TaxTMI 
TaxTMI 
2018 (5) TMI 435
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....e restricted to 15% and the assessee did not furnish any explanation. The depreciation on vehicles is allowed at higher rate @ 30% on commercial vehicles which are running on hire. If the vehicles are used in the business of the assessee, eligible depreciation is @ 15% on vehicles. In the instant case, though assessee had claimed the depreciation @ 30%, no evidence was produced before the A.O. to prove that the assessee had used the vehicles for running them on hire. Therefore, the A.O. restricted the depreciation @ 15% and disallowed the balance amount of Rs. 13,07,021/- 3. Aggrieved by the order of the A.O., the assessee went on appeal before the CIT(A). Before the Ld. CIT(A) also, the assessee has not produced any material evidence to show that the vehicles are used in running them on hire. The assessee has neither produced the agreement nor any document at the time of appeal also. Therefore, the Ld. CIT(A) confirmed the addition made by the A.O. 4. Aggrieved by the order of the Ld. CIT(A), the assessee has taken up the matter to the Tribunal. 5. During the appeal hearing, the Ld. A.R. argued that in the earlier years, the assessee has used the vehicles for running on h....
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.... used in the business of running them on hire are eligible for the depreciation @ 30%. Though in the earlier years, the assessee claimed the depreciation @ 30% which was allowed by the department, merely because of the vehicles were included in the block of assets, the higher rate of depreciation cannot be allowed unless the same are put to use for running them on hire. This fact of commercial usage of vehicles was not established by the assessee with any documentary evidence. For a query from the bench, the Ld. A.R. of the assessee has accepted that during the impugned assessment year, the assessee has not used the vehicles for running them on hire. The assessee has relied on the decisions of Delhi High Court in the case of CIT(A) Vs. Yamaha Motor India Pvt. Ltd., 328 ITR 0297. In cited case, the question raised was allowability of depreciation in the case of discarded and written off assets in the books of accounts and passive usage of the vehicles but not the rate of depreciation of vehicles running them on hire. In the case of CIT(A) Vs. Oswal Agro Mills Limited (341 ITR 0647), the issue was allowability of depreciation on block of assets. Hon'ble High court held in that case t....
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....egard to each and every depreciable assets was time consuming both for the assessee and the Assessing Officer. Therefore, they amended the law to provide for allowing of the depreciation on the entire block of assets instead of each individual asset. The block of assets has also been defined to include the group of assets falling within the same class of assets. 32. Another significant and contemporaneous development, which needs to be noticed is that the Legislature has also deleted the provision for allowing terminal depreciation in respect of each asset, which was previ- ously allowable under section 32(1) (iii) and also taxing of balancing charge under section 41(2) in the year of sale. Instead of these two provisions, now whatever is the sale-proceed of sale of any depreciable asset, it has to be reduced from the block of assets. This amendment was made because now the assessees are not required to maintain particulars of each asset separately and in the absence of such particular, it cannot be ascertained whether on sale of any asset, there was any profit liable to be taxed under section 41(2) or terminal loss allowable under section 32(1) (iii) . This amendment also....
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....f Rs. 23,61,223/- u/s 14A read with rule 8D of the Act. 9. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. The Ld. A.R. argued that no expenditure required to be disallowed in case the assessee did not earn any exempt income. In the instant case, the assessee has not earned any dividend income which is exempt u/s 14A of the Act. On identical facts, this Tribunal in the case of D. Veerabhadra Reddy (HUF) Vs. JCIT, Kakinada in ITA No.263/Vizag/2014 dated 23.6.2017 for the assessment year 2009-10 placing reliance on Hon'ble Madras High Court judgement in the case of Redington India Limited Vs. Additional CIT 77 Taxmann. Com 257 held that no disallowance is called for when there is no exempt income. For ready reference, we extract relevant paragraph No.6 of this Tribunal order which reads as under: "6. We have heard the rival submissions and perused the material on record. The assessee has rental income from godowns and the business loss. The assessing officer has completed the assessment u/s 143(3) by order dated 04.11.2011. The Ld.CIT has called for the record u/s 263 and issued the notice for....
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.... income which was examined by the AO and dropped the assessment proceedings and the Ld.CIT also satisfied that there is no case for revision on account of incorrect set off of business loss. With regard to the issue of disallowance u/s 14A as per the judicial pronouncements no disallowance is called for when there is no exempt income. Therefore, we are of the considered opinion that there is no case for revision of order u/s 263 and accordingly we set aside the orders of the CIT and allow the appeal of the assessee." 10. Since the facts are identical, we hold that no disallowance is called for u/s 14A of the Act in the absence of exempt income. Accordingly, the order of the Ld. CIT(A) on this issue is set aside and this ground of appeal of the assessee is allowed. 11. Ground No.3 is related to the credit for TDS. In the instant case, the assessee had received advances of Rs. 30.76 crores and the tax was deducted by the payer on the entire amount which was paid to the assessee. The assessee claimed TDS of Rs. 70,61,000/- in the return of income. However, the A.O. allowed the TDS to the extent of income admitted in form No.26AS as per section 199 read with rule 37BA of the Act ....