Income Tax Appellate Tribunal - Ahmedabad
Amtex Dye Chem Industries, Ahmedabad vs Department Of Income Tax
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IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD BENCH "D" AHMEDABAD
Before S/Shri Mahavir Singh, JM and D.C.Agrawal, AM
ITA No.1957/Ahd/2010
Asst. Year :2006-07
Asstt. CIT, Circle-6, Vs. M/s Amtex Dye Chem
Ahmedabad Industries, Plot No.281-282,
Phase-II, GIDC Estate,
Vatva
(Appellant) (Respondent)
..
Appellant by :- Shri A. K. Tiwari, DR
Respondent by:- Shri K. C. thakkar, AR
ORDER
Per D.C. Agrawal, Accountant Member.
This is an appeal filed by the Revenue raising following grounds :-
(1) The ld. CIT(A)-XVI, Ahmedabad has erred in law and on facts in deleting the addition made of Rs.92,686/- on account of deduction interest u/s 40A(2)(b).
(2) The ld. CIT(A)-XVI, Ahmedabad has erred in law and on facts in deleting the addition made on account of depreciation on car for Rs.6,06,331/-.
(3) On the facts and in the circumstances of the case, the ld.
CIT(A)-XVI, Ahmedabad ought to have upheld the order of the AO.
2. The facts of the case are that assessee is manufacturer of S.O. dues and chemicals having local sales and export sales.
3. Regarding the first issue the facts are that from the audit report the AO noticed that assessee has made the payment of interest @ 15% to the persons who are covered under section 40A(2)(b) whereas it has made payment of interest @ 12% to others. According to the AO this extra payment of interest is unreasonable and is not at par with market rate. As the assessee was not able to explain satisfactorily and justify the reasons for the difference, the AO proposed an addition of excess interest working out at Rs.92,686/- under section 40A(2)(b).
4. The ld. CIT(A) deleted the addition by holding that payment @ 15% is not excessive, after considering the prevailing interest rate of bank over-draft account which varied between 15% and 16%. Similar decision he has taken in earlier years.
5. We have considered the rival submissions and perused the material on record. In our considered view there is no case for interference in the order of ld. CIT(A). The Revenue has not challenged that the bank interest is not 15% - 16% and that the order of ld. CIT(A) in earlier year has not been accepted. In absence of any material to the contrary we uphold the order of ld. CIT(A) on this issue. This ground of Revenue is rejected.
6. The next issue is about deletion of disallowance of depreciation by AO on cars on the ground that cars were not registered in the name of the firm but they were registered in the names of partners. By following the decision of Hon. Supreme Court in the case of Mysore Minerals Ltd. vs. CIT (1999) 239 ITR 775 (SC), decision of Hon. Kerala High Court in the case of CIT vs. Nidish Transport Corporation (1990) 185 ITR 669 (Ker) and that of Hon. Delhi High Court in CIT vs. Basti Sugar Mills Co. Ltd. (2002) 257 ITR 88 (Del), the ld. CIT(A) allowed the claim.
27. We have heard the parties and carefully perused the material on record. In our considered view the issue is covered by the decision of Hon. Supreme Court in the case of Mysore Minerals Ltd. vs. CIT (supra) and other two decisions as referred to by the ld. CIT(A) in his order. Once it is shown as a fact that the cars were used by the firm in its business even though registered in the names of partners then the assessee is entitled for depreciation thereon. As a result, this ground of Revenue is rejected.
8. In the result, the appeal of the Revenue is dismissed.
Order was pronounced in open Court on 15/10/10.
Sd/- Sd/-
(Mahavir Singh) (D.C. Agrawal)
Judicial Member Accountant Member
Ahmedabad,
Dated : 15/10/10.
Mahata/-
Copy of the Order forwarded to:-
1. The Assessee.
2. The Revenue.
3. The CIT(Appeals)-
4. The CIT concerns.
5. The DR, ITAT, Ahmedabad
6. Guard File.
BY ORDER,
Deputy/Asstt.Registrar
ITAT, Ahmedabad
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1.Date of dictation 1/10/2010.
2.Date on which the typed draft is placed before the Dictating 11/10/2010 Member................Other Member................
3.Date on which the approved draft comes to the Sr.P.S./P.S.............
4.Date on which the fair order is placed before the Dictating Member for pronouncement..............
5.Date on which the fair order comes back to the Sr.P.S./P.S...............
6.Date on which the file goes to the Bench Clerk...........
7.Date on which the file goes to the Head Clerk.............
8.The date on which the file goes to the Asstt. Registrar for signature on the order........................
9.Date of Despatch of the Order.................
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