TaxTMI 
TaxTMI 
TaxTMI 
2016 (7) TMI 904
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....t for the year ended 31st March 2009 , the Assessee had shown Purchases of HSD, Power Fuel, Turbo etc. to the Rs. 25,47,53, 113/-. As per confirmation received from Hindustan Petroleum Corporation Ltd. twice on 27/07/2011 and on 15/11/2011, in response to information sought under section 133(6) of the Act, the amount of purchases made by the Assessee from them was informed as Rs. 25,42,14,840/-. The AO was therefore of the view that the Assessee has declared purchases in excess in his trading account by Rs. 5,38,272/- which has the effect of reducing the income declared by the Assessee by the said sum. According to the AO, the difference of Rs. 5,38,272/- had to be treated as bogus purchase and had to be be added back to the total income. The Assessee when called upon by the AO to explain the above discrepancy submitted that a sum of Rs. 4,20,818/- was inadvertently inflated by misposting of an invoice dated 03/10/2008 in Oil Account. Another instance of repayment of working capital loan of Rs. 1,17,454/- was wrongly included in the oil account. Both the aforesaid amounts together make up the difference of Rs. 5,38,272/-. Those figures were wrongly included with purchases. If those....
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....ubricants To Purchases of HSD, 25,42,14,841.82 By Normal Loss Power, Turbo HSD, Power, Turbo NIL To Purchase of Lubricants 10,23,574.72 By Closing Stock 21,99,141.75 To Gross Profit b/d 47,24,500.40 HSD,Power,Turbo& Lubricants Total 26,27,92 582.19 Total 26,27,92,582.19 Therefore, either way it is looked into, difference of Rs. 5,38,272/- persists and as such the assessee is not immune of inflated purchase figure. The gross profit is directly hit by such reduction in purchase. Under the circumstance the difference of Rs. 5,38,272/- is treated as bogus purchase and accordingly is added back to the total income. " 6. Before CIT(A) the assessee reiterated the submissions that were made before the AO. CIT(A) however confirmed the order of AO by observing as follows :- "3.2. I have carefully considered the submission made. The appellant has stated that if there is excess debit of purchase, closing stock would automatically go up by the same amount. However, this is true only in case where complete quantity records are' maintained in respect of purchase, sales and stock and the same are meticulously tallied. On the other h....
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....ases there was neutralizing entry whereby there was increase in the value of the closing stock and therefore there cannot be any inference of suppression of income. Even before us no fresh material is brought to our notice to either dislodge the findings of CIT(A) or to come to a conclusion contrary to the one reached by CIT(A). We therefore dismiss ground No.1 raised by the assessee. 10. Ground Nos. 2,3,4 and 5 raised by the assessee and additional ground raised by the assessee read as follows :- "II That the Ld. CIT(A) is wrong to reject the claim for Depreciation in respect of the Oil Tanker acquired this year and after performing all necessary formalities factual and legal for its business use and keeping a driver ever ready at the wheel; III That the Ld. CIT(A) is wrong to hold that the Tanker was not ready for instant use for business and he is absolutely wrong in rejecting the Calcutta High Court decision in the case of CIT V Union Carbide(P) Ltd 254 ITR488 referring to some other decisions including the Cal .High Court decision as reported in 206 ITR 682 in the case of CIT V Oriental Coal Co. Ltd.; IV That the Ld' Commissioner is absolutely misguided himself in h....
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....the assessee had declared income of Rs. 42,000/- as per the provision of section 44AE of the Act. The AO was of the view that since the income of the assessee was declared u/s 44AE of the Act no deduction allowable under the provision of sections 30 to 38 of the Act could be allowed as laid down in the provision of section 44AE (3) of the Act. AO therefore did not allow the claim of the assessee for deduction of the aforesaid sums. 13. The assessee claimed before the AO that the declaration of income from oil tanker at Rs. 42,000/- u/s44AE of the Act was a mistake committed by the accountant. In this regard the assessee pointed out that the provision of section 44AE of the Act will apply only to an assessee who owns goods, carriage and who is engaged in the business of plying, hiring or leasing such goods carriages. The assessee pointed out that since the oil tanker in question was purchased by the assessee for use in its own business and since the oil tanker was not engaged in the business of plying, hiring or leasing, the declaration of income u/s 44AE of the Act was erroneous. 14. The AO however did not agree with the stand taken by the assessee and was of the view that such a....
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....efully considered the submission made. The issue of depreciation is being taken up first. The two primary conditions for claiming depreciation are ownership of asset and putting it to use for purpose of business. There is no dispute over the fact that the asset i.e tanker acquired during the year was not actually put to use. However, the contention of the appellant is that it was kept ready for use and therefore depreciation should be allowed in light of decisions cited by her. The appellant was asked to support the contention that the tanker was kepi ready for use by producing evidence. it was informed by the appellant that the tanker was acquired in the month of June 2008 and all formalities like registration etc were duly completed in August 2008. However, the tanker could not be actually used, as before the tanker could be used for bringing oil from Hindustan Petroleum, permission of Hindustan Petroleum was required. The appellant was asked to produce documents in respect of such permission sought by her. In response, a letter dated 05.10.2009 from HPCL addressed to the appellant informing the rates offered and a bank guarantee dated 29.10.2009 was produced. T....
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....ase of Dinesh kumar Gulabchand Agarwal (supra) specifically dealt with issue of depreciation on trucks kept ready for use but not actually used. Thus, a large number of the judicial authorities have taken a considered view, that depreciation is allowable only on actual usage and not merely for the asset being kept ready for use. Their ratio is in consonance of the fact, that the term used in section 32 of 1.T.Act, 1961 is 'used for purposes of business' and not 'kept ready for use'. It is undisputed that-the tanker was not actually used during the year. Considering the foregoing discussion, the disallowance of depreciation on tanker is confirmed." 17. Aggrieved by the action of CIT(A) in sustaining the disallowance to the deduction of depreciation and not allowing the expenditure of road tax and insurance as revenue expenditure the assessee has raised ground nos. 2 to 5 and the additional grounds before the Tribunal. 18. We may, at the outset, point out that ground no.5 raised by the assessee and the additional grounds raised by the assessee are general arguments. In fact additional ground no.2 has been decided in favour of the assessee by the CIT(A) and the asses....