1999 (2) TMI 93 - AT - Income Tax

Summary

Issues:
1. Disallowance of depreciation amounting to Rs. 40,000 by CIT(A) relying on Indian Oil Corporation vouchers.
2. Admission of fresh evidence in the form of vouchers by CIT(A) in violation of IT Rules.
3. Disallowance of claim of depreciation on car to the extent of 5/6th of depreciation admissible.
4. Lack of evidence provided by the assessee regarding the use of car for business purposes.

Analysis:
1. The Revenue appealed against the CIT(A)'s order allowing depreciation of Rs. 40,000 based on Indian Oil Corporation vouchers. The AO had rejected the claim due to lack of evidence on tanker use. The CIT(A) allowed the claim, citing the vouchers as evidence of tanker use, directing the AO to amend the assessment order. The ITAT upheld the CIT(A)'s decision, noting the genuineness of the vouchers and lack of evidence from the Revenue to challenge them.

2. The Revenue contested the admission of fresh evidence (IOC vouchers) by the CIT(A) without giving the AO an opportunity, violating IT Rules. ITAT found that even if the admission was incorrect, providing a fresh opportunity to the AO would not benefit the Revenue. The vouchers' authenticity, being from a Government undertaking, was unquestionable. The Revenue failed to cast doubt on the vouchers' credibility, leading ITAT to reject this ground of appeal.

3. The appeal also addressed the disallowance of depreciation on the car by 5/6th of the claimed amount. CIT(A) justified the decision based on past allowances and the current claim details. ITAT agreed with CIT(A), finding no justification for rejecting the claim when previously allowed. The grounds related to this issue were rejected for lack of merit.

4. Lastly, the lack of evidence regarding the car's business use was raised. The AO had rejected the depreciation claim due to insufficient proof. However, the CIT(A) allowed the claim based on past practices and claim details. ITAT upheld CIT(A)'s decision, noting the absence of contradictory evidence from the Revenue. Consequently, the appeal was dismissed, and CIT(A)'s order was upheld in its entirety.