9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (5) TMI 208 - AT - Income TaxDepreciation on rigs on hire - @60% OR @15% - assessee is not a mineral oil concern‟ as it is supplying equipment on hire to all other mineral oil concern and is giving it on hire and not using for its business purpose - HELD THAT - Respectfully following the decision of the coordinate bench 2019 (4) TMI 765 - ITAT DELHI as well as 2018 (12) TMI 1634 - ITAT DELHI in assessee/s own case, we direct the ld AO to grant depreciation on this asset @60%. Accordingly, ground No. 1 of the appeal of the ld AO is dismissed. Disallowance u/s 14A read with Rule 8D - HELD THAT - CIT (A) is correct that the ld AO has failed to record satisfaction about the correctness of the claim of the assessee that it has not incurred any expenditure to earn the exempt income. It is also true that the assessee has not received any exempt income during the year. Thus in absence of exempt income, relying on the decision in case of Cheminvest Ltd Vs. CIT 2015 (9) TMI 238 - DELHI HIGH COURT wherein, it has been held that there should be actual receipt of exempt income and section 14A will not apply if no exempt income is received during the relevant previous year. In view of this, we confirm the order of the ld CIT (A) and direct the ld AO to delete the disallowance u/s 14A of the Act. Ground No. 2 of the appeal is dismissed. Addition on account of balances lying in sundry creditors account - HELD THAT - As submitted that with respect to the most of the creditors the confirmation has been received and submitted before the ld CIT (A). In case of all other creditors the specific bank account of the assessee was also produced this shows that the payments are made through account payee cheques. With respect to the one party wherein, it has been shown that certain amounts with respect to the above parties have also written back which have been offered for taxation. For all other creditors the assessee has submitted the PAN as well as ledger accounts from the books of assessee for the subsequent years. In view of the above overwhelming evidence produced by the assessee which could not be controverted by the ld DR we find no infirmity in the order of the ld CIT(A) in deleting the addition as there is neither cessation of the liability nor the creditors are found to be non existing. In the result ground No. 3 of the appeal is dismissed. Disallowance u/s 43B - HELD THAT - Assessee has made a provision of leave encashment and the same does not fall u/s 43B (f) relying on the decision of Exide industries Vs. Union of India 2007 (6) TMI 175 - CALCUTTA HIGH COURT - As carefully considered rival contentions and find that in case of CIT Vs. Exide Industries Ltd 2009 (5) TMI 894 - SC ORDER has held that the assessee shall pay the tax as if section 43B(f) is on the statue and would be entitled to make a claim in its return of income. Therefore, it is apparent that the Hon'ble Supreme Court has merely directed the assessee for payment of tax. However, the binding force of the decision of the Kolkata High Court still stands and therefore, respectfully following the same, we direct the AO to delete the above disallowance. Accordingly, cross objections filed by the assessee is allowed. In the result, cross objection of the assessee is allowed.
Issues:
1. Disallowance of depreciation claimed at a higher rate. 2. Disallowance under section 14A read with Rule 8D. 3. Addition on account of balances in sundry creditors account. 4. Confirmation of disallowance of leave encashment provision. Issue 1: Disallowance of Depreciation Claimed at a Higher Rate - The AO disallowed depreciation claimed at a higher rate of ?194,481,158. - Assessee claimed depreciation @60% on equipment, but AO allowed it @15%. - CIT (A) held in favor of the assessee based on ownership and usage of oil rigs. - Decision relied on the case of CIT Vs. HLS India Ltd. - Tribunal dismissed AO's appeal, citing previous rulings in favor of the assessee. Issue 2: Disallowance under Section 14A read with Rule 8D - AO disallowed ?16,146,530 under section 14A using Rule 8D. - Assessee had made investments without earning any exempt income. - CIT (A) deleted the disallowance due to lack of satisfaction by the AO. - Tribunal upheld CIT (A)'s decision based on absence of exempt income. Issue 3: Addition on Account of Balances in Sundry Creditors Account - AO added ?1,108,226 due to incomplete details of sundry creditors. - CIT (A) deleted the addition after complete information was provided. - Assessee demonstrated existence of creditors and confirmed accounts. - Tribunal upheld CIT (A)'s decision based on detailed explanations and evidence. Issue 4: Confirmation of Disallowance of Leave Encashment Provision - AO disallowed ?73,252 under section 43B (f) for unpaid leave encashment. - CIT (A) confirmed the disallowance, leading to a cross objection by the assessee. - Tribunal noted a stay on the decision of the Hon'ble Kolkata High Court. - Ruling followed the decision in CIT Vs. Exide Industries Ltd, allowing the assessee's claim. In conclusion, the Tribunal dismissed the AO's appeal and allowed the assessee's cross objection, providing detailed analysis and legal reasoning for each issue addressed in the judgment.
|
