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TMI Blog2025 (3) TMI 718X X X X Extracts X X X X X X X X Extracts X X X X ..... er depreciation claimed by the assessee or plant and machinery @30% instead of 15% - HELD THAT:- As in the assessee's own case in which this issue was decided in favour of the assessee wherein held orders passed by the authorities below which had not been able to be controverted by DR that the assessee engaged in the activities of excavation of over burden, mining of minerals, transportation of such excavated over burden material, excavation of minerals, transportation of minerals from mines to Pit head and transportation of minerals from Pit head to Lignite handling system/power plant, where the motor lorries used for the transportation of goods on hire. The condition under the zone of consideration for claiming higher rate of depreciation at 30% on dumpers and tippers have been fulfilled by the assessee and, therefore, having regard to the entire aspect of the matter i.e. the business activities of the assessee qua the claim of the assessee, particularly, when the fact of composite contract awarded to the assessee of mining and transportation has not been able to be controverted by the DR. We do not find any reason to interfere with the order passed by the Ld. CIT(A) in grantin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e filing fees of Rs. 6,33,133/- ignoring the facts of the case that expenses claimed by the assessee are penal in nature therefore, no allowable under section 37 of the IT Act. (2) In the facts and on the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing higher depreciation of Rs. 18,65,95,684/- claimed by the assessee on plant & machinery @30% instead of 15%. (3) In the facts and on the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing higher depreciation of Rs. 5,96,48,062/- claimed by the assessee on plant and machinery (Dumper/Tipper) @ rate of 45% instead of 15%. (4) The Revenue craves leave to add/alter/armed and/or substitute any or all of the grounds of appeal." Ground Number 1: Ld. CIT(Appeals) has erred in deleting the disallowance of interest on GST of ₹ 2,94,25,669/- and GST delayed filing fee of ₹ 6,33,133/- 3. The brief facts of the case are that the Assessing Officer made disallowance of ₹ 2,94,25,669/- on account of interest on GST and also disallowed GST late filing fee of ₹ 6,63,133/-. In appeal, Ld. CIT(Appeals) allowed the appeal of the assessee by holding that the aforesaid expend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilar view was taken by the Calcutta High Court in Balrampur Sugar Co. Ltd. v. CIT [1982] 135 ITR 227 and the Allahabad High Court in Triveni Engg. Works Ltd. v. CIT [1983] 144 ITR 732 (FB). 7. Accordingly, in light of the aforesaid decisions and discussion, we are of the considered view that Ld. CIT(Appeals) has correctly held that the above interest on GST and GST late filing fee was not towards violation of any law and hence is allowable as a deduction under section 37 of the Act. We find no infirmity in the order of Ld. CIT(Appeals) so as to call for any interference. 8. In the result, ground number 1 of the Department's appeal is dismissed. Ground Number 2: Ld. CIT(Appeals) erred in allowing higher depreciation of ₹ 18,65,95,684/- claimed by the assessee or plant and machinery @30% instead of 15% 9. The brief facts of the case are that during the course of assessment, the Assessing Officer observed that assessee claimed depreciation @30% on plant and machinery, being motor dumper, tipper etc whereas the assessee has shown income from mining contract job and not from the business of transportation on hire. The AO observed that assessee has been awarded composite work w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 015-16, 2017-18 and 2018-19. 12. It would be useful to reproduce the relevant extracts of the order passed by Ahmedabad Tribunal in ITA Nos. 484, 485 and 486/Ahd/2023 in the assessee's own case, in which this issue was decided in favour of the assessee and Department's appeal was dismissed: "7. The case of the assessee is this that the depreciation claimed @30% on the dumper & tipper is as per the provisions of law as the activities of the assessee includes excavation of over burden materials, mining of minerals, transportation of excavated over burden material, excavation of minerals, transportation of minerals from mines to pit head and transportation of minerals from Pit head to Lignite handling system/power plant. Therefore, such motor vehicles, namely, dumpers & tippers are used in transportation of over burden materials and excavated materials owned by the Principal i.e. mining owner and not by the assessee. This particular vehicles are only used for transport beyond the shifting of materials from one place to another Mines, on which, excavation, transportation and other activities are carried out does not belong to the assessee and thus excavated earth and minerals transp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r depreciation at higher rate. Addition thereon to the tune of Rs. 8,71,10,768/- was made by the Ld. AO in the hands of the assessee. 8. In appeal, apart from all this explanation, the assessee further relied upon the Circular being No. 652 dated 14.06.1993 issued by the CBDT, wherein it has been categorically fixed that higher rate of depreciation was admissible on motor vehicle in the assessee's business of transportation of goods on hire and that higher rate will not apply if the motor lorries etc. are used in the non-hiring business of the assessee. Further Circular No. 609 dated 29th July, 1991, wherein the Board has clarified that the higher rate of depreciation is also admissible when the assessee is using motor lorry in his own business of transportation of goods on hire. The following facts and figures were also placed before the First Appellate Authority: ... 10. Further that, it was also placed on record that the judgment passed by the ITAT, Rajkot was challenged before the Hon'ble High Court in the case of PCIT, Rajkot-I vs. Durga Construction Co., reported in [2018] 93 taxmann.com 436, wherein the High Court came to the conclusion that the assessee therein was en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 7,15,01,403/- on specific class of assets @45% based on the CBDT's NOTIFICATION NO. GSR 679 (E) [NO. 69/2019 (F.NO. 370142/17/2019-TPL)], which was effective from 23-08-2019, wherein it was mentioned that motor buses, motor lorries and motor taxis used in a business of running them on hire, acquired on or after the 23rd day of August, 2019 but before the 1st day of April, 2020 and put to use before the 1st day of April, 2020 are eligible for depreciation @45%. However, since the assessee had opted for being taxed under section 115BAA of the Act, wherein the highest rate of deprecation that can be claimed by the assessee was 40% only, the CIT(A) in his appellate order restricted the depreciation claim to 40% and disallowed depreciation of Rs. 1,18,53,341/- while deleting the remaining addition of Rs. 5,96,48,062/-. The learned CIT(A) deleted such addition based on the facts mentioned in Ground Number 2 above and the issue is similar to the issue as mentioned in the Ground Number 2 above and accordingly the assessee placed reliance on observations made in the decision of the learned CIT(A) for allowing depreciation of Rs. 5,96,48,062/- @40% as against 15% decided by the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egation of cash receipt of loan and cash payment of interest only on the basis of illusionary and imaginary working made in the excel sheets which was recovered from email of the accountant of Mr. Girish N Patel without any confirmation or acceptance of the appellant. Therefore, it is prayed to your honour that such order needs to be quashed and additions need to be deleted by passing appropriate order. Further, the appellant craves leave to add, amend, alter or delete all or any of the grounds of appeal at the time of hearing of the appeal." 21. The assessee has also raised the following additional grounds of appeal: "Ground No. 1.1 On the facts and in the circumstances of the case and in law, the learned Assessing Officer ('learned AO') has erred in initiating the assessment proceedings under section 147 of the Act without appreciating the fact that notice should have been issued under section 153C of the Act in the present case." 22. We shall first look into the merits of the instant additions. The brief facts of the case are that during the course of search proceedings on the Sadbhav group, various incriminating documents were found and seized. While examining the sei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceived by the assessee from Shri Girish N. Patel, during the impugned year under consideration. Further, the Assessing Officer also made addition of ₹ 50,24, 589/- towards cash payment of interest as unexplained expenditure under section 69C of the Act. However, Ld. CIT(Appeals) deleted the addition of ₹ 10.54 crores towards cash loan by holding that since the assessing officer itself was of the view that this was a "loan" taken by the assessee, albeit in cash, the same cannot constitute as unexplained "income" of the assessee under section 69A of the Act. However, the position of the assessee is that the assessee has neither taken any cash loan and nor paid any interest in cash to any party during the impugned year under consideration. The only basis for making addition is an unsigned Excel sheet recovered from the premises of a third party, which cannot be the basis for making additions in the hands of the assessee. In our considered view, it is a well-settled principle that any addition cannot alone be made on the basis of unsigned Excel sheets, without any further corroborative evidence to substantiate that the assessee had paid interest in cash to a third-party. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocument evidencing the fact that assessee had paid any cash as on-money to said party for purchase of property. In the case of Vinit Ranawat 88 taxmann.com 428, the ITAT held that no addition can be made in the hands of the assessee on the basis of papers found with the third party when there was no business connection between the assessee and that third party. Fourthly, it is a settled principle of law that no addition can be made on the basis of statement of a third party, without allowing the assessee an opportunity of cross-examining the person on the basis of whose statement the addition has been made. The Hon'ble Supreme Court in the case of Andaman Timber Industries 62 taxmann.com 3 (SC), held that when statements of witnesses are made the basis of demand, not allowing the assessee to cross-examine the witness is a serious flaw which makes order a nullity, as it amounts to violation of principles of natural justice. In the case of CITvs. Sunita Dhadda 100 taxmann.com 526, the Hon'ble Supreme Court dismissed the Department's SLP against order of High Court holding that where Assessing Officer while making addition on account of on-money received by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne Shri Girish N Patel. The appellant had not been provided the copy of the statement given by Shri Girish N Patel. * No any corroborative evidence in support of the information received from the Investigating Wing was brought on record by the learned AO. The learned AO just copied the alleged loan amount and alleged interest payment amount for making the addition in the case of the appellant. * Thus, the addition made by the learned AO u/s 69C which was subsequently upheld by the learned CIT(A) is not sustainable in the eyes of the law. 2. Kashish Gaurav Chandani Vs. The ITO Ward - 3 (3)(2), Ahmedabad in the ITAT "B" Bench, Ahmedabad in IT(SS)A No.147/Ahd/2023, dated 10-06-2024 Wherein it was held as under; "6.7. As regards the cash component of Rs. 7,86,450/-, the assessee has consistently denied making such payment and there is no corroborative evidence brought on record by the AO to substantiate this addition. Therefore, in the absence of any conclusive evidence, the addition of Rs. 7,86,450/- is not sustainable." 2.7 Therefore, the learned CIT[A] ought to have appreciated that the impugned addition made was purely on suspicion and surmise, assumptions and presumption ..... X X X X Extracts X X X X X X X X Extracts X X X X
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