Agrawal Roadlines Pvt. Ltd., Gandhidham V. The Dy. CIT, Circle-1(1)(2), Ahmedabad

ITA 2905/AHD/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0822 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 16-03-2020
• Assessment Year: 2013-2014
• Appeal Filed On: 22-12-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Depreciation; Revenue expenditure; Capital expenditure
• Section: 271(1)(c); 143(2); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SHR I AMARJIT SINGH , ACCOUNTANT MEMBER AND MS. MADHUMITA ROY , JUDICIAL MEMBER AGRAWAL ROADLINES PVT. LTD. A - 1004, ROSE WOOD ESTATE, NR. PANCH TIRTH BUNGLOWS, SATELLITE, AHMEDABAD PAN: AABCA6667M (APPELLANT) VS THE DY. CIT , CIRCLE - 1 ( 1 )(2 ) , AHMEDABAD (RESPONDENT) REVENUE BY : S H RI VIDHYUT TRI VEDI , SR. D . R. ASSESSEE BY: SHRI TUSHAR HEMANI , A.R. DATE OF HEARING : 16 - 0 3 - 2 020 DATE OF PRONOUNCEMENT : 27 - 05 - 2 020 / ORDER P ER : AMARJIT SINGH, ACCOU NTANT MEMBER : - THIS ASSESSEE S APPEAL FOR A.Y. 2013 - 14 , ARI SES FROM ORDER OF THE CIT(A) - 1, AHMEDABAD DATED 31 - 10 - 2 017 , IN PROCEEDINGS UNDER SECTION 1 4 3(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE SOLITARY GROUND OF APPEAL OF THE ASSESSE E IS AGAINST THE DECISION OF LD. CIT(A) IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER ON LIMITING I T A NO . 2905 / A HD/20 17 A SS ESSMENT YEAR 2013 - 14 I.T.A NO. 2905 /AHD /20 17 A.Y. 2013 - 14 PAGE NO AGRAWAL ROADLINES PVT. LTD. VS. DY. CIT 2 DEPRECIATION ON VEHICLES TO 30% INSTEAD OF 50% THEREBY MAKING DISALLOWANCE OF RS. 13 , 86 , 331/ - U/S. 32 OF THE ACT. 3. THE FACT IN BRIEF IS THAT RETURN OF INCOME DECLARING INCOME OF RS. 32 , 28 , 860/ - WAS FILED ON 28 TH SEP, 2013. THE CASE WAS SUBJECT TO SCRUTINY AND NOTICE U/S. 143(2) OF THE ACT WAS ISSUED ON 4 TH S EP, 2014. DURING THE COURSE OF ASSESSMENT PROCEE DINGS, THE ASSESSING OFFICER NOTICED THAT ASSES S EE HAS CLAIMED DEPRECIATION OF R S. 95 , 12 , 760/ - @ 50% ON HEAVY GOODS VEHICLE AS AGAINST ALLOWABLE DEPRECIA TION @ 30%. ON QUERY, THE ASSESSEE EXPLAINED TH A T CLAIM OF 50% DEPREC I ATION ON VEHICLE IS PERTAINED TO TRUCKS WHICH WERE ORIGINALLY PURCHASED IN ASS ESSMENT YEAR 2009 - 10 AND 2010 - 2011. THE ASSESSEE HAS FURTHER SUBMITTED THAT IN ORDER TO KEEP VEHIC LE PURCHASED IN PROPER CONDITION IT HAS INCURRED EXPENSES FOR REN OVATION OF DRIVERS CABIN ETC. T HEREFORE, THE SAID AMOUNT WAS CAPITALIZED AND DEPRECIATION W AS CLAIMED AT 50% AS IT IS IN THE SAME BLOCK OF ASSET. THE ASSESSING OFFICER HAS NOT AGREED WITH THE SUBMISSION OF THE ASSESSEE AND RESTRICTED THE CLAIM OF DEPRECIATION @ 30% AND DISALLOWED EXCESS CLAIM OF DEPRECIATION TO THE AMOUNT OF RS. 13 , 86 , 331/ - . 4 . AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. 5. D URING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LD. COUNSEL HAS FILED PAPER BOOK COMPRISING COPIES OF DOCUMENT AND DETAIL OF INFORMATION FURNISHED BEFORE THE LOWER AUTHORITIES. AFTER REFERRING THE PAGES OF PAPER BOOK, THE LD. COUNSEL HAS CONTENDED THAT ASSESSEE HAS MADE I.T.A NO. 2905 /AHD /20 17 A.Y. 2013 - 14 PAGE NO AGRAWAL ROADLINES PVT. LTD. VS. DY. CIT 3 DEPRECIATION CORRECTLY IN RESPECT OF REPAIR CARRIED OUT ON COMMERCIAL VEHICLES PURCHASED IN FINANCIAL YEAR 2009 - 10 AND 2010 - 11 ON WHICH DEPRECIATION IS AVAILABLE @ 50%. THE LD. COUNSEL HAS FURTHER CONTENDED THAT OTHERWISE THE WHOLE AMOUNT OF EXPENDITURE SHOULD BE ALLOWED AS REVENUE EXPENDITURE AS THE AMOUNT OF REPAIR IS NOT CATEGORIZED TO ANY OTHER BLOCK OF A SSET. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE HAS SUPPORTED THE ORDER OF LOWER AUTHORITIES. 6. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. DURING THE COURSE OF ASSESSMENT, THE ASSESSEE HAS CLAIMED DEPRECIATION @ 50% I .E. ON TANKERS. DURING THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER HAS RESTRICTED THE CLAIM OF DEPRECIATION @ 30% IN RESPECT OF ADDITION MADE TO SUCH COMMERCIAL VEHICLES. THE COMMERCIAL VEHICLES WERE PURCHASED BY THE ASSESSEE DURING F.Y. 2008 - 09 AND 2009 - 10 WHICH WERE ELIGIBLE TO SPECIAL RA TE OF DEPRECIATION @ 50%. IT IS NOTICED THAT NO NEW VEHICLE HAS BEEN PURCHASED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. IT IS OBSERVED THAT NO DEPRECIATION CAN BE CLAIMED FOR INDIVIDUAL ASSETS UNDER IN COME TAX ACT BECAUSE OF CONCEPT OF BLOCK OF ASSET S . T HEREFORE, WE ARE OF THE VIEW THAT THE DEPRECIATION IN THE CASE OF THE ASSESSEE IS ELIGIBLE AS PER THE BLOCK OF ASSET OTHERWISE IF SUCH EXPENDITURE ARE PUT IN THE CATEGORY OF REPAIR/REVENUE EXPENDITURE THEN THE FULL CLAIM OF SUCH EXPENDITURE ARE TO BE ALLOWED. SINCE THE ASSESSING OFFICER HAS TREATED SUCH EXPENDITURE AS CAPITAL EXPENDITURE, THEREFORE, WE CONSIDER THAT NO NEW ASSET HAS BEEN CREATED ON RENOVATION OF THE COMMERCIAL VEHICLE . THEREFOR E, THE CLAIM OF THE ASSESSEE FOR DEPRECIAT ION @ 50% APPLICABLE TO THE PARTICULAR BLOCK OF ASSETS IS JUSTIFIED . ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO PROVIDE THE I.T.A NO. 2905 /AHD /20 17 A.Y. 2013 - 14 PAGE NO AGRAWAL ROADLINES PVT. LTD. VS. DY. CIT 4 DEPRECIATION @ 50% APPLICABLE TO THE BLOCK OF ASSETS IN THE CASE OF THE ASSESSEE. ACCORDIN GLY, THIS APPEAL OF THE ASSESSEE IS ALLOWED. 7. GROUND NO.2 IS NOT PRESSED, SO, THE SAME IS DISMISSED AS NOT PRESSED. GROUND NO. 4 IS PERTAINING TO LEVY OF INTEREST U/S. 234A/B/C. THIS GROUND OF APPEAL IS DISMISSED AS CHARGING OF INTEREST U/S. 234A/B/C I S MANDATORY. GROUND NO. 5 IS AGAINST ACTION OF ASSESSING OFFICER IN INITIATING PENALTY U/S. 271(1)(C) OF THE ACT. THE SAME IS ALSO DISMISSED AS IT IS IMMATURE AT THIS STAGE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 27 - 05 - 20 20 SD/ - SD/ - ( MADHUMITA ROY ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 27 /05 /2020 / COPY OF ORDE R FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,