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Income Tax Appellate Tribunal, “A” BENCH : KOLKATA
Before: Hon’ble Shri J.Sudhakar Reddy, AM & Hon’ble Shri S.S. Viswanethra Ravi, JM ]
ORDER Per J.Sudhakar Reddy, AM
This is an appeal filed by the revenue directed against the order of the Ld. Commissioner of Income Tax (Appeals)-16, Kolkata passed u/s 143(3) of the Income Tax Act, 1961.
After hearing rival contentions we hold as follows: Ground no. 1 and 2 are on the issue as to whether the assessee is the owner of the trucks and the claims of the assessee depends on this issue. The Ld. CIT(A) has given a factual finding that the assessee has proved that it is the owner of these trucks. This finding was based on evidence.
The Ld. CIT(A) at page 10 last para onwards held as follows:
M/s Associated Road Carriers Ltd. A.Yr.2011-12 “It is clear from the facts of the case and documents submitted before me vide the paper book that the appellant is the real owner of the vehicle. The loan agreement with the bank produced before me during the course of verification clearly states that money has been borrowed from the bank against the security of the vehicle owned by the appellant. There is no question of any lease in the present case. Hence the depreciation should be allowed in view of the submissions and documents produced before me and in course of the remands proceedings before the Deputy Commissioner of Income Tax.
As submitted by the A/R that the appellant company has been allowed depreciation on motor trucks every year, the assessee company cannot be denied the claim of depreciation on motor trucks.
Accordingly the Assessing Officer has erred in reducing the loan repayment amount from the depreciation claimed during the year. Repayment of loan is not allowable expenditure as it is capital in nature and should not be allowed as an expenditure.
The assessee company has been allowed depreciation on motor trucks every year and though principles of res judicata do not apply in income tax, yet the assessee company cannot be denied the claim of depreciation on motor trucks. Copy of the bills for trucks purchased had been submitted during the course of hearing and also before me along with copy of loan agreements for financing of the trucks purchased. It can be clearly seen from the bills enclosed that the assessee company is the owner of the trucks and the banks or financial institution have granted loan for the purchase of the same. Further statement of loans taken during the year along with statement of trucks purchased were filed before me.
The appellant company had taken the vehicle on loan and it can be clearly seen from the loan documents furnished before me and submitted by the A/R that the assessee company is borrower and not a lessee. It can be clearly seen from the loan document that the asset is offered as security in favour of the lender for due repayment of the facility granted by the lender.
Thus, there is no lease agreement whereby the asset is transferred to the appellant at the end of the term of the lease. There is merely loan taken from the bank against security of the vehicle purchased by the appellant.
The appellant is the actual owner of the vehicle and should be allowed the claim depreciation on the same.
It is clear from the facts of the case that the appellant is the real owner of the vehicle. The loan agreement with the bank (filed before me and also submitted before the Assessing Officer) clearly states that money has been borrowed from the bank against the security of the vehicle owned by the appellant. There is no question of any lease in the present case.
M/s Associated Road Carriers Ltd. A.Yr.2011-12 The appellant company has also furnished the following details before the Assessing Officer during the course of the remand proceeding and the same was produced before me for the perusal. Details of Vehicles purchased during the year 2010-2011 along with details as to whether it is financed by bank/ financial institution or self financed. Xerox copy of invoices for addition of assets for few vehicles along with copy of loan agreements were enclosed in the paper book submitted. The AO has erred in not considering the fact that the assessee has not taken vehicle on loan but also self - financed vehicles and hence the disallowance of depreciation is arbitrary and without any basis. Xerox copy of Assessment Orders for last few Assessment Years including Assessment Years 2012-13, 2013-14 were filed which clearly shows that no disallowance of depreciation has been made in earlier years or subsequent years. Hence in view of the aforesaid discussion the AO is directed to delete the disallowance of depreciation of Rs. 9106343/- on vehicles.”
We find no infirmity in this order. The ld. DR could not controvert these factual finding. Hence we uphold this judgment and dismiss the appeal of the assessee.
Ground no. 3 is on the issue of capital gains on sale of land. The Ld. CIT(A) has discussed this issue at page 12 last para of his order. The land-in-question was sold for Rs. 50,00,000/- and this was the circle rate fixed by the concerned authorities. The assessing officer, instead of adopting the actual amount received on sale, had taken a fair market value estimated by the registered valuer as the sale consideration. Hence in our view, the Ld. CIT(A) was right in upholding the contention of the assessee. Thus, this ground is dismissed.
Ground no. 4 is against the disallowance u/s 40a(ia) of the Act. The Ld. CIT(A) has given a factual finding at page 13 last para held as follows: “Copy of rent agreement was submitted before me. The Assessing Officer was given details of rent paid and in case the Assessing Officer required any clarification in respect of the same, it could have been requisitioned. The Assessing Officer should have given an opportunity to submit that TDS were not applicable on the payment. It is hereby submitted that the onus of proving that TDS is' applicable on the aforesaid payments in light of the rental agreements is on the Assessing Officer which in the 3
M/s Associated Road Carriers Ltd. A.Yr.2011-12 instant case had not been discharged. The Authorized Representative had submitted the rental agreements, vouchers as requisitioned in the remand proceedings also and based on the details submitted it is apparent that TDS is not liable on such payments. The details of the payment of rent to various co-owners were furnished during the course of hearing and the same was submitted before me. It can be clearly seen from the details furnished that the assessee company has deducted TDS wherever the amount of rent payment has exceeded the stipulated amount and in case the property is on co-ownership, the payment to each co-owner is exceeding the limit, The Assessing officer has made the disallowance on an arbitrary basis without going into the facts of the agreement and hence the addition made u/s 40a(ia) is liable to be deleted.” The ld. DR could not controvert this factual finding. Thus, we uphold the same and dismiss this ground of the revenue.
In the result, the appeal of the revenue is dismissed.
Order pronounced in the Court on 18.05.2018