2023 (4) TMI 684 - AT - Income Tax

Disallowance of depreciation on vehicle - DR for the revenue submits that for claiming depreciation on asset particularly vehicle, the ownership is sine qua non. Assessee is not the owner of such vehicle - HELD THAT - CIT(A) in A.Y. 2013-14, allowed relief to the assessee without verification of fact whether similar depreciation is claimed by son of assessee or not. No finding about the prime condition about the ownership was considered and discussed, therefore, totally differ from the finding of ld. CIT(A) in A.Y. 2013-14 and concur with the finding of ld. CIT(A) for the year under consideration. The case laws relied by the ld. AR of the assessee are not at all applicable on the facts of the present case. Thus ground of appeal related to disallowance of depreciation of vehicle is dismissed. Addition on account of 5% of labour expenses - addition for want of proper evidence - HELD THAT - Once the addition was made for want of evidence, cannot be allowed without holding that there is sufficient evidence to substantiate such claim. Now adverting to the facts for the year under consideration, as noted above that the ld. CIT(A) partly concur with the findings of the AO that no supporting evidence was given. Before Tribunal, the assessee has neither given any evidence nor furnished the details of number of labourers, casual labours or their salary or attendance register to substantiate such claim. In absence of any evidence or explanation, find that the AO was quite justified in making addition/disallowance to the extent of 5% of the labour expenses. Therefore, uphold the orders of lower authorities qua this issue. In the result this ground of appeal is also dismissed.

Summary

Issues Involved:
1. Condonation of delay in filing the appeal.
2. Disallowance of depreciation on a vehicle.
3. Disallowance of 5% of labor expenses.

Summary of Judgment:

1. Condonation of Delay in Filing the Appeal:
The assessee filed the appeal with a delay of 275 days, citing reasons such as non-receipt of the order by the assessee and the impact of the Covid-19 pandemic. The Tribunal condoned the delay considering the Supreme Court's orders extending limitation periods due to the pandemic.

2. Disallowance of Depreciation on Vehicle:
The Assessing Officer disallowed the depreciation claim of Rs. 6,91,621/- on a vehicle not owned by the assessee but by his son. The CIT(A) upheld the disallowance, emphasizing that ownership is a fundamental criterion for claiming depreciation. The Tribunal agreed with the CIT(A) and distinguished the case laws cited by the assessee, noting that in those cases, the vehicles were owned by partners or directors of the entities, unlike the present case.

3. Disallowance of 5% of Labor Expenses:
The Assessing Officer disallowed 5% of labor expenses amounting to Rs. 4,66,490/- due to lack of proper vouchers and payments made in cash. The CIT(A) directed verification of the expenses and allowed disallowance to the extent of unverifiable claims. The Tribunal upheld the disallowance, noting that the assessee failed to provide sufficient evidence to substantiate the labor expenses.

Conclusion:
The Tribunal dismissed the appeal, upholding the disallowances made by the lower authorities. The order was pronounced in the open court on 22nd March 2023.