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Income Tax Appellate Tribunal, AHMEDABAD “B” BENCH
Before: Shri Amarjit Singh
Revenue by: Shri Vidhyut Trivedi, Sr. D.R. Assessee by: Shri Tushar Hemani, A.R. Date of hearing : 16-03-2020 Date of pronouncement : 27-05-2020 आदेश/ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:-
This assessee’s appeal for A.Y. 2013-14, arises from order of the CIT(A)-1, Ahmedabad dated 31-10-2017, in proceedings under section 143(3) of the Income Tax Act, 1961; in short “the Act”.
The solitary ground of appeal
of the assessee is against the decision of ld. CIT(A) in confirming the action of the assessing officer on limiting Page No 2. Agrawal Roadlines Pvt. Ltd. vs. Dy. CIT depreciation on vehicles to 30% instead of 50% thereby making disallowance of Rs. 13,86,331/- u/s. 32 of the act.
3. The fact in brief is that return of income declaring income of Rs. 32,28,860/- was filed on 28th Sep, 2013. The case was subject to scrutiny and notice u/s. 143(2) of the act was issued on 4th Sep, 2014. During the course of assessment proceedings, the assessing officer noticed that assessee has claimed depreciation of Rs. 95,12,760/- @ 50% on heavy goods vehicle as against allowable depreciation @ 30%. On query, the assessee explained that claim of 50% depreciation on vehicle is pertained to trucks which were originally purchased in assessment year 2009-10 and 2010-2011. The assessee has further submitted that in order to keep vehicle purchased in proper condition it has incurred expenses for renovation of drivers cabin etc. Therefore, the said amount was capitalized and depreciation was claimed at 50% as it is in the same block of asset. The assessing officer has not agreed with the submission of the assessee and restricted the claim of depreciation @ 30% and disallowed excess claim of depreciation to the amount of Rs. 13,86,331/-.
4. Aggrieved assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee.
During the course of appellate proceedings before us, the ld. counsel has filed paper book comprising copies of document and detail of information furnished before the lower authorities. After referring the pages of paper book, the ld. counsel has contended that assessee has made Page No 3 Agrawal Roadlines Pvt. Ltd. vs. Dy. CIT depreciation correctly in respect of repair carried out on commercial vehicles purchased in financial year 2009-10 and 2010-11 on which depreciation is available @ 50%. The ld. counsel has further contended that otherwise the whole amount of expenditure should be allowed as revenue expenditure as the amount of repair is not categorized to any other block of asset. On the other hand, the ld. departmental representative has supported the order of lower authorities.
We have heard both the sides and perused the material on record. During the course of assessment, the assessee has claimed depreciation @ 50% i.e. on tankers. During the course of assessment, the assessing officer has restricted the claim of depreciation @ 30% in respect of addition made to such commercial vehicles. The commercial vehicles were purchased by the assessee during F.Y. 2008-09 and 2009-10 which were eligible to special rate of depreciation @ 50%. It is noticed that no new vehicle has been purchased by the assessee during the year under consideration. It is observed that no depreciation can be claimed for individual assets under income tax act because of concept of block of assets. Therefore, we are of the view that the depreciation in the case of the assessee is eligible as per the block of asset otherwise if such expenditure are put in the category of repair/revenue expenditure then the full claim of such expenditure are to be allowed. Since the assessing officer has treated such expenditure as capital expenditure, therefore, we consider that no new asset has been created on renovation of the commercial vehicle. Therefore, the claim of the assessee for depreciation @ 50% applicable to the particular block of assets is justified. Accordingly, we direct the assessing officer to provide the Page No 4 Agrawal Roadlines Pvt. Ltd. vs. Dy. CIT depreciation @ 50% applicable to the block of assets in the case of the assessee. Accordingly, this appeal of the assessee is allowed.
Ground No.2 is not pressed, so, the same is dismissed as not pressed. Ground No. 4 is pertaining to levy of interest u/s. 234A/B/C. This ground of appeal is dismissed as charging of interest u/s. 234A/B/C is mandatory. Ground No. 5 is against action of assessing officer in initiating penalty u/s. 271(1)(c) of the Act. The same is also dismissed as it is immature at this stage.