TaxTMI 
TaxTMI 
2023 (4) TMI 684
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....ppreciating the submission made by the appellant and has not appreciated the factual matrix of the case and applicable legal position and therefore the order passed by the learned assessing officer and learned Commissioner of Income Tax (Appeals)-3 deserves to be quashed and set aside in the interest of justice. 4. The appellant submits that the assessing officer and the Commissioner of Income Tax (Appeals)-3 has failed to appreciate the legal position as held by the Hon'ble Supreme Court of India in the case of Mysore Minerals and other legal precedents also in the case of the assessee for the assessment year 2013-14 in which the depreciation of the same assets has been allowed by the Commissioner of Income Tax (Appeals)-3m Baroda. The beneficial ownership of the assets lies with the appellant and therefore, depreciation ought to have been allowed 5. The appellant submits that the direction given to the assessing officer for verification of labour expenses is totally unwarranted for as it was verified at the time of assessment proceedings. The assessing officer has arbitrarily made addition of 5% on whims for correctness of vouchers. Therefore, the addition may please be dro....
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....Court in suo moto writ petition No. 3/2020 and the Bench may take decision in accordance with law. 4. I have considered the submissions of both the parties and find that the impugned order was passed on 14/07/2020. Admittedly, at the time of passing the impugned order, there was severe Covid-19 Pandemic. Considering the submissions of both the parties and the fact that the period during which the present appeal was filed is covered by the decision of Hon'ble Supreme Court in Suo Moto Writ Petition No. 3/2020 dated 10/01/2022, therefore, the delay is filing the appeal is condoned. Now adverting to the merits of the case, 5. Brief facts of the case are that the assessee is a proprietor of M/s Das Fabrication engaged in the business of fabrication work, labour supply for load and unloading of coal and salt on hiring. The assessee while filing the return of income offered income from house property, business income and income from other sources. The assessee declared his income in the return of income of Rs. 21,79,820/- which was filed on 30/11/2014 for the A.Y. 2014-15. The case was selected for scrutiny. During the assessment, the Assessing Officer besides other additions/disallowa....
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....claiming depreciation, it is not necessary that the assessee must be registered owner of the asset. There are certain other qualities of rights which gives the holder a virtual ownership of assets. Exclusive possession rights, to exclude others from enjoyment of assets, full control over the assets, rights to retain possession and defend the same but some of the characteristics of ownership which will entitle a person to claim benefit of depreciation if the asset is used for the purpose of carrying on a business. The assessee relied on certain case laws. 8. The ld. CIT(A) after considering the submission of assessee, upheld he disallowance of depreciation by holding that for claiming depreciation, the ownership of the asset is fundamental criteria which needs to be fulfilled. In this case, the vehicle is in the name of person who is not the assessee. The assessee relied on various case laws and tried to argue that beneficial ownership of the particular asset lied with the assessee and therefore, the depreciation is allowable. The ld. CIT(A) distinguished all the case laws and upheld the disallowance. 9. On 5% of disallowance of labour expenses, the assessee submitted that the Ass....
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....as per my direction, filed his written submission comprising only on the disallowance of depreciation of vehicle and addition on account of labour expenses. Thus, precisely the facts leading to such additions are recorded above. 12. Ground No. 1 of the appeal relates to addition/disallowance of depreciation on vehicle. The ld. AR of the assessee submits that the Assessing Officer made disallowance of depreciation on vehicle by holding that the vehicle is not owned by the assessee. The ld. AR submits that on similar disallowance, the ld. CIT(A) in A.Y. 2013-14, allowed similar depreciation. Copy of order of ld. CIT(A) for A.Y. 2013-14 dated 01/03/2018 is placed on record. The ld. AR further submits that as per following decisions, he is eligible for depreciation. To support his submissions the ld AR for the assessee also relied on the following decisions; (i) Mysore Minerals Limited Vs CIT (ii) CIT Vs Mohammad Bux Shokat Ali (iii) CIT Vs Aravali Finlease Limited (iv) ITO Vs Electro Ferro Alloys Limited (v) CIT Vs Basti Sugar Mills Co Ltd. (2002) 257 ITR 88 (Delhi). 13. On the other hand, the ld. Sr. DR for the revenue supported the orders of lower authorities. The ld. Sr....
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....hough he is a son. Thus, none of the ratio of case law is applicable on the facts of present case. 16. In the result, ground of appeal related to disallowance of depreciation of vehicle is dismissed. 17. Next ground of appeal relates to addition on account of 5% of labour expenses. The ld. AR of the assessee submits that the Assessing Officer made addition of labour expenses for want of verification. The books of assessee is duly audited by a qualified Chartered Accountant under the provisions of Section 44AB of the Act. Tax audit has also been carried out. The tax audit report has not been disputed by the Assessing Officer. It is settled position in law that when books of account are audited then books cannot be rejected. The business of assessee is a labour oriented and cash payment is made to the labourers. The expenses were incurred wholly and exclusively for the purpose of business. The payment of labour is 34% of the total turnover. To support his submission, the ld. AR of the assessee relied on the decision of PCIT Vs R.G. Buildwel Engineers Limited. The ld. AR submits that in the A.Y. 2013-14, the ad hoc addition on account of labour expenses was made. However, the same w....