Accordingly we set aside the finding of the CIT (A) and direct the AO to delete the addition made by him. Hence the ground of appeal of the assessee is allowed. Disallowance of depreciation on vehicles - vehicles ready to use - HELD THAT:- Cars purchased by the assessee were ready to use as on the date of purchase i.e. prior to 28th September 2011. Accordingly, even if it is assumed that the vehicles were registered on 12th October 2011 then also the assessee is eligible for depreciation at the rate of 15% for the simple reason that the vehicles were ready to use. We hold that the assessee was eligible for depreciation at the rate of 15% on the value of the vehicles purchased during the year. Accordingly we set aside the order of the learned CIT (A) and direct the AO to delete the addition made by him. Hen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Therefore, advancement of substantial justice is the prime factor while considering the reasons for condoning the delay. 4.1 We also note that the case on merit appears to be in favour of the assessee. But there is a technical defect in the appeal since the appeal was not filed within the period of limitation for the reason as described above. There was the affidavit filed by the assessee explaining the reasons for the delay in filing the appeal before us. However, the Revenue has not filed any counter-affidavit to deny the submission made by the assessee. 4.2 It is also important to note that Hon ble Supreme Court in the case of Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471) laid down certain principles for considering the condonation petition for filing the appeal which are reproduced hereunder: (1) Ordinarily, a litigant does not stand to benefit by lodging an appeal late (2) Refusing to condone delay can result in a meritorious matter being thrown at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n confirming that disallowance U/S.14A is to be made while calculating book profit u/s. 115 JB. 7. Both the lower authorities have passed the orders without properly appreciating the facts and they further erred in grossly ignoring various submissions, explanations and information submitted by the appellant from time to time which ought to have been considered before passing the impugned order. This action of the lower authorities is in clear breach of law and Principles of natural Justice and therefore deserves to be quashed. 8. The learned CIT(A) has erred in law and on facts of the case in confirming action of the ld.AO in levying interest u/s.234 A/B/C of the Act. 9. The learned CIT(A) has erred in law and on facts of the case in confirming action of the ld.AO in initiating penalty u/s.271(1)(c) of the Act. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal. 6. At the outset the learned counsel for the assessee before us submitted that he has been instructed by the assessee not to press ground No. 2, 3 and 6 due to smallness of amount. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the AO on the reasoning that the asset was not put to use. However, on perusal of the order of the ITAT bearing ITA No. 928/AHD/2016 dated 20 January 2020, we note that the acquisition of the assets was not for extension of existing business and therefore the interest paid thereon was allowed as deduction. The relevant extract of the order of the ITAT reads as under: We have heard the rival contentions of both the parties and perused the materials available on record. Admittedly, there was the acquisition of the new machinery out of the borrowed fund which was not put to use during the year under consideration. But the question arises whether such acquisition of machinery amounts to the extension of the existing business. None of the authorities below has put some light on this aspect. As such the proviso to section 36(1)(iii) of the Act mandates to capitalize the amount of interest on the machine acquired out of the borrowed fund provided such acquisition results in the extension of the business. The relevant proviso to section 36(1)(iii) of the Act reads as under: 36. (1) The deductions provided for in the following clauses shall be allowed in respect of the matte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e controversy in the case on hand, there was no need to refer to any other document as all the relevant facts are emanating from the order of the AO. Accordingly, we are not impressed with the finding of the learned CIT (A) on the issue of additional documents filed by the assessee on the reasoning that these documents were not filed in consonance with the provisions of rule 46A of Income Tax Rule. Hence the ground of appeal of the assessee is allowed. 13. The 2nd issue raised by the assessee is that the learned CIT (A) erred in confirming the disallowance of depreciation for ₹ 6,58,057- claimed on the machineries. 14. The AO during the assessment proceedings found that the assessee got the registration of the machinery with the RTO dated 4th October 2011 i.e. after 30th September 2011. Accordingly he was of the view that the assessee can claimed depreciation at 50% of the actual rate of depreciation as the machine was used for a period less than 180 days. Accordingly, the AO disallowed the excess depreciation amounting to ₹ 6,58,057/- (7.5% of ₹ 84,63,093/-) and added to the total income of the assessee. 15. Aggrieved assessee preferred an appeal to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Number of days in October 2011 28 days 2. Number of days in November 2011 30 days 3. Number of days in December 2011 31 days 4. Number of days in January 2012 31 days 5. Number of days in February 2012 29 days being a leap year 6. Number of days in March 2012 31 days Total number of days 180 days 18.3 The provisions of section 32 of the Act provides that the asset put to use for less than 180 days, meaning thereby 179 days or less, then such asset will be eligible for depreciation at the rate 50% of the actual rate of depreciation. The above working for the number of days, the asset was put to use comes out 180 days which is outside the purview of the proviso to section 32 of the Act. The above working as shown by the learned counsel for the assessee was not disputed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 28.9.2011 by the RTO but the registration of the vehicle has been made only on 12.10.2011 as evident from the Registration Certificate. The certificate was also valid from 12.10.2011 to 11.10.2026 only. Thus it was clear from the copy of the certificate produced that the registration date was 12.10.2011 and 28.9.2011 was the fee payment date which was irrelevant to be considered for put to use of the vehicle on roads. Even the appellant has not provided any details and evidences to prove that during the period from 28.9.2011 to 12.10.2011 these vehicles have been used for the business purposes. Thus the deprecation granted by the AO at one half t of the specified rates is found justified and hence the same is confirmed. Being aggrieved by the order of the learned CIT (A), the assessee is in appeal before us. 24. The learned AR before us reiterated the submission as made before the authorities below whereas, on the other hand the learned DR before us relied on the orders of lower authorities. 25. We have heard the rival contentions of both the parties and perused the materials available on record. From the preceding discussion we find that the assessee has purchased the ..... 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