9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (7) TMI 1273 - AT - Income TaxAllowability of Higher depreciation on motor lorries/trucks - Company, which is engaged in the business of providing logistics solution - AO state that motor lorries/trucks were used by it for the said business rather than using the same in the business of running them on hire, the assessee-company was entitled to claim depreciation at the normal rate of 15% - HELD THAT - It is observed that the claim of the assessee for higher depreciation on motor lorries/trucks was disallowed by the AO after having recorded a finding that the same were used by the assessee-company for its own business of providing logistic solutions and not in the business of running them on hire. As rightly contended by the ld. D.R., the claim of the assessee for higher depreciation thus was disallowed by the AO after recording a specific adverse finding and the ld. CIT(Appeals) was not correct in observing that no such adverse finding was recorded by the AO in the assessment order and that the disallowance was made on the basis of vague reasons. We also find merit in the contention of the ld. D.R. that the case laws cited on behalf of the assessee before the ld.CIT(Appeals) were distinguishable on facts and the ld. CIT(Appeals) was not justified in relying on the same to allow the claim of the assessee for higher depreciation on motor lorries/trucks. In the present case, it appears that neither the AO nor the ld. CIT(Appeals) to have examined as to whether the assessee was in the business of hiring out its motor lorries/trucks in addition to its business of providing logistic solutions and whether it had actually earned any income by hiring the said vehicles. We, therefore, consider it fair and proper and in the interest of justice to set aside the impugned order passed by the ld. CIT(Appeals) on this issue and restore the matter to the file of the Assessing Officer for deciding the same afresh in accordance with law after necessary verification. The appeal of the Revenue is accordingly treated as allowed for statistical purposes. Disallowance u/s 14A applying Rule 8D - HELD THAT - As relying on the decision of this Tribunal in the case of REI Agro Limited (ITA No. 1811/KOL/2012), wherein it was held that while applying Rule 8D only that investment has to be considered which has yielded exempt income during the year under consideration. Since the said decision of this Tribunal in the case of REI Agro Limited 2013 (5) TMI 582 - ITAT KOLKATA has been upheld by the Hon ble Calcutta High Court 2013 (12) TMI 1517 - CALCUTTA HIGH COURT we do not find any infirmity in the impugned order of the ld. CIT(Appeals) giving relief to the assessee on this issue. The same is accordingly upheld dismissing Ground No. 2 of the Revenue s appeal.
Issues Involved:
1. Higher depreciation claim on motor lorries/trucks for A.Y. 2011-12. 2. Higher depreciation claim on motor lorries/trucks for A.Y. 2014-15. 3. Disallowance under section 14A for A.Y. 2014-15. Issue-wise Detailed Analysis: 1. Higher Depreciation Claim on Motor Lorries/Trucks for A.Y. 2011-12: The Revenue challenged the decision of the Commissioner of Income Tax (Appeals) [CIT(A)] who allowed the assessee's claim for higher depreciation on motor lorries/trucks. The assessee, a logistics solution provider, claimed higher depreciation on the grounds that the vehicles were used in the business of running them on hire. The Assessing Officer (AO) originally disallowed the higher depreciation, stating that the vehicles were used for the assessee’s own logistics business, not for hire. The CIT(A) overturned this disallowance, citing lack of specific reasons from the AO and referencing several judicial decisions supporting higher depreciation for vehicles used on hire. The Tribunal found that the AO had indeed provided specific reasons for the disallowance, contrary to the CIT(A)'s observation. The Tribunal also noted that the judicial precedents cited by the CIT(A) were distinguishable on facts. For instance, in ABC India Limited, the business involved running vehicles solely for hire, unlike the present case where logistics solutions were provided. The Tribunal concluded that neither the AO nor the CIT(A) had thoroughly examined whether the assessee was in the business of hiring out vehicles and if any income was earned from such activities. Consequently, the Tribunal set aside the CIT(A)’s order and remanded the matter back to the AO for fresh consideration and necessary verification. 2. Higher Depreciation Claim on Motor Lorries/Trucks for A.Y. 2014-15: The issue for A.Y. 2014-15 was similar to that of A.Y. 2011-12. The Tribunal followed its reasoning and conclusion from A.Y. 2011-12 and remanded the matter back to the AO for fresh consideration and necessary verification. The appeal for A.Y. 2014-15 was thus treated as allowed for statistical purposes. 3. Disallowance under Section 14A for A.Y. 2014-15: The AO made a disallowance under section 14A amounting to ?2,21,168 by applying Rule 8D. The CIT(A) restricted this disallowance based on the Tribunal’s decision in REI Agro Limited, which held that only investments yielding exempt income during the year should be considered under Rule 8D. The Tribunal upheld the CIT(A)’s decision, noting that the REI Agro Limited decision was affirmed by the Hon’ble Calcutta High Court. Consequently, the Tribunal dismissed the Revenue’s appeal on this ground. Conclusion: - The appeal for A.Y. 2011-12 was allowed for statistical purposes, with the matter remanded back to the AO for fresh consideration. - The appeal for A.Y. 2014-15 was partly allowed for statistical purposes, with the matter of higher depreciation remanded back to the AO and the disallowance under section 14A upheld. - The Tribunal pronounced the order on July 24, 2019.
|
