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TMI Blog2018 (2) TMI 1521X X X X Extracts X X X X X X X X Extracts X X X X ..... l . CIT - DR ORDER PER Waseem Ahmed, Accountant Member :- Both appeals by the Revenue are directed against the different orders of Commissioner of Income Tax (Appeals)-XXIV, Kolkata of even date i.e. 10.05.2013. Assessments were framed by DCIT, Circle-1, Kolkata u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) vide their orders dated 15.12.2010 29.12.2011 for assessment years 2008-09 2009-10. Both appeals are heard together and are being disposed off by this consolidated order for the sake of convenience and brevity. Shri Arindam Bhattacherjee Ld. Departmental Representative appeared on behalf of Revenue and Shri Subash Agarwal, Ld. Advocate appeared on behalf of assessee. We first take up appeal of Revenue in ITA No . 2241 / Kol / 2013 relating to AY 2008 - 09 . 2. The Revenue has raised the following grounds:- 1 . That on the facts and in the circumstances of the case the Ld . CIT ( A ) has erred in deleting the disallowance on purchase of tyres for Rs . 5,91,642 /-/ and in allowing depreciation on addition to fixed assets for Rs . 13,67,889 /-. 2 . That on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e made from M/s Tyre Arcade during the year stood of ₹14,16,688/- only. Out of such purchase an amount of ₹13,67,889/- was capitalized during the year and balance of 48,789/- was debited in the profit and loss account. But AO has wrongly taken the amount of ₹19,59,531/- as total purchase from M/s Tyre Arcade. The cheque payments made to M/s Tyres Arcade were not cleared by the bank due to insufficiency of fund. Therefore the cheques were returned by Bank but the reason for dishonor of the cheque cannot be basis for making the disallowance of the expenses. In fact, the AO has not made the disallowance on the ground of non-production of evidence. As such, all the evidences were duly filed before AO. Ld. CIT(A) after considering the submission of assessee deleted the addition made by AO by observing as under:- 2 . 3 I have carefully considered the observation of the Assessing Officer in the assessment order and also the submission of thee Ld . A / R . During the course of the appellate proceedings, the Ld . A / R has explained that the appellant had purchased tyres for Rs . 14,16,688 /- from M / s Tyre Arcade during the year . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... available on record. In the instant case the disallowance was made by the AO on the ground that the cheque issued to the party was returned back on account of insufficient fund in the bank account of the assessee. The AO while making such disallowance has taken the amount of total purchase of ₹19,43,531/- whereas as per assessee correct figure is of ₹14,16,688/- only. Out of the said amount a sum of ₹48,789/- was only claimed as revenue expenses. However, AO has made the disallowance of ₹5,91,642/- On perusal of the order of the AO and ledger copy of M/s Tyre Arcade, we find that the facts of the case are in dispute as detailed under : 1. Opening credit balance as per the assessee is ₹ 16,58,705.00 whereas the AO mentions credit balance of ₹ 1,09,99,459.00. 2. Purchases during the year shown by the assessee from M/s Tyre Arcade are of ₹ 14,16,688.00 whereas the AO claims purchases from M/s Tyre Arcade by the assessee comes for ₹ 19,43,531.00 only. 3. The assessee claimed to have capitalized a sum of ₹ 13,67,889.00 out of the total purchase of ₹ 14,16,688.00 and the balance of ₹ 48,789.00 was claimed as r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the case of Gujco Carriers Vs . CIT ( supra ) , the Hon'ble High Court of Gujarat has held that the Lorry or Truck would, therefore, mean not only any motor vehicle designed to carry freight or goods but also to perform special services like fire fighting . In the case of CIT Vs . Rakesh Jain ( supra ) , the Hon'ble High Court of Punjab Haryana has upheld the order of the ITAT that the tippers would be covered by the expression commercial vehicle as tippers are registered under the Motor Vehicles Act, 1988 . In the case of Shiv Construction Co . Vs . CIT ( supra ) , the Hon'ble High Court of Gujarat has held that the dumpers are motor lorries / road transport vehicles and entitled to depreciation @ 30 % under the group D ( 9 ) of Item III of Part I of the Depreciation Schedule attached to the Incometax Rules, 1962 as applicable for AY 1974 - 75 and 1975 - 76 . In the present case, the tippers and dumpers are used for the purpose of the business of running them on hire . Respectfully following the decision of the Hon'ble High Court of Gujarat in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... na High Court . Aggrieved, revenue is now in appeal before us . We note that the issue is squarely covered in favour of the assessee by the decision of Hon'ble Karnataka High Court the case of CIT Vs . Mahaling Setty Co . ( 1992 ) 195 ITR 526 ( Kar ) , wherein the Hon'bIe High Court has held as under : INVESTMENT ALLOWANCE - ELIGIBILITY FOR ALLOWANCE - MACHINERY MUST BE OWNED AND WHOLLY USED FOR PURPOSES OF BUSINESS - PURPOSE OF BUSINESS INCLUDES EVERY ACTIVITY NECESSARY TO CARRY ON BUSINESS - BUSINESS OF CONSTRUCTION WORK - DUMPERS AND TIPPERS USED TO LIFT EARTH AND TRANSPORT SAME - RESULT IN PRODUCTION OF AN ARTICLE OR THING - ARE MACHINERY EN71TLED TO INVESTMENT ALLOWANCE - THINGS , ARTICLES , MEANING OF - INCOME - TAX ACT, 1961, SECTION 32A The word thing is shown in Earl Jowitt's Dictionary as meaning the subject of dominion or property as distinguished from persons . There are three things : things real or immovable, comprehending lands, tenements and hereditaments; thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibuses, cars, etc . , and not dumpers and tippers which are directly used in the activity of the business, et the place where the business is actually carried on . Dumpers and tippers are essentially machinery used to carry on a construction work . Therefore, the use of dumpers and tippers for the purpose of business of construction, i . e . , used to lift earth and transport the same, results in the production of an article or thing and such machinery is entitled to investment allowance under section 32A of the Act . The issue before us has been answered by the Hon'ble High Court of Karnataka ( supra ) , so we do not find any infirmity in the order of the Ld . CIT ( A ) in allowing depreciation @ 30 % on dumper and tipper . Therefore, we uphold the same . This appeal of Revenue is dismissed . Accordingly, respectfully following the consistent view of the Co-ordinate Bench of this Tribunal we decline to interfere with the order passed by the Ld. CIT(A) on this account and accordingly the ground taken by Revenue is regretted. 13. Last issue is general and does not require any separate order. 14. In the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... serving as under:- 3 . 3 I have carefully considered the observation of the o in the assessment order and also the submission of the Ld . A / R . During the course of the appellate proceedings, the Ld . A / R has explained that none of the payments exceeded the limits specified u / s . 194C for deducing TD and the appellant company was not liable to deduct any TDS from the transportation charge of Rs . 1,42,033 /- debited in P L A / c /. Considering the facts of the case, I am of the opinion that the provisions of section 40 ( a )( ia ) are not applicable in this case . Accordingly, the AO is directed to delete the addition of Rs . 1,42,033 /- u / s . 40 ( a )( ia ) for non - deduction of TDS from transportation charge . This ground of appeal is allowed . The Revenue, being aggrieved, is in appeal before us. 21. Before us both parties relied on the order of Authorities Below as favourable to them. 22. We have heard the rival contentions of both the parties and perused the material available on record. In the instant case, we find that the ledger of transportation charges is placed on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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