2015 (3) TMI 223

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....depreciation. The AO noted that the assessee firm claimed depreciation of Rs. 2,13,705/- for vehicles during the year. The assessee was asked to produce logbook along with diesel expenses, which were not produced. It was, therefore, observed that in the absence of record, it is impossible to ascertain business use / personal use. 20% of the depreciation in a sum of Rs. 42,741/- was disallowed. The assessee filed three hire agreements of taxis and one agreement of taxi taken on hire with the AO, which were not considered. Since the taxis were given on hire, therefore, there is no question of maintaining logbook and vouchers for expenses. As per hire agreements, all such expenses were to be born by the hirer. The ld. CIT(A), considering that ....

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....d to SBI against loans taken on Alto and Honda Cars. The same is appearing in the balance sheet. Since the assessee is using these taxis for hire, therefore, interest was allowable deduction. The ld. CIT(A) without giving any reasons for decision, confirmed the addition, holding that no evidence has been filed. It, therefore, appears that this issue also requires re-consideration at the level of ld. CIT(A). The assessee is using taxis for hiring and claimed interest paid to the bank for loan taken against purchase of vehicle given on hire. Therefore, these facts should have been verified from the record and the hiring agreements etc. The ld. CIT(A) did not pass any speaking order on this issue and no reasons have been given for confirming t....

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.... reasons should not have mentioned the agreement to be sham. When vehicles have been given on hire, there is no question of maintaining the records as was claimed by the AO. The ld. CIT(A), therefore, should have verified all the transactions in detail and the agreements in question and should have pass the reasoned order on the same. We accordingly, set aside the order of the ld. CIT(A) and restore this issue also to his file with direction to re-decide this issue by verifying all the facts and by giving reasons for decision in the appellate order. Opportunity of being heard shall be given to the assessee. Ground No. 3 is also allowed for statistical purposes. 7. On ground No. 4, the assessee challenged the addition of Rs. 1,50,000/-. T....