TaxTMI 
TaxTMI 
2014 (2) TMI 940
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....case. 2. The Ld. CIT(A) has erred allowing the depreciation of Rs. 91,39,486/- on a ship M.V. Maanav Star even when the ship was not put to use for the purpose of business of the assessee company during the respective year. 3. The Ld. CIT(A) has erred in deleting the addition of Rs. 7,62,500/- on account of lease rent of luxury cruiser as the rent receivable for the whole of the month had accrued to the assessee and the assessee was following mercantile system of accounting. 2.1. The assessee is a domestic company and filed the return of income on 16.11.205 declaring total income of Rs. 24,17,280/-. The said return was processed u/s. 143(1). Later on, the case was selected for scrutiny and the assessment u/s. 143(3) was completed o....
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....ye Wharf to „Rye Anchorage' and the main engine was stopped due to bad weather and as a result the vessel was grounded on 11.09.2004 and the vessel arrived at Mormugao on 28th March, 2005. Therefore, as per this document assessee has not used the vehicle in the relevant Assessment Year. Therefore, AO has disallowed the depreciation of Rs.91,39,468/-. 3. The matter carried to CIT(A) and CIT(A) has allowed the claim by observing as under: "3.3. I have gone through the assessment order and submission of appellant. The appellant has submitted enough documentary evidence to prove that the vessel M.V. Mannav Star was actually put to use during the year under consideration and therefore, the A.O is directed to allow the depreciation of....
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.... (Indian Ocean). The assessee has earned the income after returning from Moroni. The vessel came to Mumbai and was loaded cargo at Mumabi and sailed to port Mina Rashid, Dubai. Thereafter, vessel had gone to various places thus, the vessel has earned the total freight charges of Rs. 19,994,978/- which is reflected in the profit and loss account. Therefore, we are of the view that the assessee has used this vessel for carried out the business. In view of this, we are of the view that CIT(A) is justified in his action and our interference is not required. In the result, the appeal is dismissed on this ground no. 1. 4. Ground No. 2. On perusal of the Profit & Loss account it was noticed that assessee has received lease rent of Rs.1,61,18,20....
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....ant was correct in taking 50% of the lease rent, i.e. upto 31st March, as income for the year under consideration. Therefore, the AO is directed to delete the addition of Rs.7,62,500/- and this ground of appeal of the appellant is allowed accordingly. 5.1. The Learned DR relied upon the order of AO and Learned DR submitted that though the assessee has received the lease rent at Rs.1,68,80,700/- he has only accounted in the books at Rs. 1,61,18,200/- and assessee has no justification for showing the less amount. The lease rent accrued to the assessee is income of the assessee and AO has rightly added to the income. 5.2. We have heard the rival contention of both the parties. Looking to the facts and circumstances of the case, we find t....