THE ACIT 4(1), INDORE vs. M/S. UMBRA MINING PVT. LTD., INDORE

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ITA 375/IND/2017Status: DisposedITAT Indore07 May 2019AY 2013-145 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) should have examined whether the assessee actually earned freight charges for transportation services. Simply transporting excavated stones to customers does not automatically imply a business of transportation or running vehicles on hire.

What were the facts?

The assessee, engaged in mining and crushing of stones, claimed 30% depreciation on dumpers used for its own business. The Assessing Officer (AO) was of the view that only 15% depreciation was allowable as the assessee was not in the business of running vehicles on hire.

What were the issues?

Whether dumpers used for the assessee's own mining business qualify for 30% depreciation as vehicles used for hire, or only 15%.

Which sections of the Income-tax Act were involved?

Section 32

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: SHRI KUL BHARAT & SHRI MANISH BORAD

For Respondent: Shri V.J. Boricha Sr. DR
Hearing: 01.05.2019Pronounced: 07.05.2019

Assessment Year: 2013-14 ACIT-4(1), M/s. Umbra Mining Pvt. Ltd. बनाम/ M-3, Sapna Chamber, Indore Vs. 12/1, South Tukoganj, Indore (Revenue) (Respondent) PAN:AABCU3251H Revenue by Shri V.J. Boricha Sr. DR Respondent by None Date of Hearing: 01.05.2019 Date of Pronouncement: 07.05.2019 आदेश / O R D E R PER MANISH BORAD, A.M: This appeal at the instance of revenue pertaining to A.Y. 2013-14 is directed against the order of Ld. Commissioner of Income Tax(Appeals)-II, Indore, (in short ‘CIT(A)’), dated 06.02.2017 which is arising out of the order u/s 143(3)of the Income Tax Act 1961(hereinafter called as Umbra Minning Pvt. Ltd. ITANo.375/Ind/2017 the ‘Act’) framed on 17.03.2016 by ACIT,4(1) Indore. The revenue has raised following grounds of appeal: “1.Whether on the facts and in circumstances of the case the ld. CIT(A) has justified in deleting the addition made on account of depreciation and in allowing the depreciation @30% on dumpers which were used for in own business by the assessee. While holding so the Ld. CIT(A) has failed to appreciate the provisions of section 32 of the IT Act where the depreciation @ 30% is allowable only on the vehicles running on hire.”

2. When the case was called non-appeared on behalf of the assessee. Case was heard with the assistance of Ld. Departmental Representative (DR) and records available.

3. Brief facts of the case as culled out from the records are that the assessee is a Private Limited Co. engaged in the business of mining and crushing of stones. E-return of income filed on 09.10.2013 declaring total income of Rs.20,50,577/-. Case was picked up for scrutiny followed by serving of notices u/s 143(2) and 142(1) of the Act. Various details were called. Reply duly submitted by the assessee. Various additions were made but as the instant appeal relates to disallowance of depreciation, fact relating thereto is that depreciation @30% claimed for vehicles running on hire but the Ld. AO was of the view that the assessee is eligible to only 15% depreciation. For this Umbra Minning Pvt. Ltd. ITANo.375/Ind/2017 reason disallowance for depreciation of Rs.73,67,771/- was made along with other additions. Income assessed at Rs. 97,91,020/-.

4. Aggrieved assessee preferred an appeal before the ld. CIT(A) and partly succeeded.

5. Now the revenue is in appeal before the Tribunal raising sole issue of deleting disallowance of depreciation by the ld. CIT(A).

6. Ld. Departmental Representative ( in short Ld.DR) vehemently argued supporting the order of the assessing officer and submitted that the assessee is not into the business of transportation and therefore, addition of depreciation claimed on vehicles for running them on hire should not be allowed.

7.

We have heard Ld. DR and perused the record placed before us. The grievance of the revenue is confined to deletion of disallowance of depreciation claimed by the assessee @ 30% on dumpers used by the assessee for its own business. We observe that the Ld. CIT(A) allowed the assessee’s claim of 30% depreciation treating the vehicles to have been used for hire and transportation by taking a view that where the goods are transported from one place to another and there may be one person who may take the 3 Umbra Minning Pvt. Ltd. ITANo.375/Ind/2017 service of one vehicle for transportation or there may be many, it does not make any difference.

8.

Under the provision of Income Tax Act depreciation @ 30% is allowed on the cost/WDV of motor buses, motor lorries and motor taxies used in a business of running them on hire.

9.

From perusal of the finding of the Ld. CIT(A) it does not transpire as to whether the assessee who is mainly into the business of quarrying, crushing and sale of stones, earned or received any amount towards freight on transportation charges for providing the services of transporting stone to site of the customers by use of its dumpers. Just because the assessee is transporting the excavated stones to the site of the customers, one cannot presume that the assessee is into business of transportation or running the dumpers on hire.

10.

In our considered view Ld. CIT(A) ought to have examined this fact by calling necessary details from the assessee including sales bills or other receipts which could prove that transportation or freight charges were charged by the assessee to its customers for sending the goods to the site of the customer which may prove that business of hiring or transportation was parallely carried by assessee. 4 Umbra Minning Pvt. Ltd. ITANo.375/Ind/2017 We therefore, set aside the issues raised in this appeal to the file of the Ld. CIT(A) for afresh adjudication in the light of our observation made herein above after providing assessee a reasonable opportunity of being heard.

11.

In the result, appeal of the Revenue is allowed for statistical purposes. Order was pronounced in the open court on 07 .05.2019.

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