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TMI Blog2017 (5) TMI 1312X X X X Extracts X X X X X X X X Extracts X X X X ..... it to the businessman and he can make another plant and machinery at the end of the old machinery life to continue his business. Therefore, Ld. CIT(A) has rightly observed that the AO should understand the basic requirement of law and discuss the matter with his supervise officers before reopening the case. Hence, the addition of depreciation disallowance was rightly deleted by the Ld. CIT(A), which does not need any interference on our part, hence, we uphold the action of the Ld. CIT(A) on the issue in dispute - Decided against revenue - I.T.A. No. 757/DEL/2014 - - - Dated:- 26-5-2017 - SHRI H.S. SIDHU, JUDICIAL MEMBER, AND SHRI O.P. KANT, ACCOUNTANT MEMBER For The Department : Sh. Umesh Chand Dubey, Sr.DR For The Assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ving tax effect of ₹ 98,67,096/-. Scrutiny of income tax assessment records revealed that the AO disallowed ₹ 1,80,27,664/- in relation to expenditure under section 14A related to exempt dividend income of ₹ 23,09,35,411/- instead of correct figure of disallowance of ₹ 3,17,48,567/-. The mistake resulted in under assessment of income of ₹ 1,37,20,903/- involving tax effect of ₹ 61,42,546/-. Hence, the AO observed that the income of ₹ 2,20,40,609/- and ₹ 1,37,20,.903/- aggregating to ₹ 3,57,61,512/- chargeable to tax has escaped assessment within the meaning of section 147/148 of the Income Tax. 2.1 In this case notice u/s. 148 of the I.T. Act, 1961 was issued to the assessee on 18.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rules, 1962 as the aircrafts were owned and used for business. The contention of the assessee was not acceptable to the AO for the reason that depreciation @40% is allowable only in case where the aircrafts is used for wholly and exclusively for commercial purpose and put on hire. In purposes on some occasions, but the business of the assessee is not giving aircrafts of hire or running the aircraft for commercial purposes. AO held that depreciation @15% was only allowable to the assessee and excess depreciation of ₹ 2,20,40,609/- was disallowed and added back to the net taxable income of the assessee vide order dated 29.11.2010 passed u/s. 147/143(3) of the I.T. Act, 1961. Aggrieved with the assessment order, assessee filed the appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have verified the I.T. Rule Book and found that Appellants claim was correct. The AO should also understand that depreciation on aircraft cannot be equated with depreciation on motor vehicle. The depreciation is given on plant and machinery depending on its life and maintenance cost involved in such machinery. The depreciation is allowed by the government to give part of the profit to the businessman and he can make another plant and machinery at the end of old machinery life to continue his business. Therefore, the AO should understand the basic requirement of law and discuss the matter with his supervise officers before reopening the case. Hence, the addition of depreciation disallowance of ₹ 2,20,40,609/- is hereby deleted. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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