Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD
Before: SHRI RAJPAL YADAV, HON’BLE & SHRI WASEEM AHMED HON’BLE
आदेश/O R D E R
PER RAJPAL YADAV, JUDICIAL MEMBER
Present two appeals are filed at the instance of the assessee against orders of the ld.CIT(A)-9, Ahmedabad dated 4.12.2017 and 31.12.2018 passed for the assessment years 2014-15 and 2012-13 respectively. Since common issue is raised in both the appeals, we proceed to dispose of them by this common order.
2 2. Sole grievance in both the appeals is that the ld.CIT(A) has erred in confirming disallowance of depreciation of Rs.4,75,989/- for the Asstt.Year 2014-15 and Rs.19,03,955/- for the Asstt.Year 2012-13 under section 32 of the Income Tax Act, 1961.
As noted earlier, facts are identical in both the years except quantum. Therefore, for the sake of convenience, we take the facts from the assessment order passed in the Asstt.Year 2012-13. That the assessee has filed his return of income on 29.9.2012 declaring total income at Rs.7,67,80,210/-, which was assessed under section 143(3) of the Act. Thereafter, case of the assessee was selected for scrutiny assessment and issued notice under section 148 of the Act on 29.6.2016. During the scrutiny assessment, it was noticed by the AO that the assessee has claimed depreciation of Rs.27,19,935/- @ 50% on written down value of Rs.54,39,869/- on vehicles categorized under plant & machinery. The ld.AO noted that since vehicles were purchased in the F.Y.2009-10 and claimed deprecation at 50% in F.Y.2010-11, therefore, no further depreciation at 50% would not be allowable to the assessee in the Asstt.Year 2012-13. It was further noted by the AO that enhanced depreciation, if any would be allowable only upto the Asstt.Year 2010-11 and for subsequent period. The ld.AO accordingly show caused the assessee as to why claim of enhanced depreciation at 50% be not denied, and regular rate of depreciation at 15% be not applied. It was explained by the assessee that as per CBDT Notification NO.10 of 2009 special rate of depreciation at 50% on new commercial vehicles acquired and put to use between 1st January and 31st March, 2009, the benefit of depreciation at higher rate was available even for subsequent years also. The ld.AO, however, rejected explanation of the assessee and held that enhanced deprecation was valid for A.Y.2010-11 only and no separate block of assets for claiming enhanced depreciation was given
3 in the rule. He accordingly rejected claim of the assessee, and applied depreciation at normal rate of 15%. The excess depreciation claimed by the assessee was disallowed and added to the total income of the assessee. In the appeal before the ld.CIT(A), assessee did not any relief. While confirming the action of the AO, the ld.CIT(A) has followed order of his predecessor for the Asstt.Year 2013-14, which in turn followed order of the ld.CIT(A) in appeal order no.CIT(A)-7/296/16-17 dated 8.9.2017 in the case of the assessee for the Asstt.Year 2011-12. The assessee is now in further before the Tribunal.
Before us, the ld.counsel for the assessee reiterated submissions made before the Revenue authorities. He further submitted that similar issue arose in the A.Y.2011-12 also, and the same was travelled upto the Tribunal, and the Tribunal in allowed claim of the assessee. He placed on record copy of the order of the Tribunal dated 28.5.2019, wherein enhanced claim of the assessee was allowed. On the other hand, the ld.DR supported the orders of the Revenue authorities.
We have considered rival submissions and gone through the record carefully. Issue before us is with regard to the allowability of enhanced depreciation on new vehicles acquired by the assessee during 01.01.2009 to 01.10.2009. Now as per the amended CBDT Circular No.10 of 2009, new commercial vehicle which is acquired on or after the 1st day of January, 2009 but before the 1st day of April, 2009 and is put to use before the 1st day of April, 2009 for the purposes of business or profession, the assessee is entitled for deprecation at 50% on such vehicles. This aspect has been considered by the ITAT in the assessee’s own case in and held that 4 enhanced rate is applicable to the subsequent year also. The relevant portion of the ITAT’s order reads as under:
“8. We have carefully considered the rival submissions. The eligibility of depreciation at accelerated rate on new commercial vehicles acquired between 01.01.2009 to 01.10.2009 is in controversy. As noted extensively in earlier paras. Notification No. 10/2009 issued by the CBDT dated 19.01.2009 along with subsequent modification therein (towards period of acquisition of asset), the assessee is entitled to depreciation @ 50% on all new commercial vehicles acquired within the stipulated time frame. The Table to New Appendix-I prescribing the rates at which depreciation is admissible has also been simultaneously amended by the CBDT in excise of powers conferred to it by Sec. 295 of the Income Tax Act, 1961, Therefore, applying lower rate of depreciation in variance with the special rate of depreciation allowance do not resonate with the amended position of law. We thus, find considerable merit in the plea taken on behalf of the assessee as noted in preceding paragraph. The action of Revenue to restrict the higher depreciation to only first year where assets were acquired is devoid of sound basis and contrary to the notification. Consequently, we set aside the order of the CIT(A) and direct the AO to restore the claim of depreciation allowance on commercial vehicles at accelerated percentage.”
In view of the above decision of the Coordinate Bench of the Tribunal in assessee’s own case for A.Y.2011-12, following the same, we allow the claim of the assessee for the enhanced depreciation at the rate of 50%, and allow ground of appeal of the assessee in both the years.
In the result, both appeals of the assessee are allowed. Order pronounced in the Court on 4th December, 2019 at Ahmedabad.