AGRAWAL ROADLINES PVT. LTD.,,GANDHIDHAM vs. THE DY. CIT, CIRCLE-1(1)(1),, AHMEDABAD

The learned CIT(A) has erred both in law and on the facts of the case in confirming disallowance made by the AO U/S.14A of the Act r.w.r. 8D of the Income-tax Rules, 1962 to the extent of exempt income of Rs.3,715/-.

The learned CIT(A) has erred both in law and on the facts of the case in confirming the disallowance of expense incurred for increase in share capital u/s. 35D of the Act to the extent of Rs. 39,850/- (wrongly mentioned at Rs.7,970/-).

Alternatively and without prejudice, the expense incurred for increase in share capital should be allowed as business expense u/s. 37 of the Act.

The learned CIT(A) has erred both in law and on the facts of the case in limiting grant of depreciation to 15% on the opening balance comprising addition made to block of commercial vehicles in AY 2013-14 instead of 50%.

Both the lower authorities have passed the orders without properly appreciating the facts and they further erred in grossly ignoring various submissions, explanations and information submitted by the appellant from time to time which ought to have been considered before passing the

The learned CIT(A) has erred in law and on facts of the case in confirming action of the Id. AO in levying interest u/s.234A/B/C of the Act.

The learned CIT(A) has erred in law and on facts of the case in confirming action of the Id. AO in initiating penalty u/s.271(i)(c) of the Act.

The fact in brief is that return of income declaring income of Rs. 32,28,860/- was filed on 28th Sep, 2013. The case was subject to scrutiny and notice u/s. 143(2) of the act was issued on 4th Sep, 2014. During the course of assessment proceedings, the assessing officer noticed that assessee has claimed depreciation of Rs. 95,12,760/- @

Aggrieved assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee.

During the course of appellate proceedings before us, the ld. counsel has filed paper book comprising copies of document and detail of information furnished before the lower authorities. After referring the pages of paper book, the ld. counsel has contended that assessee has made depreciation correctly in respect of repair carried out on commercial vehicles purchased in financial year 2009-10 and 2010-11 on which depreciation is available @ 50%. The ld. counsel has further contended that otherwise the whole amount of expenditure should be allowed as revenue expenditure as the amount of repair is not categorized to any other block of asset. On the other hand, the ld.

We have heard both the sides and perused the material on record. During the course of assessment, the assessee has claimed depreciation @ 50% i.e. on tankers. During the course of assessment, the assessing officer has restricted the claim of depreciation @ 30% in respect of addition made to such commercial vehicles. The commercial vehicles were purchased by the assessee during F.Y. 2008-09 and 2009-10 which were eligible to special rate of depreciation @ 50%. It is noticed that no new vehicle has been purchased by the assessee during the year under consideration. It is observed that no depreciation can be claimed for individual assets under income tax act because of concept of block of assets. Therefore, we are of the view that the depreciation in the case of the assessee is eligible as per the block of asset otherwise if such expenditure are put in the category of repair/revenue expenditure then the full claim of such expenditure are to be allowed. Since the assessing officer has treated such expenditure as capital expenditure, therefore, we consider that no new asset has been created on renovation of the commercial vehicle. Therefore, the claim of the assessee for depreciation @ 50% applicable to the particular block of assets is justified. Accordingly, we direct the assessing officer to provide the depreciation @ 50% applicable to the block of assets in the case of the assessee. Accordingly, this appeal of the assessee is allowed.