2018 (6) TMI 1815

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....s)-XVIII is based on conjectures, surmises, incorrect application of law and erroneous assumptions and is hence liable to be quashed. 2. That the CIT(A) has grossly erred in facts and law by upholding the order of the Deputy Commissioner of Income Tax - Circle 15(1), New Delhi, in disallowing part of the monthly lease rentals [being 'principal repayment component embedded in lease rentals'] amounting to Rs. 17,66,631/- during the previous year under consideration alleging that such payment is towards acquisition of capital asset and accordingly, is an expenditure of capital nature. 2.1Without prejudice to the above ground, the CIT(A) has erred in denying the alternative claim of the assessee of allowing depreciation u/s 32....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....tive Plan (MCCP) was unveiled. Accordingly, the corporate tax return was revised on 19.02.2009 to consider the additional fringe benefit tax liability on shares issued under MCCP. The assessee incurred a loss of Rs. 5,61,11,178/- in the subject year. Accordingly, tax due on return income was declared Nil. However, TDS amounting to Rs. 5,47,619/- was deducted at source from income of the assessee during the subject year. Accordingly, refund of Rs. 5,47,619/- was claimed in the return of income. Subsequently, assessment proceedings were initiated against the assessee. A notice, dated 08.08.2011, was issued under section 143(2) of the Act and a questionnaire along with it was issued u/s 142(1) of the Act. In response to the above questionnaire....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... Further, the assessee did not claim any depreciation u/s 32 of the Income Tax Act, 1961 in respect of the vehicles taken by the lessee under the finance lease agreement. Accordingly, an amount of Rs. 17,66,631/- was paid towards repayment of principal was reduced by computing taxable income of the assessee. The Ld. AR further submitted that the assessee did not capitalized such vehicles in the tax depreciation schedule and no tax depreciation was claimed in this regard. The Ld. AR relied upon the following decisions: i. IndusInd Bank Ltd. vs. Add. CIT (2012) 15 ITR (T) 89 (Mum) ii. CIT vs. Amway India Enterprises (2012) 346 ITR 341 (Del. HC) 5. As relates to ground no. 3 the Ld. AR submitted that during the assessment ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....tted that earlier bench has not considered the decision of the Special Bench in case of IndusInd Bank Ltd. (supra) as well as the decisions of varius High Court which are directly on this issue. It is the submission of the Ld. AR that either the assessee be allowed to claim depreciation or to allow lease rentals as revenue expenditure. We therefore, deem it proper to restore this issue to the file of the Assessing Officer with direction to adjudicate this issue a fresh in light of the decision in case of IndusInd Bank Ltd. (supra) and accordance with law. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice. Thus, Ground No. 2 and 2.1 are partly allowed for statistical purpose. 8. As re....