Appeal partly allowed for statistical purposes, royalty payment issue remitted for fresh consideration, depreciation allowance upheld.

The appeal by the revenue was partly allowed for statistical purposes. The Tribunal remitted the issue of relief on account of royalty payment against undisclosed investment in expenses to the Assessing Officer for fresh consideration in accordance with appellate orders. The Tribunal upheld the allowance of depreciation on a vehicle acquired during the year, as it was purchased for business and deemed ready for use, leading to the dismissal of the revenue's ground on this issue.

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Issues Involved:
1. Allowance of relief on account of royalty payment against undisclosed investment in expenses.
2. Allowance of depreciation on a vehicle acquired during the year.

Issue 1 - Relief on Royalty Payment:
The appeal by the revenue challenged the order of the CIT(A) granting relief on account of royalty payment against undisclosed investment in expenses. The revenue contended that the payment of royalty to the government has no relation to expenses of transportation and labor charges. The CIT(A) granted relief to the assessee based on the District Authorities' findings regarding illegal mining. The Tribunal noted that a similar case was remitted to the AO for fresh consideration in accordance with appellate orders. The Tribunal remitted the issue to the AO to consider it afresh after examining the appellate orders of higher authorities, ensuring the assessee's right to be heard. The Tribunal deemed the revenue's ground allowed for statistical purposes.

Issue 2 - Allowance of Depreciation:
Regarding the allowance of depreciation on a vehicle acquired during the year, the revenue argued that depreciation should not be allowed if the asset was not put to use for business. The CIT(A) allowed depreciation to the assessee, stating that once an asset was used for business, it was presumed ready for use in the business setup. The Tribunal upheld the CIT(A)'s decision, noting that the asset was purchased and came into the possession of the assessee within the relevant financial year. As the vehicle was acquired for the business and presumed ready for use, the CIT(A) correctly allowed depreciation, leading to the dismissal of the revenue's ground on this issue.

In conclusion, the appeal by the revenue was partly allowed for statistical purposes, with the Tribunal remitting one issue to the AO for fresh consideration and upholding the allowance of depreciation on the acquired vehicle.

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