Tribunal upholds appeal delay due to Covid-19, disallows depreciation on non-owned vehicle, labor expenses

The Tribunal upheld the decision to condone the delay in filing the appeal due to reasons related to non-receipt of the order and the impact of the Covid-19 pandemic. Additionally, the Tribunal agreed with the disallowance of depreciation on a vehicle not owned by the assessee and the disallowance of 5% of labor expenses due to lack of proper vouchers and evidence. The appeal was dismissed, affirming the lower authorities' disallowances.

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Issues Involved:
1. Condonation of delay in filing the appeal.
2. Disallowance of depreciation on a vehicle.
3. Disallowance of 5% of labor expenses.

Summary of Judgment:

1. Condonation of Delay in Filing the Appeal:
The assessee filed the appeal with a delay of 275 days, citing reasons such as non-receipt of the order by the assessee and the impact of the Covid-19 pandemic. The Tribunal condoned the delay considering the Supreme Court's orders extending limitation periods due to the pandemic.

2. Disallowance of Depreciation on Vehicle:
The Assessing Officer disallowed the depreciation claim of Rs. 6,91,621/- on a vehicle not owned by the assessee but by his son. The CIT(A) upheld the disallowance, emphasizing that ownership is a fundamental criterion for claiming depreciation. The Tribunal agreed with the CIT(A) and distinguished the case laws cited by the assessee, noting that in those cases, the vehicles were owned by partners or directors of the entities, unlike the present case.

3. Disallowance of 5% of Labor Expenses:
The Assessing Officer disallowed 5% of labor expenses amounting to Rs. 4,66,490/- due to lack of proper vouchers and payments made in cash. The CIT(A) directed verification of the expenses and allowed disallowance to the extent of unverifiable claims. The Tribunal upheld the disallowance, noting that the assessee failed to provide sufficient evidence to substantiate the labor expenses.

Conclusion:
The Tribunal dismissed the appeal, upholding the disallowances made by the lower authorities. The order was pronounced in the open court on 22nd March 2023.

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