2016 (8) TMI 1568 - AT - Income Tax

Disallowance of Depreciation - documentary evidence in support of purchase of two trucks not given - Commissioner (Appeals), refused to take cognizance of the documentary evidences submitted before him, stating that the assessee has not filed any application under rule 46A of the I.T. Rule, 1963 - Whether CIT(A) erred in rejecting the claim when depreciation is specifically shown in final accounts of company whose accounts have been audited? - HELD THAT - If the assessee had produced certain documentary evidence before the first appellate authority he should have considered the same instead of rejecting them purely on technical reasons. If the assessee had not complied strictly to the provisions of rule 46A, learned Commissioner (Appeals) could have pointed out the same to the assessee for enabling him to submit the additional evidences complying to the provision of rule 46A. From the photocopy of the documentary evidence produced before us in the from of a paper book it appears, the purchase invoice of two trucks are in the name of assessee. Similarly, R.C. Book also bear the name of the assessee. Further, certificate issued by the financing company G.E. Capital indicates that the assessee has repaid the amount to the finance company and no dues against the assessee is outstanding. These documentary evidences prima facie proves assessee s ownership over the two trucks. Admittedly, these are only photocopy submitted by the assessee. Therefore, to prove the authenticity of documentary evidences submitted before the Departmental Authorities, it is essential for the assessee to produce the original purchase invoice, R.C. book, insurance document, etc., for verification to conclusively establish its ownership over the two trucks. For enabling the assessee to do so, we restore the matter back to the file of the Assessing Officer for production of the original purchase invoice, R.C. book, insurance documents, etc., which could prove assessee s ownership over the two trucks. If on verification assessee s claim is found to be correct, the Assessing Officer must allow depreciation to the assessee for the two trucks. Assessee s appeal is allowed for statistical purpose

Summary

Issues:
Claim of depreciation on two trucks disallowed due to lack of supporting evidence and non-compliance with rule 46A.

Analysis:
1. The assessee, engaged in transportation and commission agent business, filed a return declaring nil income for the assessment year 2006-07. The Assessing Officer disallowed depreciation claim on two trucks due to missing supporting evidence for their purchase.

2. The assessee, during the appeal, submitted photocopies of purchase invoice, R.C. book, and a certificate from the financer to prove truck purchase. However, the Commissioner (Appeals) rejected these documents, citing non-compliance with rule 46A and lack of original supporting documents like purchase invoice, R.C. Book, etc.

3. The Authorized Representative argued that original documents were with the financing company, and photocopies were submitted. The Commissioner (Appeals) did not consider these photocopies due to the absence of an application under rule 46A. The Representative emphasized that the assessee, as the truck owner, should be entitled to claim depreciation.

4. The Tribunal noted that the Assessing Officer disallowed depreciation due to lack of evidence proving ownership. The Commissioner (Appeals) did not consider the photocopies presented by the assessee, leading to a technical rejection. The Tribunal found the photocopies indicating ownership but emphasized the need for original documents for verification.

5. The Departmental Representative supported the previous decisions but suggested giving another opportunity to produce original documents to establish ownership.

6. The Tribunal observed that the photocopies suggested ownership, but original documents were necessary for verification. The matter was remanded to the Assessing Officer for verification of original documents. If ownership is confirmed, depreciation should be allowed for the two trucks.

7. Ultimately, the Tribunal allowed the assessee's appeal for statistical purposes, emphasizing the importance of providing original documents to support ownership claims.