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TMI Blog2015 (9) TMI 1491X X X X Extracts X X X X X X X X Extracts X X X X ..... nd loss account and therefore we hold that the assessee is using these vehicles for transportation of goods of other persons. It is pertinent to note that CBDT Circular No. 652 dated 14.6.1993 on this subject states that assessee is entitled to higher rate of depreciation when the vehicles are used by the assessee in his own business of transportation of goods on hire.- Decided in favour of assessee Addition in respect of trade creditor - Held that:- We find that the Learned DR did not refute the findings given by the Learned CITA with regard to the fact that the assessee had fully discharged its onus by giving the name and address of the Sundry Trade Creditor M/s Bijay Hardware Stores before the Learned AO. We find that the provisions of section 68 of the Act could not be invoked for the trade creditoRs.We hold that the assessee had duly discharged its onus by placing all the details of the sundry creditor before the Learned AO and just because no reply has been furnished by the said creditor to the Learned AO u/s 133(6) of the Act, that cannot automatically lead to a situation that the said creditor is not having any creditworthiness. We also find that the Learned AO had not d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication of the facts whether the payee had shown the said payment as his income in its return of income and paid taxes thereon. In support of his contentions, he placed reliance on the latest decision of the Hon ble Delhi High Court in the case of CIT vs Ansal Land Mark Township P Ltd in ITA No. 160 / 2015 161 / 2015 dated 26.8.2015. In response to this, the Learned DR fairly conceded to the decision quoted by the Learned AR and agreed for set aside to Learned AO. 3.2. We have heard the rival submissions and we find that the Hon ble Delhi High Court in the case of CIT vs Ansal Land Mark Township P Ltd had held that the second proviso to section 40(a)(ia) of the Act has to be construed retrospective in operation. The relevant operative portion of the said judgment is reproduced here in below:- 4.22. Without prejudice to the main Ground No. 2.1 and alternative Ground No. 2.2, the Learned AR argued that the second proviso to section 40(a)(ia) inserted with effect from 1.4.2013 should be construed as curative in nature and hence has to be given retrospective effect. This issue has been recently decided by the Hon ble Delhi High Court in the case of CIT vs Ansal Land Mark Town ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to provide necessary evidences and documents to prove that the payee had duly disclosed the subject mentioned receipt of machinery hire charges in its return and paid the due taxes thereon. If the same is proved, the assessee should be given relief. Hence the cross objection raised by the assessee is allowed for statistical purposes. Revenue Appeal in ITA No. 1591/Kol/2011 4. The first issue to be decided in this appeal is allowability of higher rate of depreciation amounting to ₹ 47,07,779 claimed on Dumper and Payloader. 4.1 The Brief facts of this issue is that the Learned AO allowed only 15% depreciation on Dumper and PayLoader as against the higher rate of depreciation claimed @ 30% by the assessee on the ground that the assessee is not giving its dumpers on hire to another operator and rather it is used in its own business of loading / unloading and transporting for various organizations. On first appeal, the Learned CITA held that the assessee is disclosing income from transportation by dumpers and pay loaders from M/s Panem Coal Mines Ltd and showing it as income from loading and transportation. He further held that it is therefore clear that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g hire charges. By considering the totality of the facts and circumstances, we do not find any infirmity in the order of Ld.CIT(Appeals) on this count. Resultantly, Ground No. 1 of Revenue s appeal is dismissed. In view of the aforesaid facts and circumstances and respectfully following the coordinate bench decision in the case of Avinash Transport as cited supra, we hold that the assessee is entitled for depreciation on dumpers and pay loaders at the higher rate and accordingly we are not inclined to interfere with the order of the Learned CITA on this issue. The Ground No.1 raised by the revenue is dismissed. 5. The next issue to be decided in this appeal is as to whether the Learned CITA is justified in deleting the addition of ₹ 7,96,400/- in respect of trade creditor M/s Bijay Hardware Stores. 5.1. The brief facts of this issue is that the assessee purchased some goods from M/s Bijay Hardware Stores and the balance outstanding to the account of the said creditor as on 31.3.2008 was ₹ 7,96,400/-. The assessee provided the complete details of the said creditor together with the bills in support of the purchases made by it. The Learned AO sought to seek in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing ground:- 2. That on the facts and in the circumstances of the case, the Learned CIT(Appeal), erred in deleting the addition of ₹ 7,96,400/- as a result of disallowances made on account of Closing credit balance in respect of Bijay Hardware Stores. 5.2. The Learned DR vehemently supported the order of the Learned AO. In response to this, the Learned AR stated that the Learned CITA s order requires no interference as the assessee had only purchased certain goods from Bijay Hardware Stores and trade creditors could not be taxed u/s 68 of the Act. 5.3. We have heard the rival submissions and perused the materials available on record. We find that the Learned DR did not refute the findings given by the Learned CITA with regard to the fact that the assessee had fully discharged its onus by giving the name and address of the Sundry Trade Creditor M/s Bijay Hardware Stores before the Learned AO. We find that the provisions of section 68 of the Act could not be invoked for the trade creditoRs.We hold that the assessee had duly discharged its onus by placing all the details of the sundry creditor before the Learned AO and just because no reply has been furnished b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... % and dumper payloader hire charges had increased by 702%. The Learned AO also found that during the assessment year under appeal, a sum of ₹ 1.12 crores was paid to Mr. Arbind Singh who is a related party in terms of section 40A(2)(b) of the Act which admittedly constitutes 11.89% of total payment of dumper and payloader hire charges. Accordingly, he proceeded to disallow a sum of ₹ 13,37,234/- (computed at 11.89% of ₹ 1,12,45,998) and a sum of ₹ 1,00,000/- on an adhoc basis to take care of the unjustified increase in other expenditure during the assessment year under appeal u/s 40A(2)(b) of the Act. On first appeal, the Learned CITA deleted the additions in the sum of ₹ 14,37,234/- on the ground that the provisions of section 40A(2)(b) of the Act could be made applicable only when the Learned AO forms an opinion that the expenditure is excessive or unreasonable having regard to the fair market value of the goods. The Learned CITA held that admittedly, no comparison of fair market value of payment of hire charges was brought on record by the Learned AO and deleted the entire addition as the same was only made on an estimated basis. Aggrieved, the reve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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