AI Drafter 
TaxTMI 
TaxTMI 
2018 (6) TMI 225
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat the assessee, being an advocate, had purchased land from Shri K.R. Ramesh Kumar and Smt. Sarasakumari 20 cents of land in Survey No. 176/15 at Alangad Village and 114.75 cents of land in Survey No. 176/17, 16 dated 07/03/2007 respectively. The value shown in the document was Rs. 3,10,000/-. But it was admitted by sellers that the actual consideration was more than that in the document. The extra amount was paid by the assessee by clearing the liability of the sellers with SBT, Varapuzha Branch and the entire consideration was paid in cash. The Assessing Officer conducted enquiries from the said bank and the statement of closing of the liability was obtained. The Assessing Officer found that the liability of Palazhy Distributors amounting to Rs. 6,33,600/- was closed and the consideration of Rs. 4,03,600/- was the investment of the assessee and the same was treated as unexplained investment of the assessee u/s. 69 of the I.T. Act. On appeal, the CIT(A) confirmed the addition made by the Assessing Officer. 2.2 Against this, the assessee is in appeal before us. The Ld. AR submitted that the assessee has not deposited any money in the vendor's Bank account and if there was any d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(2001) 250 ITR 485 (P&H (iii) CIT vs. Smt. K.C. Agnes (2003) 263 ITR 354 (Ker) (iv) CIT vs. P.V. Kalyanasundaram (2006) 282 ITR 259 (Mad) (v) CIT vs. P.V. Kalyanasundaram (2007) 294 ITR 49 (SC) (vi) CIT vs. Chandni Buchar (2010) 323 ITR 510 (P&H) (vii) Paramjit Singh vs. ITO (2010) 323 ITR 588 (P&H) (viii) Rajdeep Builders vs. ACIT in ITA No.666/CHD/2010 dated 27/04/2012 (ITAT Chandigarh Bench) 2.4 On the other hand, the Ld. DR submitted that the claim of the assessee was based on general observations. The Ld. DR submitted that while the Assessing Officer relied upon the specific instances of the sale transaction by Shri Ramesh Kumar where he had accepted having received the actual consideration, which included clearing off his liability with the Bank as well as the cash received over and above that sum. Further it was submitted that the statement of the seller was verified by the Assessing Officer with the Bank and the same was found to be true. Moreover, the assessee was allowed an opportunity to cross examine the seller, Shri Ramesh Kumar wherein he confirmed having received the actual consideration more than the documente....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ddition made towards alleged understatement of sale value is not warranted. 2.6 In this case, there is no evidence available on record that the assessee has paid on-money, on the basis of which the Assessing Officer has quantified the on-money payment, he cannot make the impugned addition. The evidence brought on record is having no direct link to suggest that the amount deposited in the vendor's Bank account was by the present assessee towards payment of on-money and merely on the basis of the fact that the vendor had accepted the payment of on-money, no addition is to be made. In our opinion, as held by the Madras High Court in the case of CIT vs. Kalyanasundaram (supra), the burden of proof in this kind of transaction was that of the Revenue. The same view was taken by the Supreme Court in the case of K.P. Varghese vs. ITO (131 ITR 597). The question in the present appeal is squarely covered by the decision of the Kerala High Court in the case of CIT vs. Smt. K.C. Agnes & Others (2003) 262 ITR 354, wherein the High Court held that when a document shows fixed price, there will be a presumption that, that is correct price agreed upon by the parties. It is not necessary that the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ficer found that assessee had not rendered any services to the said company, not only in Kerala but anywhere in India. Accordingly, he considered the receipts from M/s. Rosy Blue (India) Pvt. Ltd. as income from other sources. Consequently, he disallowed the expenditure as incurred to earn this income. 3.3 Against this the assessee is in appeal before us. The Ld. AR submitted that the assessee was engaged in legal consultancy on retainer-ship basis with M/s. Rosy Blue (India) Pvt. Ltd. by virtue of an agreement with them and had returned such income under the head income from business or profession. The Ld. AR submitted that the receipt of payment from the company was as per the agreement, and the company while making the payment had deducted tax u/s. 194J and had issued Form 16A. According to the Ld. AR, the company did not seek any advice or entrusted any assignment, hence no service was provided, but that does not change the character of the agreement and nature of payment. The assessee received the fee as per the contract and he is supposed to make himself available whenever the company asks for, which is also part of the service. Further, the Ld. AR submitted that in such a....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... Being so, the Assessing Officer is precluded from changing the head of income from profession to the head of income from other sources. Further, in our opinion, for allowing the expenditure, the assessee has to fulfil the following conditions: i) The expenditure should not be of nature of capital expenditure. ii) It should not be a personal expenditure. iii) The expenditure must be laid out or expended wholly and exclusively for the purpose of business or profession of the assessee. 3.6 Now we will examine whether the assessee has fulfilled the above requirements. We have carefully gone through the provisions of section 30 to 36 of the I.T. Act. Section 30 relates to the allowability of payment like rent, rates, taxes, repairs and insurance for the premises used for the purpose of business or profession. Section 31 relates to allowability of repairs and insurance in respect of machinery, plant and furniture used for the purpose of business. Similarly, section 32 relates to allowability of depreciation on assets used in business. In the same way, while section 32A relates to investment allowance, section 32AB relates to investment deposit account. Sec....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... a retainer and the assessee being an advocate, maintains office for the purpose of his profession, the Assessing Officer is not justified in disallowing the expenditure on the reason of non rendering of services to a particular client. In our opinion when the assessee made himself ready to be available to the client and the client has not availed his services as a retainer, we do not find fault with the assessee so as to disallow the expenditure incurred by the assessee. In our opinion, the Assessing Officer did not allow the expenditure only on the presumption that the assessee has not rendered the services though the assessee has kept himself ready to render the services. In AY 2009-10 and 2010-11, there is no such disallowance. In view of this, we are not in agreement with the findings of the lower authorities. We direct the Assessing Officer to allow the above expenditure incurred by the assessee. Hence, this ground of appeal is allowed. 4. The next ground, Ground No. 3 is with regard to deposit of Rs. 2 lakhs in the assessee's Bank account. 4.1 Though the assessee has taken the plea that it has received the amount from relatives, he failed to furnish the confirmation le....
X X X X Extracts X X X X
X X X X Extracts X X X X
..../- as opening cash balance in the cash flow statement, could not be established by the assessee. The CIT(A) further observed that no details were submitted by the assessee with regard to the amount of Rs. 5,00,000/- as cash gifts received from relatives. The CIT(A) found that the assessee failed to establish the identity of the person by way of particulars of IT return etc. Hence, the CIT(A) upheld the addition made by the Assessing Officer as unexplained income of the assessee. 5.3 Against this, the assessee is in appeal before us. The Ld. AR submittd that the assessee and his wife returned from London in March 2006 with an intention to set up practice in Law in Cochin. It was submitted that the relatives of the assessee and his wife gifted some money for the purpose and in addition to the gifts received, they had cash balance with them brought in foreign currency of 1000 pounds and exchanged for Indian currency at the airport. The ld. AR submitted that it was clearly mentioned in the cash flow statement that cash gifts were received from relatives at the time of opening of the office. Hence, it was submitted that the addition of Rs. 7,50,000/- as unexplained income may be dele....
X X X X Extracts X X X X
X X X X Extracts X X X X
....annot be denied. As regards the payment of Rs. 7,27,000/-, the CIT(A) observed that the same is to be deducted from the full consideration of Rs. 16,92,000/-. According to the CIT(A), the assessee had paid only Rs. 9,65,000/- only, as over and above the documented consideration. Hence, the CIT(A) treated the unexplained investment only up to the extent of Rs. 4,82,500/- each, in the hands of the assessee as well as his wife. Accordingly, the CIT(A) modified the addition to this extent. 6.4 Against this the assessee is in appeal before us. The Ld. AR submitted that the Assessing Officer made this addition only on the basis of statement made by the seller, Shri Linjo Joseph during the cross examination that he had filed the return of income but no proof was furnished on request to make this addition, while the assessee had produced the original documents. The Ld. AR submitted that the land was not subjected to valuation and argued that the value as per the registered valuer could only be adopted. The Ld. AR submitted that a sum of Rs. 7,27,000/- was shown in the books of his wife as cost of the land and therefore, this has to be deducted to arrive at the unexplained investment. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l Mather did not present himself for cross examination before the Assessing Officer. The Ld. AR submitted that the DVO valued the land. The value disclosed by the assessee for the land was Rs. 89,34,000/-. The Ld. AR submitted that for arriving at the above figure, the DVO had taken values of 5 properties varying from Rs. 5,709/- to Rs. 1,93,543/- per cent as shown below and averaged it. It was submitted that the DVO did not consider the nature of land, road proximity, whether with house or not etc. It was submitted that the land valued at Rs. 1,93,543/- per cent and the valued at Rs. 99,310/- per cent are with houses and having PWD roads on one side. Thus the cost of 279.52 comes to Rs. 29,10,642 per cent. Document No. Land Value Extent of land 1142/07 Rs.1000/- per cent 100 cents 3311/06 Rs.18,571/- per cent 36 cents 1755/08 Rs.1,93,543/- per cent 12.91 cents Small plot with house and asphalted roads 129/08 Rs.5,079/- per cent 31.5 cents 1716/09 Rs.99,310/- per cent 7.25 cents Small plot with house and asphalted roads. The Ld. AR submitted that the value of Rs. 14,00,0....
X X X X Extracts X X X X
X X X X Extracts X X X X
....espect of the total sale consideration received at Rs. 213 lakhs as against the documented sale consideration at Rs. 30 lakhs. Accordingly, the Assessing Officer added 50% of the land value in the hands of the assessee as unexplained investment u/s. 69 of the Act. 7.2 The CIT(A) observed that even after the opportunity of cross examination, the seller had continued with the same stand. The CIT(A) found that the Shri Dandapani had already filed the return of income on 20/1/2014 wherein the computation of capital gains, the sale consideration was shown as Rs. 2.13 crores. According to the CIT(A) in a case where there is a sworn statement of the seller that the actual consideration received on sale of land is at Rs. 2.13 crores which been shown in his return of income, it is established beyond doubt that the actual sale consideration was at Rs. 213 lakhs which is over and above the amount of documented sale consideration of Rs. 30 lakhs. According to the CIT(A), even the notice received from the District Collector for suppression of stamp duty indicated that the documented value is not the true value. Therefore, the CIT(A) held the inference derived by the AO as correct and proper.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dition on the reason that the addition is based on the statement of Dr. K.K. Dandapani who is the seller of the property and the statement is not supported by any independent corroborative material. Hence, this ground of appeal of the assessee is allowed. The appeal of the assessee in ITA No. 385/Coch/2015 is allowed. 8. The next ground, Ground No. 2 is with regard to addition of unexplained investment in construction of building at Annamanada at Rs. 26,33,926/-. 8.1 The facts of the case are that the assessee had purchased land at Annamanada. The land was surveyed by Remote sensing data of satellite which gave a clear indication that in November 2009, construction of a new building was already started and in progress. This land and building was valued by the DVO and vide his valuation report, the construction investment in that building was of Rs. 67,89,000/- as on 27/03/2013. It was found that the assessee had not obtained building permit from the local authority and hence, the Assessing Officer held that by November 2009, 50% construction was already completed. Accordingly, the Assessing Officer treated the amount as unexplained investment made by the assessee. 8.2 The ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Annamanada building (55.87 sq. mtr.) is valued at Rs. 13,422 sq. mtr. while bed rooms, family living, store etc. at Keerthi Nagar are valued @ Rs. 9,965 per sq. mtr. Annamanada building is in Kadukutty Panchayat in Trichur District while Keerthi Nagar building is in Cochin Corporation. Excessive value taken by valuer thus is Rs. 6,72,051/-. (ii) Even after valuing the main building Front and Rear of 219.05 sq. mtr. (156 + 55,875 @ Rs. 13422 per sq. mtr. Valuer has again added extra Rs. 2400/- per sq. mtr. for flooring area of 211.87 sq. mtr. is Rs. 5,08,488/-. Again he has added 15% extra on main building front and rear cost amounting to 4,42,013/-,which is unheard of. Thus he has added Rs. 9,49,501/- (506488 + 441013/-) nah kd was 7.2 written submissions. (iii) Valuer has also added extra for service viz plumbing and sanitary and electrification which is usually included in the per sq. mtr. rate. He has thus added Rs. 9,81,914/- towards this. (iv) In addition, valuer has also added Rs. 10,29,220/- to extra items out of which 90% is usually get included in per sq. mtr. rate. Thus it was submitted that the building valuation was high pitched and excessi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to his mother for purchasing this land. However, Shri Sohan, the seller when examined on oath on 29/12/2010, admitted to have received Rs. 62 lakhs as sale consideration and the entire amount of Rs. 62 lakhs was received in cash. The Assessing Officer noticed that the assessee had utilized the sale consideration for purchase of property at Alungal and Thallassery and also for renovating the house at Alungal and Thalassery. Thus, the Assessing Officer treated the entire consideration paid by the assessee as undisclosed investment of the assessee and assessed u/s. 69 of I.T. Act. As the document was registered in the name of assessee's mother, the assessment would be made in her name on substantive basis and protectively made in the case of the assessee. The Rs. 5 lakhs show in the cash flow statement was reduced from total consideration of Rs. 62 lakhs. 9.2 The CIT(A) observed that the assessee's mother had never been an assessee and had never filed the IT return. Further, it was noticed that she did not have any independent source of income. The CIT(A) observed that it is only the assessee who stand as the key person in the purchase of land and suppression of the actual sale co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Adv. K.B. Sony Rs. 4,50,000/- on 07/12/2010 Adv. P.V. Sreenijin Rs. 4,50,000/- on 07/12/2010 The assessee submitted that the same is personal loan received from a friend Shri C.P. Prakash who is in abroad. The assessee was asked to prove the identity of the person, creditworthiness of the person and the genuineness of the transaction. The assessee had only given the name and address of the person. Even after repeated requests, the assessee was not able to establish the identity, creditworthiness and the genuineness of the transactions. Hence, the amount received from Shri C.P. Prakash was treated as unexplained credits and assessed u/s. 68 of the Act. 10.2 The CIT(A) observed that no confirmation letter regarding the credits as interest free personal loans was filed by the assessee. Merely because the amount was credited to the assessee's bank account, the assessee cannot discharge his onus to establish the identity, creditworthiness and genuineness of the credits. Even before the CIT(A), the assessee failed to provide any evidence to have justified the genuineness of the credits. Accordingly, the CIT(A) confirmed the addition made by the Assessing Officer u/s. 68 of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....31, 32, 36, 37, 38, 40, 40A (other than sub-section (3) and (4) thereof) 41, 43, 43A, 43B and 43C of the Income Tax Act shall so far as may be, apply accordingly. Rule 6. Where the result of the computation for previous year in respect of any source of agricultural income is a loss, such loss shall be set off against the income of the assessee, if any, for that previous year from any source of agricultural income. Rule 7. Any sum payable by the assessee on account of any tax levied by the State Government on the agricultural income shall be deducted in computing the agricultural income. Rule 11. For the purpose of computing the net agricultural income of the assessee, the Assessing Officer shall have the same powers as he has under the Income Tax Act for the purpose of assessment of the total income. According to the Assessing Officer as per the Finance Act assessee has to maintain the complete books of account, including the balance sheet, P&L a/c with all schedules and with complete evidence and net profit or the net loss shall be computed as in the case of business or profession. As the assessee had not kept any books of account for the agricultural....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d be assessed in his name. 12.1 After hearing both the parties, we are of the opinion that since we have allowed the appeal of the assessee in ITA No. 384/Coch/2015 in Ground No. 2 for the assessment year 2009-10 on the same issue, this ground raised by the Revenue has become infructuous and is dismissed as infructuous. Hence, the appeal of the Revenue in ITA No. 374/Coch/2015 is dismissed. ITA Nos. 322 to 324/Coch/2015 13. These appeals filed by the assessee are emanating from different orders of the CIT passed u/s. 263 of the I.T. Act for the assessment years 2008-09, 2009- 10 and 2010-11. ITA No. 322/Coch/2015 13.1 The CIT(A) had set aside the assessment order dated 31/03/2013 for the assessment year 2008-09 which was passed u/s. 143(3) r.w.s 148 of the Act by issuing notice u/s. 263 of the Act to the assessee by observing as follows: i) As per information available with the Department, it is seen that the assessee has purchased a land measuring 136 cents at Varapuzha during the financial year relevant to the AY 2008-09 and substantial amount was spent for the development of land. A perusal of the records shows that the AO had not examined the expenses in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y by the Assessing Officer. It was further submitted that the assessee also filed the details of drawings before the Assessing Officer. Regarding foreign travel, the Ld. AR submitted that the Assessing Officer made the addition of Rs. 60,000/- after due verification and this was disputed by the assessee who went in appeal before the CIT(A) and the CIT(A) deleted the addition. Now the CIT cannot take up the issue which was the subject matter of appeal before the CIT(A). The Ld. AR referred to section 263(1) and Explanation (c) of the I.T. Act. Further, it was submitted that the assessee incurred an expenditure of Rs. 8,22,455/- towards earning of professional income and out of this, the assessee himself disallowed Rs. 49,736/-. According to the Ld. AR, the reasonability of allowability of expenditure cannot be questioned without possession of any material in his hands to suggest disallowance of the same. According to him, the direction given by him was only a surmise and conjuncture and not based on any material in his hands. The finding of the CIT is only on the reason that he was not satisfied with the conclusion reached by the Assessing Officer by passing the impugned assessment ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lowance of various expenditure, the CIT is not justified in exercising his power u/s. 263 of the I.T. Act. Further, the issue considered by the CIT with regard to foreign travel expenditure was the subject matter of appeal before the CIT(A) and in view of section 263(1) and Explanation (c) of the I.T. Act, the CIT cannot invoke the jurisdiction u/s. 263 of the Act. Regarding drawings also, all the material relating to the issue was available with the Assessing Officer and he has taken one possible view and in that view, the CIT cannot interfere with. It cannot be said that the Assessing Officer has taken the view in vacuum and it is a judicial view. The Assessing Officer being a quasi- judicial authority, has taken one possible view. The CIT has not agreed with that view, he wants to substitute his view without bringing in any new material to suggest disallowance of expenditure. In these circumstances, we are of the view that since the Assessing Officer has taken a judicial view consciously based on proper enquiry and appreciation of the relevant facts and legal aspects of the case, the judicial view taken by the Assessing Officer placed the matter outside the purview of sec. 263 o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....perties namely Annamanada property and Keerthynagar property and also not verified details of bank loans availed for construction of building at these properties. ii) In respect of the tournament conducted by the Football Club, the quantum of expenditure such as Coach's salary, rent for the ground, expenses for travelling, food, etc. incurred by the assessee for sponsoring the tournament and its source had not been verified. iii) Personal expenditure in respect of visit with family to Malaysia for 4 days and Maldives had not been examined. iv) Agricultural income of Rs. 2,00,000/- had not been considered in the computation of income. 15. As discussed in the earlier appeal in ITA No. 322/Coch/2015 in para nos. 13.4 and 13.5 of this order, we are inclined to quash the order of the CIT passed u/s. 263 of the Act. Hence, the appeal of the assessee in ITA No. 324/Coch/2015 is allowed. ITA No. 319 to 321/Coch/2015 :Smt K.B. Sony 16. These appeals filed by the assessee are emanating from different orders of the CIT passed u/s. 263 of the I.T. Act for the assessment years 2008-09, 2009- 10 and 2010-11. ITA No. 319/Coch/2015 16.1 The CIT(A) had s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he assessee in ITA No. 320/Coch/2015 is allowed. ITA No. 321/Coch/2015 18. The CIT(A) had set aside the assessment order dated 31/03/2013 for the assessment year 2010-11 which was passed u/s. 143(3) r.w.s 148 of the Act by issuing notice u/s. 263 of the Act to the assessee by observing as follows: i) A perusal of the records and information available with the Department, it is seen that the Assessing Officer had not estimated the undisclosed expenditure of land filling at Varapuzha. ii) Personal expenditure in respect of visit to Malaysia for 4 days and visit to Maldives with family had not been examined. 18.1. As discussed in the earlier appeal in ITA No. 322/Coch/2015 in para nos. 13.4 and 13.5 of this order, we are inclined to quash the order of the CIT passed u/s. 263 of the Act. Hence, the appeal of the assessee in ITA No. 321/Coch/2015 is allowed. ITA Nos. 387 to 390/Coch/2015 : Smt. K.B. Sony 19. The first ground, Ground No. 1 in ITA No. 387/Coch/2015 is with regard to unexplained investment in purchase of flat at Travancore Residency for Rs. 4 lakhs. 19.1 The facts of the case are that the Smt. K.B. Sony purchased a flat at Travancore ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d the addition made by the Assessing Officer u/s. 69C for the amount of surplus money paid for a sum of Rs. 4 lakhs for the purchase of the flat. 19.3 Against this, the assessee is in appeal before us. The Ld. AR submitted that the sworn statement of Shri Martin Jose should not be treated as evidence for making the addition of Rs. 4 lakhs as unexplained investment in the purchase of flat in Travancore Residency. The Ld. AR submitted that in the cross examination, Shri Martin Jose had stated that he had not received any notice from the Income Tax Department and in reply to the question whether he had shown Rs. 10 lakhs in his return of income, he replied that he had shown only Rs. 6 lakhs in his return of income. In view of this, the Ld. AR submitted that the addition of Rs. 4 lakhs may be deleted. The Ld. AR relied on the judgments as in the case of Shri P.V. Sreenijin for the assessment year 2007-08. 19.4 We have heard the rival submissions and perused the record. As discussed in ITA No. 383/Coch/2015 in para nos. 2.4 and 2.5 of this order for the assessment year 2007-08 in the case of Shri P.V. Sreenijin, the Assessing Officer made the addition only on the basis of statemen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2009, the assessee had sold the car on 26/08/2009 for Rs. 2,90,000/- The Ld. AR submitted that the assessee had asked the company whether she can adjust the amount towards retainership fee and on 31/05/2011, the company asked the assessee to send the sale proceeds to them. Consequently, the assessee's husband Shri P.V. Sreenijin sent a cheque for Rs. 2,90,000/- from his ICICI Bank Account No. 626401511572 to M/s. Rosy Blue (India) Pvt. Ltd. It was submitted that since the cost of the car was paid by the company and sale proceeds of the car was taken by the company, the addition of Rs. 5,48,513/- made in the hands of the assessee, may be deleted. 21.4 The Ld. DR relied on the order of the lower authorities. 21.5 We have heard the rival contentions and perused the record. In this case the payment towards purchase of car was paid by M/s. Rosy Blue (India) Pvt. Ltd., though the registration was in the name of the assessee as per the valid agreement. On the basis of the agreement dated 30/06/2009, the assessee sold the car at Rs. 2,90,000/- and the amount was repaid to M/s. Rose Blue India Pvt. Ltd. This fact was not at all disputed by the lower authorities. According to the Ld. D....
X X X X Extracts X X X X
X X X X Extracts X X X X
....wance of depreciation on motor car at Rs. 2,22,644/-. 24.1 The facts of the case are that during the year the assessee had purchased a car and claimed depreciation at 50%. The assessee was requested to submit the explanation why the depreciation shall not be restricted to 15% as per the rule. The assessee has submitted the explanation as follows:- "As per the Income Tax Rules, 1962 provide depreciation @ 50% for new commercial vehicle which is acquired on or after the first day of January, 2009 but before the first day of October, 2009 and is put to use before the first day of October, 2009 for the purpose of business or profession. Commercial vehicle includes light motor vehicle also. I have bought Corolla Altis on 4-9- 2009 and used it before first day of October 2009 for the purpose of my profession. So I claimed depreciation @ 50%." According to the Assessing Officer, 50% depreciation is available only for the commercial vehicles. The commercial vehicles are different from the personal vehicles which are meant for personal use. The State Government charges higher taxes on commercial vehicles and the Registration Certificate itself indicate whether the vehicle is ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the 1st day of October, 2009 for the purpose of business or profession'. Commercial vehicle includes light motor vehicle also. It was submitted that the assessee had bought Corolla Altis on 4-9-09 and used it before 1st day of October 2009 for the purpose of my profession . So heclaimed depreciation @ 50%. Therefore, it was clear that the assessee is entitled for depreciation @ 50% which was given as an incentive for a short period between 01/01/2009 to 01/04/2009 but the period was later on extended up to 01/10/2009. The Ld. AR submitted that the vehicle purchased by the assessee fulfills all the conditions prescribed in the Income Tax Act and the related Motor Vehicle Act and falls within the definition of Commercial Vehicle. According to the Ld. AR, the Act has nowhere prescribed that a commercial vehicle should be a vehicle which is used for the purpose of hire. It only prescribes that the vehicle should be used for the purpose of business or profession. The Ld. AR submitted that the assessee is, therefore, entitled for the depreciation @50%. Hence it was prayed to drop the disallowance of excess depreciation claimed of Rs. 2,22 644/-. 24.3.1 The Ld. AR submitted that t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r depreciation at 50% on the car in view of the Income Tax(Third amendment) Rules, 2009 wherein new commercial vehicle which is acquired on or after 1st October, 2009 for the purpose of business or profession of the assessee is entitled for higher depreciation of 50% which is as follows: "(via) New commercial vehicle which is acquired on or after the 1st day of January, 2009 but before the 1st day of October 2009 and is put to use before the 1st day of October 2009 for the purposes of business or profession." The period of acquisition of commercial vehicle on or after 1st June, 2009 or on or before October, 2009 was amended as per the amended provisions with effect from 1.4.2009. Being so, commercial vehicle purchased upto October, 2009 is entitled for higher depreciation. Hence, we direct the Assessing Officer to grant depreciation at the rate of 50% on the commercial vehicle acquired by the assessee. Thus, this ground of appeal of the assessee is allowed. 24.6 The next issue is with regard to addition made towards loan received from C.P. Prakash for Rs. 4,50,000/-. The assessee received loan from Shri C.P. Prakash on 02/12/2010 vide Cheque No. 392458 drawn for Rs. ....