SHRI RAJ KUMAR PALIYA, Pipariya V. THE DCIT-1(1), Bhopal

ITA 617/IND/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5735 (ITAT-INDORE)
• Duration Of Justice: 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 07-09-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 10-06-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K G GOYAL
• Assessee Lawyers: N D PATWA S
• Keywords: Depreciation; Opportunity of being heard; Additional evidence
• Section: 147; 144

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE .., .., % BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER SHRI RAJ KUMAR PALIYA, M/S.D.A. CONSTRUCTION, BANSKHEDA, PIPARIYA. .. ./ PAN: ALKPP5181E VS. DY. CIT, 1(1), BHOPAL / APPELLANT / RESPONDENT / APPELLANT BY SHRI ASHISH GOYAL AND SHRI N.D.PATWA, ADVOCATES / RESPONDENT BY SHRI K.G. GOYAL, D. R. DATE OF HEARING 07.09.2016 DATE OF PRONOUNCEMENT 21.09.2016 / O R D E R PER O.P. MEENA, ACCOUTANT MEMEBR. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-I, BHOPAL .. . / I.T.A. NO.617/IND/2016 %' ' / ASSESSMENT YEAR: 2009-10 ITA NO.617/IND/2016 AY 2009-10-RAJKUMR PALIYA,PIPAR IYA PAGE 2 OF 8 [HEREINAFTER REFERRED TO AS THE CIT(A)] DATED 31.03 .2016 AND PERTAINS TO ASSESSMENT YEAR 2009-10 AS AGAINST APPE AL DECIDED IN ASSESSMENT ORDER PASSED U/S 147 R.W.S. 1 44 OF THE INCOME-TAX ACT, 1961, DATED 30.10.2014 OF DY. CIT, 1(1), BHOPAL [HEREINAFTER REFERRED TO AS THE AO]. 2. GROUND NOS. 1 & 2 RELATE TO CONFIRMING THE EX-PARTE ORDER PASSED U/S 144 OF THE INCOME-TAX ACT, 1961, A ND CONFIRMING THE REOPENING OF THE CASE U/S 147 OF THE ACT. 3. DURING THE COURSE OF HEARING BEFORE US, THE LD. COUNSEL OF THE ASSESSEE HAS NOT PRESSED THESE GROUN DS OF APPEAL. THEREFORE, THESE ARE TREATED AS DISMISSED. 4. GROUND NO. 3 RELATES TO DISALLOWANCE OF DEPRECIATION OF RS. 8,60,865/- CLAIMED ON DUMPERS AND TRUCKS AND CONFIRMING THE SAME WITHOUT CONSIDERING THE EXPLANAT ION OFFERED BY THE ASSESSEE. 5. FACTS IN BRIEF ARE THAT THE SCHEDULE OF FIXED ASSET S REVEALED THAT TATA DUMPERS AND TRUCKS COSTING TO RS . 1,14,78,184/- WERE ACQUIRED AND PUT TO USE FOR LESS THAN 6 MONTHS ( LESS THAN 180 DAYS ) IN THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR UNDER CONSIDERATION, WHEREAS THE ASS ESSEE ITA NO.617/IND/2016 AY 2009-10-RAJKUMR PALIYA,PIPAR IYA PAGE 3 OF 8 HAS WRONGLY CLAIMED DEPRECATION ON THEM @ 15%, WHEREA S THE ALLOWABLE DEPRECIATION WAS @ 7.5%. THEREFORE, EXCESS DEPRECIATION AMOUNTING TO RS. 8,60,865/- WAS DISALLO WED. 6. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT( A) AND ALSO FILED ADDITIONAL EVIDENCE AND MADE AN APPL ICATION UNDER RULE 46A OF I.T. RULES. THESE ADDITIONAL EVID ENCES WERE PROVIDED TO THE AO FOR HIS COMMENTS BY THE CIT(A)S LETTER DATED 21.10.2010. HOWEVER, THE AO VIDE LETTER DATE D 06.01.2016 MERELY SUBMITTED THAT THE ASSESSEE HAS N OT COMPLIED WITH THE NOTICES DURING THE ASSESSMENT PROC EEDINGS. THEREFORE, THE ADDITIONAL EVIDENCES MAY NOT BE ACCE PTED. 7. THE LD. CIT(A) HAS NOTED THAT THE DUMPERS AND TRUCK S WERE PURCHASED BY THE ASSESSEE DURING THE YEAR UNDER APPEAL AS ON 30.10.2008 AND, THEREFORE, THEY WERE PUT TO U SE FOR LESS THAN SIX MONTHS. THE DEPRECIATION CHART GIVEN IN TH E SUBMISSION PERTAINS TO NEW COMMERCIAL VEHICLES ACQUI RED ON OR AFTER 1 ST DAY OF JANUARY, 2009, BUT BEFORE THE 1 ST DAY OF OCTOBER, 2009 AND PUT TO USE BEFORE THE 1 ST DAY OF OCTOBER, 2009 FOR THE PURPOSE OF BUSINESS OR PROFESSION. SIN CE THE SUBMISSION GIVEN BY THE ASSESSEE FOR PURCHASE OF VE HICLES DOES ITA NO.617/IND/2016 AY 2009-10-RAJKUMR PALIYA,PIPAR IYA PAGE 4 OF 8 NOT FIT IN THE CRITERIA AS MENTIONED BY THE ASSESSE E, THEREFORE, THE DISALLOWANCE MADE BY THE AO WERE CONFIRMED. 8. AGGRIEVED WITH THE ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. 9. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED AS UNDER :- THE NEW ASSET BEING TRUCKS AND DUMPERS FALLS UNDER THE CATEGORY OF NEW COMMERCIAL VEHICLE. THE RATES OF DEPRECIATION IS EFFECTIVE FROM ASSESSMENT YEAR 2006-07 AND THE YEAR UNDER CONSIDERATION IS ASSESSMENT YEAR 2009-10. THE LIST OF ASSETS WITH THE DATE OF PURCHASE IS AS PER TABLE BEL OW :- S.NO. DATE OF PURCHASE ASSET AMOUNT DEPRECAITION CLAIMED @ 15% CORRECT DEPRECIATION AS PER RULE 6 PART A EXCESS DEPRECIATION CLAIMED THE DEPRECATION RATE IS 15% AS THE ASSET WITH SR.NO .1-4 FALLS UNDER III(1) OF PART A OF THE DEPRECATION CHART. BUT SINCE, PUT TO USE F OR LESS THAN 180 DAYS. EFFECTIVE RATE OF DEPRECATION WILL BE HALF I.E. 7.5% 1. 30.10.08 DUMPER 17,35,143.08 2,60,271.46 1,30,135.73 2. 30.10.08 DUMPER 17,35,143.08 2,60,271.46 1,30,135.73 3. 30.10.08 DUMPER 17,35,143.08 2,60,271.46 1,30,135.73 4. 30.10.08 DUMPER 17,35,143.08 2,60,271.46 1,30,135.73 19,41,085.84 5,20,542.92 5,20,542.92 THE ASSETS ACQUIRED AFTER 1.01.09 AND BEFORE 1.10.0 9 RATE IS 50% BUT SINCE PUT TO USE FOR LESS THAN 180 DAYS. EFFECTIVE RATE OF DE PRECIATION WILL BE HALF I.E. 25%. 5. 13.02.09 DUMPER 16,95,093.00 2,54,264 4,23,773.25 6. 13.02.09 DUMPER 16,95,093.00 2,54,264 4,23,773.25 7. 30.03.09 TRUCK 11,47,426.41 1,72,114 2,86,856.60 (4,53,761.10) ITA NO.617/IND/2016 AY 2009-10-RAJKUMR PALIYA,PIPAR IYA PAGE 5 OF 8 THUS, THE NET EXCESS DEPRECIATION CLAIMED IS ONLY RS. 66,781.82 (5,20,542.92 LESS 4,53,761.10). THE VEHICLES WERE PURCHASED FROM 30.10.08 TO 30.03.2009 ALONG WITH THE INVOICE, REGISTRATION CERT IFICATE ETC.( P. B. 32 TO 58) THE TOTAL OF THESE ASSETS IS 1.14,78,184/- AS PER THE CHART. 10. THE LD. DEPARTMENTAL REPRESENTATIVE HAS RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 11. WE HAVE CONSIDERED THE FACTS AND MATERIALS AVAILABL E ON RECORD. WE FIND THAT THE ADDITIONAL EVIDENCES F ILED BY THE ASSESSEE WERE SENT TO THE AO BY THE LD. CIT(A) . HO WEVER, THE AO WITHOUT EXAMINING THE FACTS OF THE CASE ON MERIT AND THE ADDITIONAL EVIDENCES REGARDING CLAIM OF PURCHASE OF TRUCKS AND DEPRECIATION THEREON SIMPLY FORWARDED HIS REMAND REP ORT THAT THE ADDITIONAL EVIDENCES MAY NOT BE ADMITTED. THIS ACTION OF THE AO IS NOT JUSTIFIABLE AND NO ONE SHOULD BE PUNI SHED WITHOUT AFFORDING DUE HEARING. MOREOVER, THE ASSESSM ENT ORDER WAS ALSO MADE U/S 144 OF THE ACT. FURTHER, IT IS EVI DENCE FROM THE CHART THAT THE ITEMS STATED AT SERIAL NOS. 5, 6 & 7 OF CHART IN PARA 9 ABOVE WERE ACQUIRED ON 13.02.2009 AND 30.0 3.2009. ITA NO.617/IND/2016 AY 2009-10-RAJKUMR PALIYA,PIPAR IYA PAGE 6 OF 8 THEREFORE, THE AO HAS TO EXAMINE THE SAME WHETHER TH ESE DUMPERS AND TRUCKS WERE ACTUALLY PUT TO USE DURING THE FINANCIAL YEAR ENDING ON 31 ST MARCH, 2009. FURTHER, THE ASSESSEES CLAIM THAT DEPRECIATION IS ALLOWABLE @ 50 % ON THE DUMPERS PURCHASED DURING 01.01.2009 TO 01.10.2009 I S ALSO TO BE EXAMINED AT THE END OF THE A.O. THEREFORE, TH IS IS RESTORED TO THE FILE OF THE AO TO EXAMINE THE CLAIM OF DEPRECIATION IN ACCORDANCE WITH LAW. THE AO SHALL PRO VIDE NECESSARY OPPORTUNITY TO THE ASSESSEE. 12. GROUND NO.3 RELATES TO DISALLOWANCES ON THE HIRE CHARGES AMOUNTING TO RS. 9,47,558/- U/S 40(A)(IA) O F THE INCOME-TAX ACT, 1961. 13. THE FACTS OF THE CASE ARE THAT THE AO HAS DISALLOWE D THE PAYMENT OF HIRE CHARGES AS ACCORDING TO HIM, NO TDS WAS MADE U/S 194 OF THE ACT. HOWEVER, THE ASSESSEE HAS SUBMITTED THAT THE PAYMENT MADE TO EACH PERSONS FOR HIRING CHARGES DOES NOT EXCEED TO RS. 1,20,000/- IN THE FI NANCIAL YEAR UNDER CONSIDERATION. THEREFORE, THERE WAS NO LIABILI TY TO DEDUCT THE TDS. LD. COUNSEL OF THE ASSESSEE ALSO SU BMITTED THAT NO AMOUNT WAS PAYABLE AS ON 31 ST MARCH, 2009. ITA NO.617/IND/2016 AY 2009-10-RAJKUMR PALIYA,PIPAR IYA PAGE 7 OF 8 THEREFORE, PROVISIONS OF SECTION 40(A)(IA) ARE NOT APPLICABLE IN THE LIGHT OF THE DECISION IN THE CASE OF DY. CIT VS . VEERA ASSOCIATES, 55 TAXMANN.COM 466 (VIZAG). 14. WE HAVE HEARD BOTH THE SIDES AND FIND FROM THE DETA ILS THAT THE CLAIM OF THE ASSESSEE THAT THE PAYMENT DOE S NOT EXCEED RS. 1.20 LAKHS DURING THE FINANCIAL YEAR UND ER CONSIDERATION, WAS NOT BEFORE THE AO. FURTHER, THE A O HAS NOT EXAMINED THIS ASPECT WHILE SUBMITTING HIS COMMENTS I N THE REMAND REPORT DATED 08.03.2016. THEREFORE, THIS ASP ECT NEEDS TO BE EXAMINED BY THE AO AND IF IT IS FOUND THAT TH E PAYMENTS TO INDIVIDUALS DOES NOT EXCEED RS. 1.20 LAKHS DURIN G THE FINANCIAL YEAR, THEN HE MAY CONSIDER THE SAME IN AC CORDANCE WITH LAW. ACCORDINGLY, THIS ISSUE IS SET-ASIDE TO THE FILE OF THE AO FOR DE NOVO CONSIDERATION, AFTER ALLOWING REASONA BLE OPPORTUNITY OF BEING HEARD. ITA NO.617/IND/2016 AY 2009-10-RAJKUMR PALIYA,PIPAR IYA PAGE 8 OF 8 15. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. THE ORDER HAS BEEN PRONOUNCED IN OPEN COURT ON THE 21 ST SEPTEMBER, 2016. SD/- (..) (D.T.GARASIA) JUDICIAL MEMBER SD/- (..) (O.P.MEENA) ACCOUNTANT MEMBER * / DATED : 21ST SEPTEMBER, 2016. CPU* 16.9