The Dy. CIT, Circle-1(1)(1), Ahmedabad V. M/s. Aakash Oil Field Services Pvt. Ltd., Ahmedabad

ITA 2416/AHD/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8503 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 23-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DEVATIA
• Keywords: Depreciation; Earning of tax free income
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: SHR I S. S. GODARA , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER THE DCIT, CIRCLE - 1(1)(1), AHMEDABAD (APPELLANT) VS AAKASH OIL FIELD SERVICES PVT. LTD. 52B - B, NEW YORK TOWER - A, NR. THALTEJ CROSS ROAD, THALTEJ S.G. HIGHWAY, AHMEDABD - 380054 PAN: AADCA4550D (RESPONDENT) REVENUE BY : S H RI PRASOON KABRA , SR. D . R. ASSESSEE BY: S H RI S.N. DEVATIA , A.R. DATE OF HEARING : 27 - 03 - 2 018 DATE OF PRONOUNCEMENT : 19 - 04 - 2 018 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS REVENUE S APPEAL FOR A.Y. 2012 - 13 , ARIS ES FROM ORDER OF THE CIT(A) - 1 , AHM EDABAD DATED 26 - 07 - 2016 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE REVENUE HAS RA ISED FOLLOWING GROUNDS OF APPEAL: - (1) THAT THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.77,77,708/ - MADE ON ACCOUNT OF DISALLOWANCE OF EXCESS DEPRECIATION CLAIMED@ 30% INSTEAD OF@ 15% ON VEHICLE. (2) THAT THE ID. CIT(A) ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.9,288/ - MADE ON ACCOUNT OF DISALLOWANCE U/S 14A R.W. RULE 8D OF THE ACT. I T A NO . 2416 / A HD/ 20 16 A SSESSMENT YEAR 2012 - 13 I.T.A NO. 2416 /AHD/20 16 A.Y. 2012 - 13 PAGE NO DCIT VS. AAKASH OIL FIELD SERVICES PVT. LTD. 2 3. THE BRIEF FACT OF THE CASE IS THAT RETURN OF INCOME DECLARING INCOME OF RS. 85,92,100/ - WAS FILED BY T HE ASSESSEE. SUBSEQUENTL Y , THE CASE WAS SELECTED UNDER SCRUTINY BY ISSUING OF NOTICE U/S. 143(2) OF THE ACT ON 6 TH AUGUST, 2013. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS CLAIMED DEPRECIATION @ 30% OF TRUCK AND TRUCK MOUNT ED EQ UIPMENT TO THE AMOUNT OF RS. 1,55,5 5 , 416/ - . THE ASSESSING OFFICER HAS RESTRICTED T H E CLAIM OF DEPRECIATION TO 15% ON THE GROUND THAT ASSESSEE COMPANY IS NOT ENGAGED IN THE BUSINESS OF TRANSPORTATION OF GOODS ON HIRE BUT WAS ENGAGED IN THE BUSINESS O F OIL FIELD SERVICES/RI G SHIPPING SERVICES WORK FOR WHICH VEHICLES WERE USED. FURTHER, DURING SCRUTINY THE ASSESSING OFFICER HAS NOTICED THAT ASSESSEE MADE INVESTMENT IN SHARES TO TUNE OF RS. 80,000/ - AS ON 31 ST MARCH 2012. HOWEVER, THE ASSESSEE HAS NOT DISALL OWED ANY EXPENDITURE AS PROVIDED U/S. 14A R.W RULE 8D OF THE ACT. THEREFORE, THE ASSESSING OFFICER HAS WORKE D OUT DISALLOWANCE OF RS. 9 , 288 AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 4. AGGRIEVED ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS ALLOWED THE APPEAL OF THE ASSESSEE. REGARDING FIRST ISSUE OF CLAIM OF DEPRECIATION, THE LD. CIT(A) HAS STA T ED THAT IN T H E CASE OF THE ASSESSEE IN THE PRECEDING ASSESSMENT YEAR 2011 - 12, IT WAS HELD THA T ASSESSEE IS ALLOWED FOR DEPRECIATION @ 30% AS T HE ASSESSEE WAS ENGAGED IN THE BUSINESS OF HIRING OF VEHICLES TO PARTIES NAMELY ONGC, JOSHI TECHNOLOGIES INTERNATIONAL ( JTI ) , GUJARAT STATE PETROLEUM CORPORATION LTD. ETC. REGARDING DISALLOWANCE U/S. 14A R.W.S. 8D, THE LD. CIT(A) HAS DELETED THE ADDITION ON THE GROUND THAT DISALLOWANCE U/S. 14A R.W. RULE 8D CANNOT BE MADE AS THE ASSESSEE HAS NOT EARNED ANY EXEMPT INCOME. 5. DURING T HE COURSE OF PENALTY PROCEEDINGS BEFORE US, LD. COUNSEL HAS CONTENDED THAT CO - ORDINATE BENCH OF THE ITAT IN THE C ASE OF THE ASSESSEE ITSELF VIDE ITA NO. 3207/AHD/2014 DATED 23/08/2017 HAS DECIDED THE IDENTICAL ISSUE ON I.T.A NO. 2416 /AHD/20 16 A.Y. 2012 - 13 PAGE NO DCIT VS. AAKASH OIL FIELD SERVICES PVT. LTD. 3 PROVIDING DEPRECIATION @ 30% IN FAVOUR OF THE ASSESSEE. ON THE SECOND GROUND, THE LD. COUNSEL HAS CONTENDED THAT AS HELD BY THE VARIOUS DECISIONS O F THE HIGH COURTS LIKE HON BLE DELHI HIGH COURT I N THE CASE OF HOLICIM INDIA PVT. LTD. W HEN THERE IS NO EXEMPT INCOME, NO D ISALLOWANCE U/S. 14A TO BE MADE . ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE HAS SUPPORTED THE ORDER OF THE ASSESSING OFF ICER. 6 . WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD CAREFULLY . REGARDING THE FIRST ISSUE OF CLAIM OF DEPRECIATION @ 30% ON H IRING O F TRUCKS AND TRUCK MOUNTED EQUIPMENT , WE HAVE NOTICED THAT THE CO - ORDINATE BENCH OF THE ITAT AS MENT IONED SUPRA IN THIS ORDER IN THE CASE OF THE ASSESSEE ON THE IDENTICAL CASE HELD THAT T H E ASSESSE HAD CARRIED OUT HIRING ACTIVITY AND THE SAME WAS REFLECTED IN THE CONTRACT RECEIPT, THEREFORE, THE FINDIN G OF THE LD. CIT(A) WAS UPHELD. IN VIEW OF T HE SIMILA R FACTS EXISTED DURING THE YEAR UNDER CONSIDERATION , RESPECTFULLY FOLLOWING THE DECISION OF THE CO - ORDINATE BENCH OF T HE ITAT, WE DO NOT FIND ANY REASON TO INTERFERE IN THE DECISION OF LD. CIT(A), THEREFORE, THE APPEAL OF T HE REVENUE ON T HIS ISSUE IS DISM ISSED. REGARDING SECOND ISSUE OF DISALLOWANCE OF RS. 9 , 288/ - U/S. 14A R.W. RULE 8D OF THE IT ACT WE UPHOLD THE DECISION OF THE LD. CIT(A) T HAT SUCH DISALLOWANCE CANNOT BE MADE AS ASSESSEE HAS NOT EARNED ANY EXEMPT INCOME. ACCORDINGLY, THIS GROUND OF THE REVENUE IS ALSO DISMISSED. 7 . IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 19 - 04 - 201 8 SD/ - SD/ - ( S.S. GODARA ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 19 /04 /2018 / COPY OF ORDER FORWARDED TO: - I.T.A NO. 2416 /AHD/20 16 A.Y. 2012 - 13 PAGE NO DCIT VS. AAKASH OIL FIELD SERVICES PVT. LTD. 4 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,