2014 (2) TMI 222 - AT - Income Tax

Deletion made u/s 40(a)(ia) of the Act Held that - The Provisions of s. 40(a)(ia) are applicable only to the amount of expenditure which is payable as on 31st March of every year and it cannot be invoked to disallow the expenditure which had been actually paid during the previous year without deduction of TDS - There was no contract between the assessee and M/s Keshriyaji Marble & Granites Pvt. Ltd. -The assessee was purchasing the marble blocks from the market - nothing was payable as on 31/03/2007 on account of job charges Following the Decision of Merilyn Shipping & Transports Vs. Addl. CIT Range-1, Viskhapatanam 2012 (4) TMI 290 - ITAT VISAKHAPATNAM the addition made by the Assessing Officer deleted - No contrary decision was brought on record There was no infirmity in the order of the learned CIT(A) who has deleted the addition Decided against Revenue. Deletion on account of excess deprecation on dumpers Held that - The decision in Asstt. CIT Versus M/s Sayeed Iqbal 2014 (1) TMI 744 - ITAT JODHPUR followed - the assessee was eligible for claiming depreciation at the same rate at which depreciation was allowable on motor lorries - The CIT(A) has allowed the claim of the assessee by following the decision of the jurisdictional Tribunal and nothing is brought on record that the decision of the ITAT Jodhpur Bench relied by the learned CIT(A) had been reversed by the higher forum Decided against Revenue.

Summary

Issues:
1. Deletion of addition under section 40(a)(ia) of the Income Tax Act, 1961.
2. Deletion of disallowance of excess depreciation on dumpers.

Deletion of Addition under Section 40(a)(ia) of the Income Tax Act, 1961:
The first issue in this appeal pertains to the deletion of an addition made by the Assessing Officer under section 40(a)(ia) of the Income Tax Act, 1961. The Assessing Officer disallowed an amount paid to a party for job work charges, citing non-deduction of TDS. The assessee contended that TDS was not required as there was no regular contract and the payment was for business transactions, not covered under the definition of a work contract. The CIT(A) deleted the addition, noting that all job charges were paid with nothing remaining payable by the year-end. The CIT(A) relied on judicial decisions stating that TDS provisions are not applicable to amounts already paid during the previous year without TDS deduction. The Tribunal upheld the CIT(A)'s decision, emphasizing the absence of any contract and no outstanding payments, in line with previous judicial rulings.

Deletion of Disallowance of Excess Depreciation on Dumpers:
The second issue concerns the disallowance of excess depreciation claimed on dumpers by the Assessing Officer. The assessee claimed depreciation at 30%, while the allowable rate was 15%. The Assessing Officer contended that the assessee was entitled to depreciation at 15% only, citing that dumpers were not in the nature of lorries but earth-moving machinery. The CIT(A) allowed the depreciation claim at 30%, following a jurisdictional Tribunal decision. The Tribunal upheld the CIT(A)'s decision, stating that there was no evidence to suggest a reversal of the Tribunal's previous ruling. The Tribunal found no merit in the Department's appeal regarding the depreciation disallowance on dumpers.

In conclusion, the Tribunal dismissed the Department's appeal, upholding the decisions of the CIT(A) regarding both the deletion of the addition under section 40(a)(ia) and the disallowance of excess depreciation on dumpers. The Tribunal's decision was based on the absence of contracts, no outstanding payments, and adherence to previous judicial rulings and Tribunal decisions.