S.N. Malhotra & Sons, New Delhi V. ACIT, Circle- 62(1), New Delhi

ITA 6413/DEL/2017

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1405 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2014-2015
• Appeal Filed On: 20-10-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST DATED PASSED
• Keywords: Depreciation
• Section: 32

Judgement Text

1 ITA NO. 6413/DEL/2017 IN THE INCOME TAX APPE LLATE TRIBUNAL DELHI BENCH: G NEW DELHI BEFORE MS SUCHITRA KAMBLE, JUDICIAL ME MBER AND SHRI PRASHANT MAHARISHI, ACCO UNTANT MEMBER I.T.A. NO. 6413/DEL/20 17 (A.Y 2014-15) (THROUGH VIDEO CON FERENCING) S. N. MALHOTRA & SONS 7/60, RAMESH NAGAR, NEW DELHI PAN: AABFS6724N (APPELLANT) VS ACIT CIRCLE-62(1) NEW DELHI (RESPONDENT) ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST ORDER DATED 17/08/2017 PASSED BY CIT(A)-20, NEW DELHI FOR ASSESSMENT YEAR 2014-15. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE LD.CIT(A) HAS ERRED IN CONFIRMING AN ADDITION OF RS.8,02,313/- I .E. DEPRECIATION @ 15% ON JCB, TRUCKS AS AGAINST OF 30% CLAIMED BY TH E ASSESSEE AS PER THIRD PROVISO TO CLAUSE (II) OF SUB SECTION (1) OF SECTION (32) OF THE INCOME TAX ACT, 1961. 3. THE ASSESSEE IS A PARTNERSHIP FIRM AND ENGAGED I N THE BUSINESS OF CIVIL CONTRACTOR SHIP UNDER THE NAME AND STYLE OF M/S S. N. MALHOTRA & SONS. APPELLANT BY SH. D. R. ANTHAWAL, ADV RESPONDENT BY SH. PRAKASH DUBEY, SR. DR DATE OF HEARING 28.06.2021 DATE OF PRONOUNCEMENT 06.07.2021 2 ITA NO. 6413/DEL/2017 DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE H AS SHOWN NET PROFIT OF RS. 86,18,827/- ON GROSS RECEIPT OF RS.18,03,39,419/- T HEREBY SHOWING NP RATE OF 4.78%. RETURN OF INCOME WAS FIELD ON 25/10/2014 DE CLARING INCOME AT RS.86,18,830/-. THE ASSESSING OFFICER MADE DISALLO WANCE OF RS.2 LACS RELATING TO UNVERIFIED PURCHASES AND DISALLOWANCE ON EXCESS DEPRECIATION ON JCB, TRUCKS ETC AMOUNTING TO RS.8,02,313/-. THE ASSESSI NG OFFICER ALSO DISALLOWED OTHER EXPENSES AMOUNTING TO RS.1,33,873/- AND TELEP HONE EXPENSES AMOUNTING TO RS.3,368/-. THUS, THE ASSESSING OFFIC ER ASSESS THE TOTAL INCOME AT RS. 97,58,380/-. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE. 5. THE LD. AR SUBMITTED THAT THE CIT(A) ERRED IN C ONFIRMING ADDITION OF RS. 8,02,313/- I.E. DEPRECIATION AT 15% ON JCB, TRUCKS AS AGAINST OF 30% CLAIMED BY THE ASSESSEE AS PER 3 RD PROVISO TO CLAUSE (II) OF SUB SECTION 1 OF SECTION 32 OF THE INCOME TAX ACT. THE LD. AR SUBMITTED THAT ON SIMILAR FACTS, THE TRIBUNAL IN ITA NO. 4375/DEL/2012 FOR ASSESSMENT YEAR 2009-1 0 IN CASE OF ACIT VS. DEEPAK CHADHA DECIDED THE ISSUE AND ALLOWED 40% OF DEPRECIATION ON COMMERCIAL VEHICLE. THE LD. AR FURTHER SUBMITTED T HAT THE ASSESSEE IS USING THE JCB MACHINES AND TRUCK FOR HIS OWN BUSINESS AND THAT CANNOT BE THE GROUND FOR DISALLOWANCE OF THE DEPRECIATION TO THE EXTENT OF 30%. 6. THE LD. DR RELIED UPON THE ASSESSMENT ORDER AND THE ORDER OF THE CIT(A). 7. WE HAVE HEARD THE LD. DR AND PERUSED ALL THE REL EVANT MATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT THE ASSESSI NG OFFICER DISALLOWED DEPRECIATION ON TRUCKS AND JCB @ 30% AND ALLOWED TH E SAME @15% HOLDING THAT THE ASSESSEE DOES NOT RUN THE BUSINESS OF VEHI CLES ON HIRE. THE ASSESSEE IS UNDISPUTEDLY ENGAGED IN BUSINESS OF SUB-CONTRACTOR AND DOES NOT RUN THEM ON HIRE. THE CIT(A) ALSO CONFIRMED THE SAME. AFTER PER USAL OF 3 RD PROVISO TO SECTION 32(1)(II) OF THE INCOME TAX ACT, 1961, IT CAN BE SE EN THAT THE SAID SECTION IS NOT 3 ITA NO. 6413/DEL/2017 APPLICABLE IN THE PRESENT CASE OF THE ASSESSEE AS T HE ASSESSEE IS NOT RUNNING BUSINESS OF HIRING OF COMMERCIAL VEHICLES. IT IS AN ADMITTED FACT THAT THE ASSESSEE IS USING TRUCKS AND JCB ETC. FOR ITS OWN B USINESS. BESIDES THIS THE ANNEXURE I HAS ALSO GIVEN THE CATEGORIES UNDER WHIC H THE 30% OF DEPRECIATION IS ALLOWED. BUT ASSESSEES CASE DOES NOT FALL IN TH AT CATEGORY AS WELL, AS THE PRESENT ASSESSMENT YEAR BEFORE US IS 2014-15. THERE FORE, THE CIT(A) AS WELL AS THE ASSESSING OFFICER HAS RIGHTLY RESTRICTED THE CL AIM OF DEPRECIATION TO THAT OF 15%. THE DECISION CITED BEFORE US BY THE LD. AR IS NOT APPLICABLE IN THE PRESENT CASE AS IN THAT CASE THE USE OF THE COMMERCIAL VEHI CLE WAS FOR HIRE AND PURCHASE AND IT WAS CLEARLY MENTIONED IN ANNEXURE I OF THE RULES OF INCOME TAX RULES, 1962 FOR GRANTING 40% DEPRECIATION. THE FACTS ARE DIFFERENT IN PRESENT CASE. THEREFORE, THERE IS NO NEED TO INTERF ERE WITH THE FINDING OF THE CIT(A). THE APPEAL OF THE ASSESSEE IS DISMISSED. 8. IN RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 06TH DAY OF JULY, 2021. SD/- SD/- (PRASHANT MAHARISHI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 06/07/2021 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 4 ITA NO. 6413/DEL/2017