PRINCIPAL COMMISSIONER OF INCOME TAX-1 vs. AKASH OIL FIELD SERVICE (P) LTD,

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TAXAP/352/2018HC GujaratGJHC24011243201816 April 2018Bench: HONOURABLE MR. JUSTICE AKIL KURESHI,HONOURABLE MR. JUSTICE B.N. KARIA2 pages

AI SummaryDismissed

What did the High Court hold?

The High Court held that no question of law arises from the ITAT's order. The Tribunal had reversed the Assessing Officer's disallowance of excess depreciation claimed by the assessee on trucks and truck-mounted equipment. The Tribunal's reasoning was based on documents produced by the assessee, which indicated that the assessee was engaged in the business of providing oil field related equipment and had indeed given vehicles on hire to parties like ONGC and GSPCL, as evidenced by work orders. The High Court found no error in this determination by the Tribunal. The appeal was therefore dismissed.

What were the facts?

The Revenue, represented by the Principal Commissioner of Income Tax-1, filed an appeal against an order of the Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, dated August 23, 2017. The assessee, Akash Oil Field Service (P) Ltd, had claimed higher depreciation at 30% on trucks and truck-mounted equipment, asserting they were given on hire. The Assessing Officer disallowed this, contending the equipment was for the assessee's own use. The CIT(A) and the ITAT overturned the Assessing Officer's decision, finding that the assessee was in the business of providing oil field equipment and had indeed hired out vehicles to entities like ONGC and GSPCL, supported by work orders.

What were the issues?

1. Whether the Appellate Tribunal has erred in law and on facts in deleting the disallowance of excess depreciation claimed on truck and truck-mounted equipment of Rs. 64,06,050/= despite the fact that no income was shown on account of hiring in the profit and loss account? Assessee's Contention: The judgment does not record any specific contentions made by the assessee before the High Court. However, the ITAT's decision, which was upheld, implies the assessee argued that the trucks and equipment were genuinely used for hiring out to various parties, supporting the claim for higher depreciation. Revenue's Contention: The Revenue argued that the ITAT erred in deleting the disallowance of excess depreciation of Rs. 64,06,050/=, particularly highlighting that no income from hiring was reflected in the profit and loss account. This suggests the Revenue contended that the claim for higher depreciation was not substantiated by actual income generation from hiring activities.

AI-generated summary — verify with the full judgment below

C/TAXAP/352/2018 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL No. 352 of 2018 ============================================================= PRINCIPAL COMMISSIONER OF INCOME TAX-1 Versus AKASH OIL FIELD SERVICE (P) LTD ============================================================= Appearance : Mrs MAUNA M BHATT, Advocate for the PETITIONER(s) No. 1 ============================================================= CORAM: HONOURABLE Mr. JUSTICE AKIL KURESHI and HONOURABLE Mr. JUSTICE B.N. KARIA 16th April 2018

ORAL ORDER (PER : HONOURABLE Mr. JUSTICE AKIL KURESHI) Revenue is in appeal against the judgment of the Income Tax Appellate Tribunal, Ahmedabad Bench dated 23rd August 2017 raising following question for our consideration :- “Whether the Appellate Tribunal has erred in law and on facts in deleting the disallowance of excess depreciation claimed on truck and truck mounted equipments of Rs. 64,06,050/= despite the fact that no income was shown on account of hiring in profit and loss account ?” Fact on record would suggest that the assessee had claimed higher depreciation @ 30% on trucks and truck mounted equipments on the ground that the same were given on hire. The Assessing Officer, however, disallowed such higher depreciation Page 1 of 2

C/TAXAP/352/2018 ORDER holding that the assessee had used the equipments for its own purpose. CIT [A] and the Tribunal, however, reversed the order of Assessing Officer. On the basis of documents produced by the assessee, it was held that the assessee was engaged in the business of providing oil field related equipments and that the assessee had given vehicles on hire to the various parties, such as ONGC, GSPCL for which work orders were also issued. No question of law arises. Tax Appeal is dismissed. [Akil Kureshi, J.] [B.N Karia, J.] Prakash Page 2 of 2

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