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TMI Blog2018 (11) TMI 993X X X X Extracts X X X X X X X X Extracts X X X X ..... appreciate actual circumstances of the dispute. Considering the above details, we allow this ground of appeal and delete the impugned disallowance. - Decided in favour of assessee. Disallowance of depreciation - whether depreciation is to be granted at the rate of 15% or 40%? - Revenue authorities have disallowed the claim by holding that the assessee has been claiming additional depreciation which is available to an assessee engaged in the manufacturing activity - Held that:- Case of the assessee is, whether depreciation on the vehicles and instruments used for construction business will be allowed at 40% or 15%, whereas the Revenue authorities have considered this issue, whether the assessee is entitled for additional depreciation or not. Considering the above facts, we deem it appropriate to set aside this issue to the file of the AO for examination. AO shall consider the claim of the assessee, whether it is entitled for higher rate of deprecation or not. AO shall look into the order of the ITAT in the case of Rakesh Jain (supra) . This ground of appeal is allowed for statistical purpose. - ITA No.2813/Ahd/2016 - - - Dated:- 23-10-2018 - Shri Rajpal Yadav, Judicial Member ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not explain the nature of work done by them or any outstanding amounts, if any towards the assessee. The AO took these circumstances as if the assessee has created demi -contractors and inflated the expenditure. He disallowed labour expenditure of ₹ 26,57,765/- and ₹ 70,90,815/- payable to B.A.Pavagadh and M.H. Shah labour contractors respectively. Appeal to the ld.CIT(A) did not bring any relief to the assessee. 4. The ld.counsel for the assessee while impugning orders of the ld.Revenue authorities contended that the assessee has established direct link between the work obtained from government instrumentalities i.e. AUDA and AMC, and how these works have been got performed by it with the help of labour contractors. Complete ledger details exhibiting the nature of contract obtained from these agencies, and assignment to the labour contractor has been filed. The ld.counsel for the assessee took us through page nos.42 to 47 of the paper book, where the details of bills, nature of work, rates and how these works have been carried out are being placed on record. He thereafter made reference to the bank statement vide which the payments have been made. He pointed out th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details from AUDA or AMC how these contracts completed by it with help of labour contractor. It has submitted that labour bills and contract indicating the working assigned by it to different labour contractors. It has submitted bank statement showing payment through banking channel to labour contractors. It has produced income tax return of the contractor showing income of these receipts received from the assessee. It has produced TDS details. It has produced comparative analysis of the GP as well as NP of earlier years vis- -vis this year. It has also demonstrated how profit will abnormally rise if these disallowances are being included in the income of the assessee. Thus, complete circumstantial evidence produced by the assessee would indicate that it has incurred these expenditure for completing the work. The only circumstances with the AO is that proprietorship concern of the labour contractors were in the names of ladies and actual work were being looked after by their husbands, hence, they are not having knowledge of their business. To our mind these circumstances, ought not to be looked into in isolation for disbelieving the claim of the assessee. Receipts have already suf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s observed that provisions of section 32(1)(iia) granting additional depreciation reads as under: 32(1)(iia)..... in the case of any new machinery or plant (other than ships and aircraft), which has been acquired and installed after the 31st day of March, 2005, by an Assessee engaged in the business of manufacture or production of any article or thing or in the business of generation or generation and distribution of power], a further sum equal to twenty per cent of the actual cost of such machinery or plant shall be allowed as deduction under clause (ii): Provided that no deduction shall be allowed in respect of- (A) any machinery or plant which, before its installation by the Assessee, was used either within or outside India by any other person; or (B) any machinery or plant installed in any office premises or any residential accommodation, including accommodation in the nature of a guest-house; or (C) any office appliances or road transport vehicles; or (D) any machinery or plant, the whole of the actual cost of which is allowed as a deduction (whether by way of depreciation or otherwise) in computing the income chargeable under the head Profits a ..... 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