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Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM
Before: SHRI V. DURGA RAO & SHRI D.S. SUNDER SINGH
आदेश /O R D E R
PER D.S. SUNDER SINGH, Accountant Member: This appeal is filed by the assessee against the order of the Commissioner of Income Tax (Appeals) [CIT(A)], Visakhapatnam vide I.T.A.No.854/2013-14/DC/C-3(1)/VSP/2014-15 dated 13.11.2014 for the assessment year 2010-11.
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The assessee has raised following grounds of appeal : 1. On the facts and in the circumstances of the case, the order of the learned Commissioner of Income Tax (Appeals) is erroneous in law and facts of the case. 2. On the facts and in the circumstances of the case the learned Commissioner (Appeals) erred in law and facts of the case in upholding the order of the Assessing Officer passed under Section 143(3) read with Section 147 of the Income-tax Act, 1961. 3. Even on the basis of information on record the learned Commissioner ought to have appreciated that the tippers and trucks used in the business of Assessee are vehicles run on hire eligible for higher rate depreciation. 4. The appellant crave leave to add to alter/ modify/ substitute/ amend/ withdraw all or any of the above grounds with the permission of the Honourable Bench.
Ground No.1 and 4 are general in nature which does not require specific adjudication.
Ground No.2 is related to the validity of assessment made u/s 147 r.w.s. 143(3). During the appeal hearing, the Ld.AR did not press this ground, therefore, this ground is dismissed as not pressed.
Ground No.3 is related to the depreciation on vehicles run on hire. During the assessment proceedings, the AO observed that the assessee claimed the depreciation @30% on the following vehicles :
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(i) Ashok Leyland Tankers Rs. 54,600 (ii) Ashok Leyland Tippers Rs. 64,45,141 (iii) Loaders Rs. 26,49,422 (iv) Tata Tippers Rs.1,14,23,808 ___________________ Total : Rs.2,05,72,971 ___________________ The total depreciation claimed by the assessee was Rs.2,05,72,971/-. The AO observed that the assessee used the vehicles in his own business but not run on hire, thus observed that the assessee is not entitled for higher rate of depreciation. Accordingly issued notice to the assessee calling for explanation and the assessee filed it’s explanation stating that the assessee’s business is loading unloading and transportation of coal, iron ore and argued that the assessee is entitled for higher rate of depreciation if the vehicles are used in transportation business. The assessee further argued that the vehicles comprising of tippers, loaders and tankers were registered by the Road Transport Authority as commercial vehicles, since its receipts were out of transportation, loading and unloading, hence contended that higher rate of depreciation is allowable on vehicles. The assessee relied on coordinate bench decision and also filed a copy of the order of the ITAT, ‘C’ Bench, Kolkata in ITA No.586 in the case of Bothra
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Shipping Services Vs. ACIT, wherein, the Tribunal held that the loaders, dumpers, mobile cranes, JCBs are heavy goods vehicles as defined under the Motor Vehicle Act and are accordingly entitled for higher rate of depreciation. The AO not being convinced with the explanation offered by the assessee observed that though the assessee has used vehicles for transportation, but not used in the business of running them on hire hence not entitled for higher rate of Depreciation and relied on the decision of Hon’ble Andhra Pradesh High Court in the case of CIT Vs. Progressive Engineering Co. reported in 230 ITR 739 and held that the assessee is eligible for normal rate of depreciation and accordingly allowed the depreciation @15%.
Aggrieved by the order of the AO, the assessee went on appeal before the Ld.CIT(A) and none appeared before the Ld.CIT(A). The Ld.CIT(A) passed ex-parte order after verifying the records and confirmed the addition made by the AO.
Against by the order of the Ld.CIT(A), the assessee is in appeal before this Tribunal. During the appeal hearing, the Ld.AR argued that the assessee has used the vehicles for transportation and also running them on
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hire, hence entitled for higher rate of depreciation. The Ld.AR also submitted that if permitted, the assessee would be in a position to demonstrate that the vehicles were used for the purpose of running them on hire as well as in transportation and requested for admission of additional evidence of the transportation bills raised.
On the other hand, the Ld.DR argued that the assessee did not produce any evidence, before the AO and the assessee did not represent the case before the Ld.CIT(A). The evidences which the assessee wants to produce before the Tribunal are additional evidences which should not be allowed. Since the assessee failed to furnish any evidence to establish that the vehicles were put to use for the purpose of running them on hire, there is no case for allowing the deduction and accordingly argued that the order of the Ld.CIT(A) be upheld.
We have heard both the parties and perused the material placed on record. In this case, the Ld.CIT(A) has passed the order ex-parte, since there was no representation from the assessee. The Ld.AR during the appeal hearing submitted that the assessee would be in a position to establish that the vehicles were used for running them on hire for
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transportation purpose with the bills and vouchers. Since the appeal was decided exparte, the assessee could not get opportunity to submit the additional evidence before the Ld.CIT(A). In our opinion, it will be fair and just to examine the details available with the assessee for the purpose of determining the correct rate of depreciation. For the lack of representation due to some unavoidable circumstances, justice should not be suffered. Therefore, in the interest of justice, we are of the considered opinion that the issue should be remitted back to the file of the Ld.CIT(A) to reconsider the issue after examining all the evidences and to decide the appeal afresh on merits. The Ld.CIT(A) will decide this issue of additional evidence under Rule 46A as per law and on facts. Accordingly, the appeal of the assessee is remitted back to the file of the Ld.CIT(A). 10. In the result, appeal of the assessee is allowed for statistical purpose.
The above order was pronounced in the open court on 17th Aug, 2018. Sd/- Sd/- (िी.दुगाा राि) (धड.एस.सुन्दर ससह) (V. DURGA RAO) (D.S. SUNDER SINGH) न्याधयकसदस्य/JUDICIAL MEMBER लेखासदस्य/ACCOUNTANTMEMBER धिशाखापटणम /Visakhapatnam ददिांक /Dated : .08.2018 L.Rama, SPS
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आदेश की प्रधिधलधप अग्रेधर्ि/Copy of the order forwarded to:- 1. अपीलाथी / The Appellant- M/s Sri Vamsi Krishna Shipping, Siripuram, Visakhapatnam 2. प्रत्यार्थी / The Respondent–DCIT, Circle-3(1), Visakhapatnam 3. The Commissioner of Income Tax-1, Visakhapatnam 4. The Commissioner of Income Tax (Appeals), Visakhapatnam 5. धिभागीय प्रधिधिधि, आयकर अपीलीय अधिकरण, धिशाखापटणम/DR, ITAT, Visakhapatnam 6. गाडाफ़ाईल / Guard file आदेशािुसार / BY ORDER // True Copy //
Sr. Private Secretary ITAT, VISAKHAPATNAM