Tribunal rules on appeal: non-statutory bonus allowed, reduced depreciation, partial disallowance.

The Tribunal partly allowed the appeal by overturning the disallowance of non-statutory bonus under section 43B, denying higher depreciation for heavy earth moving machinery, and reducing the disallowance under section 40(a)(ia) to 30%. The appeal was decided in favor of the appellant on certain grounds while dismissing others.

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Issues involved:
1. Disallowance of adhoc payment claimed as bonus under section 43B of the Act
2. Non-allowance of higher rate of depreciation for heavy earth moving machinery
3. Disallowance under section 40(a)(ia) of the Act
4. Non-granting of benefit of credit of TDS

Analysis:

Issue 1: Disallowance of adhoc payment claimed as bonus under section 43B of the Act
The appellant challenged the disallowance of adhoc payment of Rs. 8000/- to laborers as bonus, contending it was not statutory bonus under section 43B. The laborers were paid ex-gratia bonus for timely project completion. The Tribunal noted the absence of statutory bonus for laborers and ruled that section 43B did not apply to non-statutory bonuses. The disallowance was overturned as the bonus was not statutory, hence section 43B did not apply. Ground No. 3 was allowed.

Issue 2: Non-allowance of higher rate of depreciation for heavy earth moving machinery
The appellant claimed entitlement to higher depreciation for heavy earth moving machinery used in a contract under PMGSY, arguing the machinery was effectively hired to the contractee. However, the respondent contended that the machinery was not hired out and no hire charges were shown. The Tribunal found no evidence of hiring the machinery and denied the higher depreciation claim. Ground No. 4 was dismissed.

Issue 3: Disallowance under section 40(a)(ia) of the Act
The appellant sought a reduction in disallowance under section 40(a)(ia) from 100% to 30%, citing an amendment effective from 1.6.2015. The Tribunal directed the Assessing Officer to limit the disallowance to 30% in line with the amended provision. Ground No. 5 was partly allowed.

Issue 4: Non-granting of benefit of credit of TDS
The appellant withdrew the appeal related to the non-granting of TDS credit during the hearing. Ground No. 6 was dismissed as not pressed.

In conclusion, the Tribunal partly allowed the appeal, overturning the disallowance of non-statutory bonus, denying higher depreciation for machinery, and reducing the disallowance under section 40(a)(ia) to 30%. The appeal was decided in favor of the appellant on certain grounds while dismissing others.

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