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TMI Blog2023 (1) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... delay is covered within the period specified in the order of the Apex Court, then same needs to be condoned in view of specific problem faced by the public on account of Covid-19 pandemic. 2.1 The learned DR, on the other hand, fairly agreed that delay may be condoned in the interest of justice. 2.3 Having heard both sides and considered reasons given by the learned AR, we find that the Hon'ble Supreme Court in Miscellaneous Petition No.21 of 2022 in Suo Motu Writ Petition (C) No.3 of 2020, has extended limitation applicable to all proceedings in respect of Courts and Tribunals across the country on account of spread of Covid-19 infections w.e.f. 15.03.2020, till further orders and said general exemption has been extended from time to time. We further noted that delay noticed by the Registry pertains to the period of general exemption provided by the Hon'ble Supreme Court extending limitation period applicable for all proceedings before Courts and Tribunals and thus, considering facts and circumstances of the case and also in the interest of natural justice, we condone delay in filing appeal filed by the assessee. 3. The assessee has raised the following grounds of appeal: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the disallowances of expenses as stated above may be deleted. Overall Tax Effect:- 46,42,169/- 4. The brief facts of the case are that the assessee is a Private Limited Company, engaged in the business of letting out warehouse on rent or lease and also in the business of passenger transport business. The assessee has filed its return of income for the AY 2015-16 on 01.10.2015 admitting 'nil' total income and current year loss of Rs.1,51,79,867/-. The assessment has been completed u/s.143(3) of the Act, on 30.11.2017 and determined total income of Rs.'NIL' after making various additions including additions towards disallowance of excess depreciation on motor buses, disallowance of interest on borrowed capital u/s.36(1)(iii) of the Act, disallowance u/s.14A of the Act r.w.r.8D of Income Tax Rules, 1962, disallowance of Pondicherry Permit Expense, and disallowance of expenditure of panel in nature u/s.37(1) of the Act. The assessee carried the matter in appeal before the First Appellate Authority and the Ld.CIT(A) for the reasons stated in their appellate order dated 01.09.2020 partly allowed the appeal filed by the assessee, where he has sustained the additions made towards disallow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se '2' buses were ready to use, but only registration has been taken in the month of October, 2014. Therefore, he argued that as per Motor Vehicles Rules, the assessee needs to submit all documents for registration and the authority will have 30 days' time for issuing registration. Therefore, if you consider said 30 days, the buses were ready for use for more than 182 days. Therefore, the assessee is entitled for full depreciation on motor buses, but the AO has restricted the depreciation to 50% of actual depreciation. 5.2 The Ld.DR, on the other hand, referring to Remand Report of the AO submitted that the AO not only considered payment for diesel bills but also bills for body works, as per which, the assessee has put up body to buses in the month of October, 2014. Further, the assessee claims that he has started receiving Revenue from August, 2014, but facts remain that the assessee is a contract carrier and question of booking tickets does not arise. The AO after considering relevant facts has rightly restricted depreciation to 50% for using the asset for less than 182 days and their order should be upheld. 5.3 We have heard both the parties, perused the materials available on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se in the business in the month of October, 2014, which is less than 182 days. Therefore, the assessee is entitled for 50% of actual depreciation on remaining '2' buses. Therefore, we do not find any errors in the reasons given by the AO to allow 50% depreciation on remaining '2' buses and thus, we reject the arguments of the assessee. To sum up, the assessee is entitled for 100% depreciation on '8' buses and thus, we direct the AO to consider the claim of the assessee and for remaining '2' buses, disallowance of excess depreciation is upheld. 6. The next issue that came up for our consideration from Ground Nos.3.1 to 3.2 of the assessee's appeal is disallowance of interest on borrowed capital u/s.36(1)(iii) of the Act. This issue is consequential to disallowance of depreciation. The AO has disallowed interest on borrowed capital up to the date of capitalization of asset on the ground that the assessee had only put to use the buses from the month of October, 2014 onwards. Since, we already held that the assessee has acquired and put to use the buses from the month of August, 2014 itself, in so far as interest paid on borrowed capital for '8' buses are concerned, the AO is directed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te the additions made towards disallowance of property tax paid to Pondicherry Panchayat amounting to Rs.1,66,793/-. 8. The next issue that came up for our consideration from Ground No.5.1 of the assessee's appeal is 'Pondicherry Permit Expense' amounting to Rs.13,20,600/-. The assessee is engaged in the business of plying motor buses has taken transport permission for a particular state and as and when the vehicles entered into different state which has to pay road taxes for other state. The assessee claimed to have paid road taxes for Pondicherry state permit amounting to Rs.13,20,600/-. The AO disallowed said expenditure on the ground that it is capital in nature. 8.1 We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. The road taxes paid to state government for permitting vehicles to run in different states is recurring expenditures which needs to be incurred by a transporter for plying buses. In this case, the assessee being in the business of plying motor buses has paid Pondicherry permit charges to Government of Pondicherry to operate buses in the state of jurisdiction of Pondicherry and same would be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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