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TMI Blog2015 (6) TMI 208X X X X Extracts X X X X X X X X Extracts X X X X ..... on vehicle - CIT(A) deleted the addition - Held that:- The assessee is required to demonstrate that assessee-company has purchased vehicles during the year under consideration, the delivery of such vehicles has also been taken and such vehicles were put to use for business purposes. It would not be sufficient that the assessee obtained the registration certificate from the state transport authority to prove that the vehicles have been put to use for business purposes. For claiming depreciation, onus is on the assessee that the vehicles so purchased have been put to business as in the case in hand delivery of vehicles to the assessee is not proved, however registration of vehicles is proved. In our considered view, the assessee should have furnished other evidences for proving that in fact vehicles were put to use. Therefore, the order of the ld.CIT(A) is hereby set aside. The issue of allowability of depreciation is restored to the file of AO for decision afresh. - Decided in favour of revenue for statistical purposes. - I.T.A.No.1667/Ahd/2011, I.T.A.No.1932/Ahd/2011 - - - Dated:- 13-5-2015 - Shri N. S. Saini And Shri Kul Bharat,JJ. For the Petitioner : Shri M.J. Shah, AR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ategorically submitted that the assessee has incurred the expenses of ₹ 88,56,044/-. It was pointed out that the total interest expenses incurred was of ₹ 88,56,044/- and the break-up of the expenses are shown such as, (i) interest on cash credit of ₹ 20,39,607/-, (ii) interest on packing credit limit of ₹ 24,87,210/-, (iii) interest to other of ₹ 1,66,241/-, (iv) interest on unsecured loan of ₹ 10,54,049/-, (v) interest on tem loan of ₹ 25,74,770/- and (vi) interest on vehicle loan of ₹ 5,34,167/-. The ld.counsel for the assessee submitted that the AO made disallowance of ₹ 23,87,072/- in respect of interest expenses u/s.14A of the Act under the assumption that the entire interest expenses appearing under the profit and loss account is related to investment and, accordingly, wrongly applying Rule 8D and made the disallowance. He submitted that the AO ought to have excluded the interest paid for the purpose of working capital facility while calculating the disallowance u/s.14A of the Act. The assessee has availed the term loan for exhibition. The interest of ₹ 25,74,770/- is paid for such term loan availed for exhibition p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s from which the assessee has earned tax-free income. We find that the ld.CIT(A) has decided this issue in paras-6.5 to 6.7 of his order by observing as under:- 6.5. The submission of the Ld.A.R has considerable substance. The argument of the Ld.A.R regarding excluding the investment in foreign shares because those does not generate exempt income is correct and therefore it is accepted without any further deliberation. This fact has been accepted by the A.O also, but there is some mismatch in the figures of calculation of investment in shares of foreign companies in assessment order. Regarding the interest on exhibition loan and packing credit, etc. the Ld.A.R could not demonstrate with cogent evidence whether those loans are exclusively used for those specific purposes and there is no intermixing of funds which were used for acquisition of tax free securities and therefore this argument of Ld.A.R is not accepted. 6.6. In view of these facts the disallowance u/s.14A is recalculated as under:- 1. Interest : 88,56,044 x 3,82,57,000 = 15,23,330 22,24,11,253 2. Adm. Expenses 0.5% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s appeal in ITA No.1667/Ahd/2011(supra) back to the file of AO for decision afresh, this issue, raised in the Revenue s appeal, is also restored back to the file of AO for decision afresh with the same direction. Accordingly, this ground of Revenue s appeal is allowed for statistical purposes. 7. Second ground of Revenue s appeal is against the deletion of addition of ₹ 3,28,175/- made on account of excess depreciation on vehicle. The ld.Sr.DR submitted that the ld.CIT(A) was not justified in deleting the addition. He submitted that the first requirement for allowing the claim of depreciation, the assessee is required to demonstrate that the asset has been used for business purposes. He submitted that the assessee has not furnished any evidence in support of its contention that the vehicles were put to use for business purposes. He submitted that merely that the assessee has purchased vehicle on 29/03/2008 and 31/03/2008 does not serve the purpose for proving that the delivery of such vehicles were taken on the aforesaid dates and on the same dates the vehicles were put to use for business purposes. 7.1. On the contrary, the ld.counsel for the assessee supported the or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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