The ACIT 4(1), Indore V. M/s. Umbra Mining Pvt. Ltd., Indore

ITA 375/IND/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6646 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-05-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 24-05-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V J BORICHA
• Keywords: Depreciation; Opportunity of being heard; Set aside
• Section: 142(1); 32

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.375/IND/2017 ASSESSMENT YEAR: 2013-14 ACIT - 4 (1), INDORE / VS. M/S. UMBRA MINING PVT. LTD. M- 3, SAPNA CHAMBER, 12/1, SOUTH TUKOGANJ, INDORE ( REVENUE ) ( RE SPONDENT ) PAN: AABCU3251H REVENUE BY SHRI V.J. BORICHA SR. DR RESPONDENT BY NONE DATE OF HEARING: 01.05.2019 DATE OF PRONOUNCEMENT: 07.05.2019 / O R D E R PER MANISH BORAD, A.M: THIS APPEAL AT THE INSTANCE OF REVENUE PERTAINING TO A.Y. 2013-14 IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX(APPEALS)-II, INDORE, (IN SHORT CIT(A)), DATED 06.02.2017 WHICH IS ARISING OUT OF T HE ORDER U/S 143(3)OF THE INCOME TAX ACT 1961(HEREINAFTER CALL ED AS UMBRA MINNING PVT. LTD. ITANO.375/IND/2017 2 THE ACT) FRAMED ON 17.03.2016 BY ACIT,4(1) INDORE. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1.WHETHER ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS JUSTIFIED IN DELETING THE ADDITION M ADE ON ACCOUNT OF DEPRECIATION AND IN ALLOWING THE DEPRECI ATION @30% ON DUMPERS WHICH WERE USED FOR IN OWN BUSINESS BY THE ASSESSEE. WHILE HOLDING SO THE LD. CIT(A) HAS FAILED TO APPRE CIATE THE PROVISIONS OF SECTION 32 OF THE IT ACT WHERE THE DE PRECIATION @ 30% IS ALLOWABLE ONLY ON THE VEHICLES RUNNING ON HIRE. 2. WHEN THE CASE WAS CALLED NON-APPEARED ON BEHALF OF T HE ASSESSEE. CASE WAS HEARD WITH THE ASSISTANCE OF LD. DEPARTMENTAL REPRESENTATIVE (DR) AND RECORDS AVAILABLE. 3. BRIEF FACTS OF THE CASE AS CULLED OUT FROM THE RECO RDS ARE THAT THE ASSESSEE IS A PRIVATE LIMITED CO. ENGAGED IN TH E BUSINESS OF MINING AND CRUSHING OF STONES. E-RETURN OF INCOME FILED ON 09.10.2013 DECLARING TOTAL INCOME OF RS.20,50,577/-. CASE WAS PICKED UP FOR SCRUTINY FOLLO WED BY SERVING OF NOTICES U/S 143(2) AND 142(1) OF THE A CT. VARIOUS DETAILS WERE CALLED. REPLY DULY SUBMITTED BY T HE ASSESSEE. VARIOUS ADDITIONS WERE MADE BUT AS THE INSTANT APPEAL RELATES TO DISALLOWANCE OF DEPRECIATION, FACT RELATI NG THERETO IS THAT DEPRECIATION @30% CLAIMED FOR VEHICLE S RUNNING ON HIRE BUT THE LD. AO WAS OF THE VIEW THAT THE ASSESSEE IS ELIGIBLE TO ONLY 15% DEPRECIATION. FOR TH IS UMBRA MINNING PVT. LTD. ITANO.375/IND/2017 3 REASON DISALLOWANCE FOR DEPRECIATION OF RS.73,67,771/- WAS MADE ALONG WITH OTHER ADDITIONS. INCOME ASSESSED AT RS. 97,91,020/-. 4. AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFORE THE L D. CIT(A) AND PARTLY SUCCEEDED. 5. NOW THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL RAI SING SOLE ISSUE OF DELETING DISALLOWANCE OF DEPRECIATION BY THE LD. CIT(A). 6. LD. DEPARTMENTAL REPRESENTATIVE ( IN SHORT LD.DR) VEHEMENTLY ARGUED SUPPORTING THE ORDER OF THE ASSESSI NG OFFICER AND SUBMITTED THAT THE ASSESSEE IS NOT INTO TH E BUSINESS OF TRANSPORTATION AND THEREFORE, ADDITION OF DEPRECIATION CLAIMED ON VEHICLES FOR RUNNING THEM ON HIRE SHOULD NOT BE ALLOWED. 7. WE HAVE HEARD LD. DR AND PERUSED THE RECORD PLACED BEFORE US. THE GRIEVANCE OF THE REVENUE IS CONFINED TO DELETION OF DISALLOWANCE OF DEPRECIATION CLAIMED BY THE ASSESSEE @ 30% ON DUMPERS USED BY THE ASSESSEE FOR I TS OWN BUSINESS. WE OBSERVE THAT THE LD. CIT(A) ALLOWED THE ASSESSEES CLAIM OF 30% DEPRECIATION TREATING THE VEHIC LES TO HAVE BEEN USED FOR HIRE AND TRANSPORTATION BY TAKING A VIEW THAT WHERE THE GOODS ARE TRANSPORTED FROM ONE PLAC E TO ANOTHER AND THERE MAY BE ONE PERSON WHO MAY TAKE T HE UMBRA MINNING PVT. LTD. ITANO.375/IND/2017 4 SERVICE OF ONE VEHICLE FOR TRANSPORTATION OR THERE MA Y BE MANY, IT DOES NOT MAKE ANY DIFFERENCE. 8. UNDER THE PROVISION OF INCOME TAX ACT DEPRECIATIO N @ 30% IS ALLOWED ON THE COST/WDV OF MOTOR BUSES, MOTOR LORRIES AND MOTOR TAXIES USED IN A BUSINESS OF RUNNIN G THEM ON HIRE. 9. FROM PERUSAL OF THE FINDING OF THE LD. CIT(A) IT DOES NOT TRANSPIRE AS TO WHETHER THE ASSESSEE WHO IS MAINLY INTO THE BUSINESS OF QUARRYING, CRUSHING AND SALE OF STONES , EARNED OR RECEIVED ANY AMOUNT TOWARDS FREIGHT ON TRANSPORTATION CHARGES FOR PROVIDING THE SERVICES OF TRANSPORTING STONE TO SITE OF THE CUSTOMERS BY USE O F ITS DUMPERS. JUST BECAUSE THE ASSESSEE IS TRANSPORTING TH E EXCAVATED STONES TO THE SITE OF THE CUSTOMERS, ONE CAN NOT PRESUME THAT THE ASSESSEE IS INTO BUSINESS OF TRANSPORTATION OR RUNNING THE DUMPERS ON HIRE. 10. IN OUR CONSIDERED VIEW LD. CIT(A) OUGHT TO HAVE EXAMINED THIS FACT BY CALLING NECESSARY DETAILS FROM THE ASSESSEE INCLUDING SALES BILLS OR OTHER RECEIPTS WHIC H COULD PROVE THAT TRANSPORTATION OR FREIGHT CHARGES WERE CHARGE D BY THE ASSESSEE TO ITS CUSTOMERS FOR SENDING THE GOO DS TO THE SITE OF THE CUSTOMER WHICH MAY PROVE THAT BUSINE SS OF HIRING OR TRANSPORTATION WAS PARALLELY CARRIED BY ASSESSE E. UMBRA MINNING PVT. LTD. ITANO.375/IND/2017 5 WE THEREFORE, SET ASIDE THE ISSUES RAISED IN THIS APPE AL TO THE FILE OF THE LD. CIT(A) FOR AFRESH ADJUDICATION IN THE LIGHT OF OUR OBSERVATION MADE HEREIN ABOVE AFTER PROVIDING ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. 11 . IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 07 .05. 2019. SD/- (KUL BHARAT) SD/- (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER INDORE; DATED : 07/05/2019 CTX? P.S/. . . COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR