TaxTMI 
TaxTMI 
2018 (2) TMI 1521
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....he Revenue has raised the following grounds:- "1. That on the facts and in the circumstances of the case the Ld. CIT(A) has erred in deleting the disallowance on purchase of tyres for Rs.5,91,642/-/ and in allowing depreciation on addition to fixed assets for Rs.13,67,889/-. 2. That on the facts and in the circumstances of the case the Ld. CIT(A) has erred in allowing depreciation of Rs.87,45,827/- @ 30% block on dumpers and drippers as against depreciation @ 15% block allowed by the AO. 3. That the appellant craves leave to add, alter/or amend any of the grounds of appeal during the course of hearing." 3. First issue raised by Revenue in ground No.1 is that Ld. CIT(A) erred in deleting the addition made by Assessing Officer for Rs.5,91,642/- on account of purchase of tyres as well as depreciation on fixed assets of Rs.13,67,889/-. 4. Briefly stated facts are that assessee in the present case is a private limited company and engaged in business of earth moving activities and construction activities. The assessee in the year under consideration has made addition made in the fixed assets in the form of tyres / other accessories of dumper & excavators. These assets were cat....
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....te proceedings, the Ld. A/R has explained that the appellant had purchased tyres for Rs.14,16,688/- from M/s Tyre Arcade during the year. Out of the said purchase, the amount of Rs.13,67,889/- was capitalized & shown as fixed assets and the remaining amount of Rs.48,789/- was debited to the P & L A/c as expenses for spare. During the course of the scrutiny am, the appellant had submitted the supporting bills as well s the ledger copy of M/s Tyre Arcade before the AO. However, the AO has treated the entire purchases from Tyre Arcade as bogus. The Ld. A/R has stated that the AO has also wrongly taken the purchase value as Rs.19,59,531/- instead of the correct figure of R.14,16,688/-. The AO has treated the purchases from M/s Tyre Arcade as bogus on the ground that the cheques were dishonoued. The Ld. A/R has explained that the dishonour of cheques cannot be a sound ground for treating the purchases s bogus. The Ld. A/R has further explained that the appellant company was short of liquid fu9nds and the cheques were not honoured by the bank for insufficient balances available in its accounts. The Ld A/R has further clarified that fresh cheques were issued to M/s Tyre Arcade in subseque....
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....purchases of Rs. 19,59,531.00 and the balance of Rs. 5,91,642.00. (note the sum of Rs. 11,30,838.00 & 5,91,642.00 do not match with the amount of Rs. 19,59,531.00). We note that the copy of the ledger of M/s Tyre Arcade was available before the AO and no defect was reported in the copy of ledger. Thus in our considered view the finding of the AO depends on the wrong assumption of facts it does not represent the correct amount in view of the fact as discussed above. Thus, we are of the opinion, the addition made by the AO is not sustainable. The ld. DR has also not brought anything on record contrary to the findings of ld. CIT-A. In the light of above reasoning, we hold that the order of the Ld. CIT(A) is correct and in accordance with law and no interference is called for. We hold accordingly. Consequently, Revenue's ground is dismissed. 8. Next issue raised by Revenue in ground No.2 is that Ld. CIT(A) erred in allowing depreciation on dumpers and trippers @ 30% whereas AO calculated the depreciation @ 15%. 9. During the course of assessment proceedings, AO calculated the depreciation @ 15% as dumpers and trippers whereas assessee claimed depreciation @ 30%. Thus, AO disallowed ....
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....les 1962 as applicable for AY 2008-09. A pay loader is a heavy equipment which is used to load materials such as debris, rock, sand, logs and other raw materials into a tipper / dumper or railcar. Considering the functional test, the pay loader cannot be treated as motor lorry. Accordingly, restricting the depreciation on pay loaders @ 15% instead of 30% is confirmed. However, the AO is directed tore-compute the WDV of the pay loaders as on 31.03.2008 after allowing depreciation @ 15% on it. This ground of appeal is partly allowed." The Revenue, being aggrieved, is in appeal before us. 11. Before us both party relied on the order of Authorities Below as favorable to them. 12. We have heard the rival contentions of both the parties and perused the material available on record. At the outset, Ld. AR for the assessee pleaded that identical issue has been decided in favour of assessee by the Hon'ble Co-ordinate Bench of this Tribunal in ITA No.1296/Kol/2015 for A.Y. 2010-11 dated 18.10.2017, The Ld. DR fairly agreed that the issue involved is covered in favour of assessee. We reproduced the same for the sake of clarity:- "3. We have heard rival submissions and gone through th....
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....inal touches involved in a construction work that result in the carrying on of the business. The various activities from the beginning to the end will be part of the business. Machine used in the business of construction is eligible for investment allowance as is clear from section 32A(2)(b)(iii). The phrase "the business of construction is wide and, normally, a business of construction involves construction of buildings, dams, roads, channels, etc. Machinery which is necessary for business of construction involving several activities cannot be held as not contemplated by Parliament as covered for the purpose of investment allowance. The words and phrases used in a statute will have to be understood in the context in which they are used. Clause (b) in the second proviso to section 32A has to be read in the setting in which other clauses (a), (c) and (d) are used. Specially, clauses (a) and (b) in the second proviso make it clear that exclusion from the provision is only in respect of the machinery or plant or appliances connected with the administrative part of the business, i.e., those used in the office premises or residential accommodation of the assessee. Naturally, road ....
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..../Kol/2013 for A.Y. 2008-09 of Revenue's appeal and the findings given in ITA No.2241/Kol/2013 shall apply to this case also with equal force. Consequently, Revenue's ground is dismissed. 18. Next issue raised by Revenue in ground No.2 is that Ld. CIT(A) erred in deleting the addition made by the AO on account of non-deduction of Tax Deducted at Source (TDS) u/s. 194C r.w.s 40(a)(ia) of the Act on the basis of additional evidence. 19. During the course of assessment proceedings, AO observed that assessee has claimed transportation charges of Rs.1,42,033/- without deducting the TDS u/s. 194C r.w.s. 40(a)(ia) of the Act. On confrontation, the assessee failed to file necessary explanation. Therefore, AO disallowed the same and added to the total income of assessee. 20. Aggrieved, assessee preferred an appeal before Ld. CIT(A). The assessee before Ld. CIT(A) submitted that in none of the case payment is exceeding the limit as specified u/s. 194C of the Act. As such, there was no liability for deducting TDS. However, Ld. CIT(A) after considering the submissions of assessee deleted the addition made by AO by observing as under:- "3.3 I have carefully considered the observation of the....