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TMI Blog2020 (2) TMI 1401X X X X Extracts X X X X X X X X Extracts X X X X ..... or that the name and address of the payee is not legible. While doing so, the Ld. AO failed to consider the nature of expenses which were made in cash particularly when those vouchers are prepared by the appellant for on-site expenses for the contractual hiring of machineries for removal of excavation and removal of earth materials. Neither it has been pointed out that claim of such expenses has distorted the profit ratio of the appellant in comparison to the earlier years, which particular aspect of the matter, has been duly taken care of the Ld. CIT(A) while deleting such addition which according to us, is just and proper and without any ambiguity so as to warrant interference. Hence, the order is passed in the affirmative i.e. in favour of the assessee. - 110/Rjt/2016, 205/Rjt/2016, 237/Rjt/2016 - - - Dated:- 28-2-2020 - Shri Waseem Ahmed, Accountant Member And Ms. Madhumita Roy, Judicial Member Appellant by : Shri M. N. Maurya, CIT DR Respondent by : Shri D. M. Rindani, AR ORDER PER BENCH: These appeals filed by the Revenue are directed against the orders dated 11.01.2016, 03.03.2016 25.04.2016 passed by the Ld. CIT(A)-3, Rajkot arising out o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dumping the overburdened material at dumping site, transporting the mined material from mines to stacking place, from which it appears to the Ld. AO that more than 99.25% of receipt of the assessee is from the mining work. According to the Ld. AO the 30% rate of depreciation available to the assessee only if motor lorries are used for running there on hire, but the assessee s business is basically mining for which the assessee do use the excavators, dumpers etc. which is different from vehicle running them on hire. The assessee since received a small sum of ₹ 1.36 crores for transportation of lignite and fly ash which is less than 0.75% of the total receipt, according to the Ld. AO by no stretch of imagination the same can be said to be a business of transportation. Ultimately in the business of no receipt for hire from motor lorries and also only 0.75% receipt from so called transportation which according to the Ld. AO does not prove the assessee is in transportation business. According to the Ld. AO transportation in ancillary to mining only for which assessee is getting payment on per ton basis rather than monthly basis as a case for giving the lorries on hire. He, therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on @30% has been allowed by the Ld. CIT(A) have been upheld. The relevant portion dealing with the identical issue is reproduced herein below:- 10. We have heard both the sides and perused the material on record carefully. The assessing officer has disallowed the claim of the assesses of depreciation @ 30% and reduced the same to 15% on the reasoning that the assessee was in the business of mining and not in the business of running motor lorries on hire. We observe that the assessee firm has earned its income from following contract awarded under tender procedure during financial year under consideration:- (a) Tender Notice No. NCL/SGR/CMC/BLB/10/585 dated 27.1.2010(Excavation of OB by hiring of equipments such as excavators, tippers/dumpers, drills, dozors graders etc Loading, transportation of broken soil/rocks etc. (Awarded by Northern Coalfields Limited, Singruali (M.P) (Copy of Work order attached) (b) Tender Notice No. 284/dat d 31.7.2010 by SECL, HQ, for Hiring of HEMM for excavation of OB, loading in to tippers, transportation, unloading the excavated materials etc. (Awarded by South Eastern Coalfields Limited, Kasmundra Area, Dist. Korba (C.G.) (Copy of Work orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le on motor lorries used in the assessee's business of transportation of goods on hire. We also find that the assessee was not having any ownership of mines and materials excavated or transported. We observe that the equipment / vehicles were given on hire by the assessee during the course of the year under consideration in pursuance of tender to principal for intended use which includes transportation. Assessee-firm was required to provide stipulated equipments and vehicles for hiring work. They were not allowed to remove any equipments, vehicles provided under hiring contract without prior permission of the Principal/Principal Contractor. The business of the assessee firm itself was equipment motor vehicles owners and providing them on hire. Assessee has received income from contract which includes various operations including transportation. We observe that facts and issue in the case of Balani Ores Ltd. etc. vs. State of Orissa AIR 17, 1975 SCR (2) 138 that dumpers and rokers though registrable under the Motor Vehicle Act are not taxable under the Taxation Act of the Orissa Govt. as long as they are working solely within the premises of the respective owner are distinguis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... except for some minor variation. It was because of these findings that the dumpers were held to be road transport vehicles in said decision and development rebate was denied. The judgment of the Supreme Court in CIT v. Gupta Global Exim (P.) Ltd. [2008] 171 Taxmann 474 pertain to the correct test which the authorities below had to apply pertain to whether the appellant was in the business of transportation and whether the vehicles were used in the said business. It may please be noted that as per circular no. 652, in order to derive the benefit of higher depreciation, motor lorries must be hired out of some other person and whether the use of the same in the assessee's business of transportation of goods on hire would suffice. In this regard Board's Circular No. 609, dated 29-7-1991 [SI No. 272], it was clarified that where a tour operator or travel agent uses motor buses or motor taxis owned by him in providing transportation services to tourists, higher rate of depreciation would be allowed on such vehicles. It is further clarified that higher depreciation will also be admissible on motor lorries used in the assessee's business of transportation of goods on hire. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound that the assessee has debited various expenses under the head side expenses, mining work expenses, mess expenses, transportation expenses, staff welfare and incentive expense, repairs expenses, labour expenses which were made in cash also. Since some of the payment vouchers submitted by the assessee found defective according to the Ld. AO, those were not verifiable and, therefore, in order to put check on cash payment of expenses, lumpsum addition to the tune of ₹ 10 lakh has been made by the AO which was in turn deleted by the Ld. CIT(A) in appeal. Hence, the instant appeal before us. Heard the parties, perused the records. 8. As it appears from the records that no specific defects in those vouchers of payment have been pointed out by the AO. He has only made reference to the fact that these expenses are in cash, vouchers are not reflecting complete details or that the rate or weight or that the name and address of the payee is not legible. While doing so, the Ld. AO failed to consider the nature of expenses which were made in cash particularly when those vouchers are prepared by the appellant for on-site expenses for the contractual hiring of machineries for rem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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