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2018 (1) TMI 142 - AT - Income TaxEntitled to the depreciation on the block of asset consisting of motor car remaining after crediting sale proceeds of the motor car sold during the year - Held that - We have observed that the assessee sold motor car but there were other motor cars also existing in the block of assets and the said block of asset of motor car has not ceased to exist as on 31.03.2009 . The assessee has claimed loss on the sale of motor car of ₹ 26,686 which was wrongly debited to P&L account, however the assessee is entitled to the depreciation on the block of asset consisting of motor car remaining after crediting sale proceeds of the motor car sold during the year and to that extent depreciation need to be re-worked to be allowed in accordance with provisions of Section 32 . Thus, this matter needed to be restored to the file of the A.O for re-computation of depreciation in accordance with law after necessary verifications and examination. Disallowance of Renovation expenses - Held that - We have observed that the assessee has incurred expenses of ₹ 95,94,810/- on account of renovation expenses of the premises for his hospitality business wherein renovation was carried out by the assessee . The assessee could not file the evidences before the A.O to substantiate its claim that these are revenue expenses allowable under the Act. The assessee has furnished additional evidences before learned CIT-A who has refused to admit the same . After considering the material on record and hearing the parties , We are of the considered view that evidences which were filed before the learned CIT-A need to be admitted and adjudicated on merits in accordance with law to sub-serve the interest of substantial justice. Thus, we hereby direct to admit these additional evidences filed by the assessee before learned CIT(A) Disallowance of provision of bonus - Held that - We did not find any infirmity in the order of learned CIT-A in dismissing the ground of appeal as not been pressed by the assessee because in any case assessee has itself submitted that assessee will claim these expenses in A.Y 2010-11 based on actual payments for the bonus made to the employees in the month of October 2009 which in our considered view is in consonance with provisions of Section 43B(c) r.w.s. 36(1)(ii) . The learned counsel for the assessee has fairly agreed before us that this ground may be dismissed. Hence keeping in view entire factual matrix of the issue we dismiss this ground in the light of the above discussion. Violation of provisions of Section 40(a)(ia) - assessee has claimed these expenses on which income-tax was deducted at source which was paid late beyond the period prescribed u/s 40(a)(ia) - Held that - We have observed that the assessee has itself submitted before learned CIT-A that assessee has claimed these expenses on which income-tax was deducted at source which was paid late beyond the period prescribed u/s 40(a)(ia) , in AY 2010-11 and thus, the claim of expenses can be allowed in A.Y 2010-11 after verification by the AO . The learned CIT-A has dismissed this ground on the basis of submissions made by the assessee. We do not find any infirmity in the decision of learned CIT-A in dismissing this ground as in any case there will be no prejudice to the assessee as the same expenses shall be allowed in the subsequent year i.e. 2010-11 in which assessee has paid the TDS to the credit of Central Government , after due verification and examination by the AO. We dismiss this ground. Non granting of total TDS receivable by the assessee - Held that - We do not find any infirmity in the order of learned CIT-A in issuing directions to the A.O to verify the claim of the assessee on merits after due verification with 26AS. We direct the A.O to verify the claim of the assessee and allow the credit of prepaid taxes by way of TDS receivable as is refelected in 26AS after due verification on merits in accordance with law.
Issues Involved:
1. Condonation of delay in filing the appeal. 2. Disallowance of loss on sale of motor car. 3. Disallowance of renovation expenses. 4. Disallowance of provision for bonus. 5. Disallowance under Section 40(a)(ia) for late payment of TDS. 6. Non-granting of total TDS credit. 7. Charging of interest under Sections 244A and 234D. Detailed Analysis: 1. Condonation of Delay in Filing the Appeal: The appeal was filed late by 42 days due to the Chartered Accountant's professional engagements. Affidavits were submitted by both the Chartered Accountant and the Director of the assessee company. The Tribunal condoned the delay, emphasizing the interest of substantial justice, referencing the Supreme Court decision in Collector, Land Acquisition v. Mst. Katiji & Ors. 2. Disallowance of Loss on Sale of Motor Car: The AO disallowed the loss of ?26,686 claimed on the sale of a motor car, as the block of motor cars had not ceased to exist. The CIT(A) upheld this disallowance as the assessee did not press this ground of appeal. The Tribunal directed the AO to re-compute the depreciation on the block of assets, ensuring proper verification and providing the assessee with an opportunity to be heard. 3. Disallowance of Renovation Expenses: The AO treated ?95,94,810 of renovation expenses as capital expenditure due to lack of detailed evidence. The CIT(A) partially allowed the expenses but did not admit additional evidence. The Tribunal directed the AO to admit the additional evidence and re-adjudicate the issue, ensuring the assessee is given an opportunity to be heard. 4. Disallowance of Provision for Bonus: The AO disallowed ?26,11,067 of bonus provision, as it was paid in the subsequent financial year. The assessee did not press this ground before the CIT(A), and the Tribunal upheld this disallowance, noting the assessee's agreement to claim the expenses in the subsequent year as per Section 43B(c) read with Section 36(1)(ii). 5. Disallowance under Section 40(a)(ia) for Late Payment of TDS: The AO disallowed ?35,50,000 under Section 40(a)(ia) due to late payment of TDS. The CIT(A) dismissed the ground based on the assessee's submission to claim the expenses in the subsequent year. The Tribunal upheld this decision, noting that the expenses will be allowed in the subsequent year after verification by the AO. 6. Non-granting of Total TDS Credit: The AO allowed TDS credit of ?44,04,422 against a claim of ?54,75,552, based on the 26AS statement. The CIT(A) directed the AO to verify and allow the credit as per 26AS. The Tribunal upheld this direction, instructing the AO to verify the claim and allow the credit after due verification. 7. Charging of Interest under Sections 244A and 234D: The issue of interest under Sections 244A and 234D was deemed consequential to the other grounds and did not require separate adjudication. The Tribunal dismissed this ground accordingly. Conclusion: The appeal was partly allowed for statistical purposes, with directions for re-computation and verification on several grounds, ensuring the assessee is given proper opportunities to present evidence and be heard. The Tribunal emphasized adherence to principles of natural justice and substantial justice over technicalities.
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