Tribunal rules in favor of assessee, directs deletion of added depreciation from contract income

The Tribunal allowed the appeal, ruling in favor of the assessee and directing the deletion of the added depreciation amounts from contract income and Tripper income. The Tribunal found that the assessee had not claimed depreciation under sections 44AD and 44AE as assumed by the authorities, leading to the incorrect additions by the Assessing Officer and Ld. CIT(A). The order was pronounced on 12th October 2021.

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Issues:
Appeal against order of Ld. CIT(A)-1, Guwahati for Assessment Year 2012-13 - Addition of depreciation from contract income and Tripper income - Eligibility to claim depreciation under sections 44AD and 44AE of the Income-tax Act, 1961.

Analysis:
1. The appeal was the second round before the Tribunal due to a previous order recall. The primary grievance was against the addition of depreciation by Ld. CIT(A)-1, Guwahati. The assessee had not claimed depreciation on contract income and Tripper income under presumptive taxation u/s. 44AD and 44AE.

2. The AO added depreciation amounts of &8377; 16,320 and &8377; 9,06,000 from contract income and Tripper income, respectively. Ld. CIT(A) upheld these additions based on the ineligibility to claim depreciation under sections 44AD and 44AE. The appeal challenged this decision.

3. The Ld. AR argued that the assessee did not claim depreciation, as evidenced by the computation of total income and balance sheet. The AO's additions were made erroneously, and the Ld. DR could not counter this argument. The Tribunal noted that the assessee had not claimed depreciation as assumed by the AO and Ld. CIT(A).

4. After a detailed review, the Tribunal found that the assessee had not claimed depreciation on the mentioned items while computing tax under sections 44AD and 44AE. The AO's assumption of claimed depreciation was incorrect. Consequently, the Tribunal set aside the Ld. CIT(A)'s order and directed the deletion of the added depreciation amounts.

5. Ultimately, the Tribunal allowed the appeal of the assessee, ruling in favor of deleting the depreciation additions. The order was pronounced on 12th October 2021.

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