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× Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India

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01-03-2019, Gold Finch Jewellery, Section 194C, 14A, Tribunal Ahmedabad

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2 months 2 weeks ago #8721 by amit
Section - 194C, 14A, 8D
Order Date - 01-03-2019
Favouring - Assessee
Court - Tribunal Ahmedabad
Appellant - Gold Finch Jewellery Ltd.
Respondent - DCIT
Citation - 219Taxpundit151
Appeal No. - ITA Nos.1075-1076/AHD/2016
Asstt. Year - 2009-2010 & 2012-2013



The captioned appeals have been filed at the instance of the Assessee against the separate order of the Commissioner of Income Tax (Appeals)- 2, Ahmedabad[CIT(A) in short] of dated 24/02/2016 and 26/02/2016 arising in the matter of assessment order passed under s.143(3)of the Income Tax Act, 1961 (here-in-after referred to as "the Act") dated 22/12/2011 and 02/03/2015 relevant to assessment Years 2009-10 & 2012-13 respectively.

2. Since the issues raised in both the appeals are common and related to the same assessee, therefore, we proceed to adjudicate the same through this common order for the sake of convenience and brevity.

3. First, we take ITA No.1075/Ahd/2016 for A.Y- 2009-10. The assessee has raised the following grounds of appeal.

1. The Ld.CIT (A) has erred in confirming the disallowance of Rs. 1,61,739/- made by the Assessing Officer out of depreciation on two wheeler vehicles and Car.

2. The Ld.CIT (A) has erred in confirming disallowance of Rs. 13,45,356/- made by the Assessing out of labour charges claimed by the Appellant.

3. The appellant craves leave to add, alter, amend or modify any of the grounds of appeal on or before the date of hearing of appeal.

4. The 1st issue raised by the assessee is that the earned CIT (A) erred in confirming the addition of Rs. 1,61,739/- on account of depreciation.

5. Briefly stated facts are that assessee is a limited company and engaged in the business of trading and manufacturing of gold and diamonds ornaments. The assessee has claimed depreciation in respect of certain vehicles which were registered in the name of Directors. The assessee claimed that it is the beneficial owner of the asset. The assessee further claimed that these assets were used only and exclusively for the business. Therefore, no adverse inference can be drawn against the assessee merely on the ground that these fixed assets were not registered in the name of the company.

5. However, the AO found that some of the two-wheelers were purchased in the assessment year 2005-06 in respect of which the depreciation was disallowed in the assessment order framed u/s 143(3)/147 of the Act vide dated 28/12/2010.

5.1 The assessee could not substantiate its claim that these vehicles were used for the business. Therefore the AO disallowed the depreciation of Rs. 1,61,739/- and added to the total income of the assessee

5.2 Aggrieved assessee preferred an appeal to ld. CIT(A). The assessee before the ld. CIT (A) submitted that the ld. CIT-A decided the issue pertaining to the assessment year 2005-06 in favour of the assessee. Therefore, the AO erred in rejecting the claim of the assessee after having a reliance on the order of his predecessor pertaining to the assessment year 2005-06.

6. However, the ld. CIT (A) rejected the claim of the assessee by observing that there was no evidence available to demonstrate that the vehicle used for the business.

7. Being aggrieved by the order of ld. CIT (A) assessee is in appeal before us.

8. The ld. AR before us filed a paper book running from pages 1 to 136 and submitted that the assessee was the beneficial owner of the asset as the assessee made the payment for the acquision of such assets. Thus the benefit of depreciation cannot be denied merely on the ground that the ownership is in the name of Director/employee of the Company.

8.1 The ld. AR fu ther submitted that the assessee had claimed interest on the car loan, insurance premium of the car, petrol expenses on the scooter and car and vehicle expenses which were not doubted by the Revenue.

8.2 The ld. AR further submitted that the Revenue had taken the contrary stand by allowing the expenses incurred in connection with the vehicle in full. Therefore, the depreciation in respect of such vehicle was disallowed on the basis of mere conjecture and surmises.

9. On the other hand ld. DR relied on the order of the authorities below.

10. We have heard the rival contentions and perused the materials available on record. In the instant case, the depreciation claimed on the vehicles, i.e. cars and

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