2018 (12) TMI 979 - AT - Income Tax

Disallowance of depreciation on the lorry - Held that - Tribunal is of the considered opinion that the Assessing Officer has to verify the sale receipt, copy of which is available at page 12 of the paper-book and thereafter decide the issue afresh in the light of the judgment of Kerala High Court in Nidish Transport Corporation 1989 (3) TMI 34 - KERALA HIGH COURT , in accordance with law, after giving a reasonable opportunity to the assessee. Disallowance of commission expenses - claim of hire charges - AO disallowed the claim of the assessee on the ground that there was no voucher produced before him - the assessee claims that the vouchers were available to substantiate the payment of hire charges - Held that - This Tribunal is of the considered opinion that the matter needs to be reconsidered by the Assessing Officer. Accordingly, orders of both the authorities below are set aside and the entire issue is remitted back to the file of the AO. AO shall re-examine the matter in the light of the material that may be produced by the assessee and thereafter decide the issue afresh in accordance with law, after giving a reasonable opportunity to the assessee.

Summary

Issues:
1. Condonation of delay in filing appeal.
2. Disallowance of depreciation on a lorry.
3. Disallowance of commission expenses.

Analysis:
1. The appellant filed an appeal against the order of the Commissioner of Income Tax (Appeals) for the assessment year 2010-11, with a delay of 451 days. The Tribunal condoned the delay, finding sufficient cause on the part of the appellant for the delay and admitted the appeal.

2. Regarding the disallowance of depreciation on the lorry, the appellant's counsel argued that the purchase of the lorry justified the claim for depreciation, even without transfer of registration. Citing a judgment of the Kerala High Court, it was contended that transfer of ownership is not dependent on registration transfer. The Tribunal agreed, directing the Assessing Officer to verify the sale receipt and decide the issue considering the legal position.

3. The second issue pertained to the disallowance of commission expenses as hire charges. The appellant contended that the expenses were for hiring lorries and not commission. The Tribunal noted that vouchers were claimed to be available to support the payment of hire charges. Consequently, the matter was remitted back to the Assessing Officer for re-examination, with instructions to consider the evidence provided by the appellant.

In conclusion, the appeal was allowed for statistical purposes, and the orders of the lower authorities were set aside for both issues. The Assessing Officer was directed to re-examine the issues in light of the evidence presented by the appellant and decide afresh after providing a reasonable opportunity for the appellant to be heard.