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Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH, AHMEDABAD
Per Pramod Kumar, VP:
By way of this appeal, the appellant has challenged correctness of learned CIT(A)’s order dated 8th June 2017, for the assessment year 2014-15.
In the first ground of appeal, the assessee is aggrieved of disallowance of Rs.9,18,921/- by invoking provisions of section 2(24)(x) r.w.s. 36(1)(va) of the Income-tax Act, 1961.
Having perused the material on record and having heard the rival contentions, we find that the CIT(A) has simply brushed aside contention of the assessee that so far as this disallowance is concerned the cheques were tendered well in time but were encashed late, and, for this short reason, the disallowance must be deleted. The copies of challans filed before us show that the assessee had paid PF dues for January’14, February’14 and March’14 on 15.02.2014, 14.03.2014 and 15.04.2014 respectively, and these cheques were cleared on 29.02.2014, 21.02.2014 &
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23.02.2014. Once the payments are made by the assessee in time, as in this case, there is no good reason to make the disallowance. We, therefore, delete the impugned disallowance of Rs.9,18,921/-.
Ground No. 1 is thus allowed.
In ground no.2, the assessee is aggrieved of the disallowance of Rs.63,037/- out of depreciation on Honda City Car, for personal use.
The assessee is a labour contractor. During the course of scrutiny assessment proceedings, it was noticed that the assessee has claimed depreciation on two cars – Honda City and Honda Civic. Both these cars were claimed to have been used for business purposes, though there was nothing to substantiate the claim. The Assessing Officer noticed that Honda City was acquired in the name of the assessee for personal purposes. He thus disallowed depreciation of Rs.1,26,074/- claimed on this car. When the matter travelled in appeal before the CIT(A), the disallowance was restricted to 50% of depreciation claim by observing as follows:-
“5.3 I have considered the facts of the case, Assessment Order and submission filed by Appellant. The AO has observed that Appellant has claimed depreciation on two cars i.e. Honda City and Honda Civic. As car loan of Honda City was sanctioned in personal name, AO has treated such expenditure as personal expenditure and disallowed depreciation of Rs.1,26,074/-. The Appellant has argued that above car was used for the purpose of business hence it cannot be stated that such car is used for personal purpose. The Appellant has claimed total vehicle expenditure of Rs.35,185/- in profit & loss account, out of which it has disallowed personal expenditure of Rs.5,000/- which proves that vehicle was used for the purpose of business. However, this contention of Appellant cannot be accepted fully, as personal usage of vehicle by individual cannot be denied and AO himself has allowed full depreciation on another vehicle being Honda Civic. When Assesses is using two cars for his individual proprietaryship business, disallowance of depreciation partially on such vehicle is justifiable and hence 50% of depreciation of such car for Rs.63,037/- is justifiable. Thus, addition made by AO is restricted to Rs.63,037/-. This ground of appeal is partly allowed.”
The assessee is not satisfied and is in further appeal before us.
We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position.
We see no reasons to disturb the stand of the CIT(A). The assessee has two cars and there is no conclusive proof that both these cars were entirely used for business purposes. The assessee does not have any other car. In these
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circumstances, denial of 50% depreciation seems to be in order. We confirm the same and decline to interfere in the matter.
Ground no.2 is dismissed.
In the result, the appeal is partly allowed. Pronounced in the open court today on the 11th June, 2019
Sd/- Sd/-
Mahavir Prasad Pramod Kumar (Judicial Member) (Vice President ) Ahmedabad, the 11th day of June, 2019 **bt Copies to: (1) The appellant (2) The respondent (3) Commissioner (4) CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad
Date of dictation: .....order prepared as per 5 pages manuscripts of Hon’ble VP- attached.....11.06.2019... 2. Date on which the typed draft is placed before the Dictating Member: .. 11.06.2019..... 3. Date on which the approved draft comes to the Sr. P.S./P.S.: …11.06.2019... 4. Date on which the fair order is placed before the Dictating Member for Pronouncement: .... 11.06.2019... 5. Date on which the file goes to the Bench Clerk : . ……. 6. Date on which the file goes to the Head Clerk : ……………………………. 7. The date on which the file goes to the Assistant Registrar for signature on the order: …. 8. Date of Despatch of the Order: ………………......