Income Tax Appellate Tribunal - Chennai
V.Pandarinathan, Salem vs Assessee on 29 May, 2015
आयकर अपील
य अ धकरण, 'डी' यायपीठ, चे नई
IN THE INCOME TAX APPELLATE TRIBUNAL
"D" BENCH, CHENNAI
ी एन.आर.एस. गणेशन, या यक सद य एवं
ी ए. मोहन अलंकामणी, लेखा सद य केसम&
BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND
SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER
आयकर अपील सं./ITA Nos.336 & 337/Mds/2015
नधा(रण वष( / Assessment Years : 2008-09 & 2010-11
Shri V. Pandarinathan, The Income Tax Officer,
No.1, Bharathiyar Street, v. Ward I(3),
Subramania Nagar, The Assistant Commissioner
Salem - 636 005. of Income Tax, Circle I(2),
Salem.
PAN : AEAPP 2538 Q
(अपीलाथ,/Appellant) (-.यथ,/Respondents)
अपीलाथ, क/ ओर से/Appellant by : Sh.T.S.Lakshmi Venkataraman, CA
-.यथ, क/ ओर से/Respondents by : Sh. N. Madhavan, JCIT
सन
ु वाई क/ तार
ख/Date of Hearing : 12.05.2015
घोषणा क/ तार
ख/Date of Pronouncement : 29.05.2015
आदे श /O R D E R
PER N.R.S. GANESAN, JUDICIAL MEMBER:
Both the appeals of the assessee are directed against the different orders of the Commissioner of Income Tax (Appeals), Salem, pertaining to assessment years 2008-09 and 2010-11.
First, let's take I.T.A. No.336/Mds15.
2 I.T.A. Nos.336 & 337/Mds/15
2. The only issue arises for consideration in this appeal is with regard to disallowance made by the Assessing Officer under Section 14A of the Income-tax Act, 1961 (in short 'the Act') to the extent of `2,38,765/- in a proceeding under Section 154 of the Act.
3. Shri T.S. Lakshmi Venkatraman, the Ld. representative for the assessee, submitted that the Assessing Officer disallowed a sum of `2,38,765/- under Section 14A of the Act in exercise of his jurisdiction under Section 154 of the Act. According to the Ld. representative, proceeding under Section 154 of the Act could be initiated only for the purpose of rectifying error which is apparent on the face of the record. According to the Ld. representative, the issue arises for consideration is a debatable one, therefore, it is not subject to rectification under Section 154 of the Act. According to the Ld. representative, disallowance under Section 14A needs to be examined in detail in regular course of assessment. Therefore, disallowing the claim of the assessee in a proceeding under Section 154 of the Act is not justified.
4. On the contrary, Shri N. Madhavan, the Ld. Departmental Representative, submitted that Section 154 enables the Assessing Officer to rectify an error apparent on the face of the record. In that process, the Assessing Officer has amended the order passed 3 I.T.A. Nos.336 & 337/Mds/15 under the provisions of Income-tax Act. According to the Ld. D.R., in this case, what was rectified is only an arithmetical error which crept in the order. The Ld. D.R. submitted that on the basis of material already available on record, the Assessing Officer rectified the arithmetical error which crept. Therefore, it is not a debatable issue. Hence, the Assessing Officer has rightly disallowed the claim of the assessee.
5. We have considered the rival submissions on either side and perused the relevant material on record. Though the assessee claims that the issue of disallowance under Section 14A of the Act is a debatable one, from the orders of the lower authorities it appears that the Assessing Officer has rectified the arithmetical error while disallowing the claim of the assessee under Section 14A of the Act. What was disallowed by the Assessing Officer is the proportionate expenses on the investments which earned tax-free income. Since the Assessing Officer has rectified the arithmetical error and when this was done after giving reasonable opportunity to the assessee, this Tribunal is of the considered opinion that the Assessing Officer has rightly rectified the mistake in the assessment order on the basis of the material already available on record. 4 I.T.A. Nos.336 & 337/Mds/15
6. In view of the above, we do not find any infirmity in the order of the CIT(Appeals). Accordingly, the same is confirmed.
Now let's take I.T.A. No.337/Mds/15.
7. The first issue arises for consideration in this appeal is with regard to disallowance of `1,55,100/- paid as machine hire charges under Section 40(a)(ia) of the Act.
8. Shri T.S. Lakshmi Venkatraman, the Ld. representative for the assessee, submitted that the assessee paid machine hire charges. However, the Assessing Officer disallowed the hire charges on account of non-deduction of tax. According to the Ld. representative, the entire hire charges were paid on or before 31.03.2010 and nothing remained to be payable. The Ld. representative placing reliance on the decision of this Bench of the Tribunal in ITO v. Theekathir Press in I.T.A. No.2076/Mds/2012 dated 18.09.2013, submitted that this Bench of the Tribunal, by following the judgment of Allahabad High Court in CIT v. Vector Shipping Services (P) Ltd. (357 ITR 642) and the decision of Special Bench of this Tribunal in Merilyn Shipping and Transport v. ACIT (2012) 16 ITR (Trib.) 1 (SB), allowed the claim of the assessee. Therefore, according to the Ld. representative, the 5 I.T.A. Nos.336 & 337/Mds/15 disallowance made by the Assessing Officer under Section 40(a)(ia) of the Act is not justified.
9. Alternatively, the Ld. representative submitted that Section 40 starts with non obstante clause which says that notwithstanding anything to the contrary in Sections 30 to 38, the amounts shall not be deducted in computing the income chargeable to tax under the head "Profits and gains of business or profession". According to the Ld. representative, Sections 30 to 38 do not refer the payment of hire charges on machine. According to the Ld. representative, the payment of hire charges on machine would fall under Section 28 of the Act, therefore, the payment of hire charges on machine does not fall under Section 40 of the Act. Therefore, according to the Ld. representative, the disallowance made under Section 40(a)(ia) of the Act is totally contrary to the provisions of Section 40(a)(ia) of the Act.
10. On the contrary, Shri N. Madhavan, the Ld. Departmental Representative submitted that Gujarat High Court and Caulcutta High Court specifically held that the decision of Special Bench of this Tribunal in Merilyn Shipping and Transport v. ACIT (2012) 16 ITR (Trib.) 1 (SB) is not a good law. The Allahabad High Court had no occasion to consider the correctness of the decision of the 6 I.T.A. Nos.336 & 337/Mds/15 Special Bench. However, it made only a passing reference. Therefore, the judgment of Allahabad High Court is per incuriam. Hence, it is not binding on this Tribunal The SLP filed by the Revenue was dismissed at the admission stage. Therefore, the Apex Court has not laid down any law on the subject. According to the Ld. D.R., the law laid down by Gujarat High Court and Calcutta High Court holds the field as of now. Therefore, it has to be followed.
11. We have considered the rival submissions on either side and perused the relevant material on record. The first contention of the assessee is that the assessee had already paid on or before 31.03.2010 and nothing remained to be paid. The Ld. representative placed reliance on the judgment of Allahabad High Court in Vector Shipping Services (P) Ltd. (supra) and on the decision of this Bench of the Tribunal in Theekathir Press (supra). We have carefully gone through the judgment of Allahabad High Court in Vector Shipping Services (P) Ltd. (supra). The Allahabad High Court, while considering the decision of the Special Bench of this Tribunal in Merilyn Shipping and Transport (supra), made a passing reference about the decision taken by the Special Bench of this Tribunal. The Allahabad High Court had no occasion to 7 I.T.A. Nos.336 & 337/Mds/15 examine the legality and otherwise of the Special Bench of this Tribunal. We find that that Calcutta High Court in CIT v. Crescent Export Syndicates and Gujarat High Court in CIT v. Sikandarkhan N. Tunvar had an occasion to examine the legality or otherwise of the decision of the Special Bench of this Tribunal. The Calcutta High Court and the Gujarat High Court have examined the matter in detail and found that the decision of the Special Bench of this Tribunal is not sustainable in law. However, the Allahabad High Court by way of passing reference decided the matter in favour of the assessee. The Special Leave Petition filed by the Revenue against the judgment of Allahabad High Court in Vector Shipping Services (P) Ltd. (supra) was rejected by the Apex Court at the admission state. Therefore, the Apex Court has not laid down any law. In other words, mere dismissal of the Special Leave Petition by the Apex Court at the admission stage does not amount to laying down any law on the elaborate judgments on the ground Calcutta High Court and Gujarat High Court available on the same subject. On identical circumstances, the Cochin Bench of this Tribunal in Thomas George Muthoot v. ACIT in I.T.A. No.63 & 64/Coch/2014 had an occasion to consider an identical issue. The Cochin Bench has observed as follows:-
8 I.T.A. Nos.336 & 337/Mds/15
"12. We have also carefully gone through the judgment of the Allahabad High Court in CIT vs M/s Vector Shipping Services (P) Ltd (supra), copy of which is filed by the assessee. The Allahabad High Court, after reproducing the relevant paragraph from the order of CIT(A) and referring to the decision of the Special Bench of this Tribunal in Merilyin Shipping & Transports (supra) found that the Tribunal has not committed an error. It is obvious that there is no discussion about the correctness or otherwise of the decision rendered by the Special Bench of this Tribunal in Merilyn Shipping & Transports (supra). However, we find that the Gujarat High Court in the case of CIT vs Sikandarkhan N Tunvar ITA Nos 905 of 2012, 709 & 710 of 2012, 333 of 2013, 832 of 2012, 857 of 2012, 894 of 2012, 928 of 2012, 12 of 2013, 51 of 2013, 58 of 2013 and 218 of 2013 judgment dated 02-05-2013 considered the decision of the Special Bench of this Tribunal in Merilyn Shipping & Transports (supra) and specifically disagreed with the principles laid down by the Special of this Tribunal in Merilyn Shipping & Transports (supra). The Calcutta High Court also in the case of Crescent Exports Syndicate & Another in ITAT 20 of 2013 and GA 190 of 2013 judgment dated 03-04-2013 considered elaborately the judgment of the Special Bench of this Tribunal in Merilyn Shipping & Transports (supra) and found that the decision rendered by the Special Bench of this Tribunal is not the correct law. It is well settled principles of law that when different High Courts expressed different opinions on a point of law, then, normally, the benefit of doubt under the taxation law would go to the assessee. It is also equally settled principles of law that the judgment which discusses the point in issue elaborately and gives an elaborate reasoning has to be preferred when compared to the judgment which has no reasoning and discussion. Admittedly, the Calcutta High Court and Gujarat High Court have discussed the issue elaborately and the specific reasoning has also been recorded as to why the Special Bench is not correct. Therefore, this Tribunal is of the considered opinion that the judgments of the Calcutta High Court Crescent Exports Syndicate & Another (supra) and Gujarat High Court in Sikandarkhan N Tunvar (supra) have to be preferred when compared to the Allahabad High Court in M/s Vector Shipping Services (P) Ltd (supra).
13. For the purpose of convenience we reproducing below the observations made by the Calcutta High Court in Crescent Exports Syndicate & Another (supra) and Gujarat High Court in Sikandarkhan N Tunvar (supra):
Calcutta High Court in Crescent Exports Syndicate & Another (supra) "Before dealing with the submissions of the learned Counsel appearing for the assessees in both the 9 I.T.A. Nos.336 & 337/Mds/15 appeals we have to examine the correctness of the majority views in the case of Merilyn Shipping.
We already have quoted extensively both the majority and the minority views expressed in the aforesaid case. The main thrust of the majority view is based on the fact "that the Legislature has replaced the expression "amounts credited or paid" with the expression 'payable' in the final enactment.
Comparison between the pre-amendment and post amendment law is permissible for the purpose of ascertaining the mischief sought to be remedied or the object sought to be achieved by an amendment. This is precisely what was done by the Apex Court in the case of CIT Vs. Kelvinator reported in 2010(2) SCC 723. But the same comparison between the draft and the enacted law is not permissible. Nor can the draft or the bill be used for the purpose of regulating the meaning and purport of the enacted law. It is the finally enacted law which is the will of the legislature.
The Learned Tribunal fell into an error in not realizing this aspect of the matter.
The Learned Tribunal held "that where language is clear the intention of the legislature is to be gathered from the language used". Having held so, it was not open to seek to interpret the section on the basis of any comparison between the draft and the section actually enacted nor was it open to speculate as to the effect of the so-called representations made by the professional bodies.
The Learned Tribunal held that "Section 40(a)(ia) of the Act creates a legal fiction by virtue of which even the genuine and admissible expenses claimed by an assessee under the head "income from business and profession": if the assessee does not deduct TDS on such expenses are disallowed".
Having held so was it open to the Tribunal to seek to justify that "this fiction cannot be extended any further and, therefore, cannot be invoked by Assessing Officer to disallow the genuine and reasonable expenditure on the amounts of expenditure already paid"? Does this not amount to deliberately reading something in the law which is not there? We, as such, have no doubt in our mind that the Learned Tribunal realized the meaning and purport of Section 40(a)(ia) correctly when it held that in case of omission to deduct tax even the genuine and admissible expenses are to be disallowed. But they sought to remove the rigour of the law by holding that the disallowance shall be restricted to the money which is yet to be paid. What the Tribunal by majority did was to supply the casus omissus which was not permissible and could only have been done by the Supreme Court in an appropriate case. 10 I.T.A. Nos.336 & 337/Mds/15 Reference in this regard may be made to the judgment in the case of Bhuwalka Steel Industries vs. Bombay Iron & Steel Labour Board reported in 2010(2) SCC 273.
'Unprotected worker' was finally defined in Section 2(11) of the Mathadi Act as follows:-
''unprotected worker' means a manual worker who is engaged or to be engaged in any scheduled employment." The contention raised with reference to what was there in the bill was rejected by the Supreme Court by holding as follows: "It must, at this juncture, be noted that in spite of Section 2(11), which included the words "but for the provisions of this Act is not adequately protected by legislation for welfare and benefits of the labour force in the State", these precise words were removed by the legislature and the definition was made limited as it has been finally legislated upon. It is to be noted that when the Bill came to be passed and received the assent of the Vice-President on 05-06-1969 and was first published in the Maharashtra Government Gazette Extraordinary, Part IV on 13-06-1969, the aforementioned words were omitted. Therefore, t his would be a clear pointer to the legislative intent that the legislature being conscious of the fact and being armed with all the Committee reports and also being armed with the factual data, deliberately avoided those words. What the appellants are asking was to read in that definition, these precise words, which were consciously and deliberately omitted from the definition. That would amount to supplying the casus omissus and we do not think that it is possible, particularly, in this case. The law of supplying the casus omissus by the courts is extremely clear and settled that though this Court may supply the casus omissus, it would be in the rarest of the rate case and thus supplying of this casus omissus would be extremely necessary due to the inadvertent omission on the part of the legislature. But, that is certainly not the case here.
We shall now endeavour to show that no other interpretation is possible.
The key words used in Section 40(a)(ia), according to us, are "on which tax is deductible at source under Chapter XVII-B". If the question is "which expenses are sought to be disallowed?" The answer is bound to be "those expenses on which tax is deductible at source under Chapter XVII-B. Once this is realized nothing turns on the basis of the fact that the legislature used the word 'payable' and not 'paid or credited'. Unless any amount is payable, it can neither be paid nor credited. If n amount has neither been paid nor credited, there can be no occasion for claiming any deduction.
The language used in the draft was unclear and susceptible to giving more than one meaning. By looking 11 I.T.A. Nos.336 & 337/Mds/15 at the draft it could be said that the legislature wanted to treat the payments made or credited in favour of a contractor of subcontractor differently than the payments on account of interest, commission or brokerage, fees for professional services or fees for technical services because the words "mounts credited or paid" were used only in relation to a contractor of sub-contractor. This differential treatment was not intended. Therefore, the legislature provided that the amounts, on which tax is deductible at source under XVII-B payable on account of interest, commission or brokerage, rent, royalty, fees for professional services or fees for technical services or to a contractor of sub-contractor shall not be deducted in com putting the income of an assessee in case he has not deducted, or after deduction has not paid within the specified time. The language used by the legislature in the finally enacted law is clear and unambiguous whereas the language used in the bill was ambiguous.
A few words are now necessary to deal with the submission of Mr. Bagchi and Ms. Roychowdhuri. There can be no denial that the provision in question is harsh. But that is no ground to read the same in a manner which was not intended by the legislature. This is our answer to the submission of Mr. Bagchi. The submission of Mr. Roychowdhuri that the second proviso sought to become effective from 1st April, 2013 should be held to have already become operative prior to the appointed date cannot also be acceded to for the same reason indicated above. The law was deliberately made harsh to secure compliance of the provisions requiring deductions of tax at source. It is not the case of an inadvertent error.
For the reasons discussed above, we are of the opinion that the majority views expressed in the case of Merilyn Shipping & Transports are not acceptable. The submissions advanced by learned advocates have already been dealt with and rejected."
Gujarat High Court in Sikandarkhan N Tunvar(supra) "23. Despite this narrow interpretation of section 40(a)(ia), the question still survives if the Tribunal in case of M/s Merilyn Shipping & Transpors vs. ACIT (supra) was accurate in its opinion. In this context, we would like to examine two aspects. Firstly, what would be the correct interpretation of the said provision. Secondly, whether our such understanding of the language used by the legislature should waver on the premise that as propounded by the Tribunal, this was a case of conscious omission on the part of the Parliament. Both these aspects we would address one after another. If one looks closely to the provision, in question, adverse consequences of not 12 I.T.A. Nos.336 & 337/Mds/15 being able to claim deduction on certain payments irrespective of the provisions contained in Sections 30 to 38 of the Act would flow if the following requirements are satisfied:-
(a) There is interest, commission or brokerage, rent, royalty, fees for professional services or fees for technical services payable to resident or amounts payable to a contractor or sub-contractor being resident for carrying out any work.
(b) These amounts are such on which tax is deductible at source under XVIII-B.
(c) Such tax has not been deducted or after deduction has not been paid on or before due date specified in sub-
Section (1) of Section 39.
For the purpose of current discussion reference to the proviso is not necessary.
24. What this Sub-Section, therefore, requires is that there should be an amount payable in the nature described above, which is such on which tax is deductible at source under Chapter XVII-B but such tax has not been deducted or if deducted not paid before the due date. This provision nowhere requires that the amount which is payable must remain so payable throughout during the year. To reiterate the provision has certain strict and stringent requirements before the unpleasant consequences envisaged therein can be applied. We are prepared to and we are duty bound to interpret such requirements strictly. Such requirements, however, cannot be enlarged by any addition or subtraction of words not used by the legislature. The term used is interest, commission, brokerage etc. is payable to a resident or amounts payable to a contractor or sub-contractor for carrying out any work. The language used is not that such amount must continue to remain payable till the end of the accounting year. Any such interpretation would require reading words which the legislature has not used. No such interpretation would even otherwise be justified because in our opinion, the legislature could not have intended to bring about any such distinction nor the language used in the section brings about any such meaning. If the interpretation s advanced by the assessees is accepted, it would lead to a situation where the assessee though was required to deduct the tax at source but no such deduction was made or more flagrantly deduction though made is not paid to the Government, would escape the consequence only because the amount was already paid over before the end of the year in contrast to another assessee who would otherwise be in similar situation but in whose case the amount remained payable till the end of the year. We simply do not see any logic why the 13 I.T.A. Nos.336 & 337/Mds/15 legislature would have desired to bring about such irreconcilable and diverse consequences. We hasten to add that this is not the prime basis on which we have adopted the interpretation which we have given. If the language used by the Parliament conveyed such a meaning, we would not have hesitated in adopting such an interpretation. We only highlight tht we would not readily accept that the legislature desired to bring about an incongruous and seemingly irreconcilable consequences. The decision of he Supreme Court in the case of Commissioner of Income-Tax, Gujarat vs. Ashokbhai Chimanbhai (supra), would no6t alter this situation. The said decision, of course, recognizes the concept of ascertaining the profit and loss from the business or profession with reference to a certain period i.e. the accounting year. In this context, last date of such accounting period would assume considerable significance. However, this decision nowhere indicates that the events which take place during the accounting period should be ignored and the ascertainment of fulfilling a certain condition provided under the statute must be judged with reference to last date of the accounting period. Particularly, in the context of requirements f Section 40(a)(ia) of the Act, we see no warrant in the said decision of the Supreme Court to apply the test of payability only as on 31st March of the year under consideration. Merely because, accounts are closed on that date and the computation of profit and loss is to be judged with reference to such date, does not mean that whether an amount is payable or not must be ascertained on the strength of the position emerging on 31t March.
25. This brings us to the second aspect of this discussion, namely, whether this is a case of conscious omission and therefore, the legislature must be seen to have deliberately brought about a certain situation which does not require any further interpretation. This is the fundamental argument of the Tribunal in the case of M/s Merilyn Shipping & Transports vs. ACIT (supra) to adopt a particular view.
26. While interpreting a statutory provision the Courts have often applied Hyden's rule or the mischief rule and ascertained what was the position before the amendment, what the amendment sought to remedy and what was the effect of the changes.
27 to 36....................
37. In our opinion, the Tribunal committed an error in applying the principle of conscious omission in the present case. Firstly, as already observed, we have serious doubt whether such principle can be applied by comparing the draft presented in Parliament and ultimate legislation 14 I.T.A. Nos.336 & 337/Mds/15 which may be passed. Secondly, the statutory provisions is amply clear.
38. In the result, w are of the opinion that Section 40(a)(ia) would cover not only to the amounts which are payable as on 20 ITA No. 63&64m 83-85&7-72/Coch/2014 31st March of a particular year but also which are payable at any time during the year. Of course, as long as the other requirement of the said provision exist. In that context, in our opinion the decision of the Special Bench of the Tribunal in the case of M/s Merilyn Shipping & Transports vs ACIT (supra), does not lay down correct law."
14. By following the judgments of the Calcutta High Court in Crescent Export Syndicate (supra) and the Gujarat High Court in Sikandarkhan N Tunvar (supra), this Tribunal is of the considered opinion that the decision of the Special Bench of this Tribunal in the case of M/s Merilyn Shipping & Transports (supra) and the judgment of the Allahabad High Court in Vector Shipping Services (P) Ltd (supra) are not applicable to the facts of the case under consideration whereas the judgments of the Calcutta High Court in Crescent Export Syndicate (supra) and the Gujarat High Court in Sikandarkhan N Tunvar (supra) are squarely applicable to the facts of the case. Respectfully following the judgments of the Calcutta High Court in Crescent Export Syndicate (supra) and the Gujarat High Court in Sikandarkhan N Tunvar (supra), we do not see any infirmity in the orders of the lower authorities. Accordingly, the orders of the lower authorities are confirmed."
12. One of us, the Judicial Member is a party to the above order of the Cochin Bench of this Tribunal. In fact, the assessee before the Cochin Bench filed a Miscellaneous Petition on the ground that there is an error in the order of this Tribunal. The Cochin Bench rejected the Miscellaneous Petition filed by the assessee. The assessee challenged the correctness of the order passed by the Cochin Bench on the Miscellaneous Petition by way of Writ Petition before the Kerala High Court. The Kerala High Court, however, dismissed the Writ Petition filed by the assessee. In those 15 I.T.A. Nos.336 & 337/Mds/15 circumstances, this Tribunal is of the considered opinion that the judgments of Calcutta High Court and Gujarat High Court have to be preferred rather than the judgment of Allahabad High Court. In other words, the judgment of Allahabad High Court does not contain any reasoning, therefore, it has to be treated as per incuriam. By respectfully following the judgments of Calcutta High Court in Crescent Export Syndicates (supra) and Gujarat High Court in Sikandarkhan N. Tunvar (supra) for the reasons stated therein, we uphold the order of the CIT(Appeals).
13. Now coming to the alternative contention of the assessee, admittedly, the assessee claims that it is a business expenditure. For the purpose of business, business expenditure would fall under Section 37(1) of the Act. Therefore, this Tribunal is of the considered opinion that the provisions of Section 40 of the Act is equally applicable. Hire charges paid by the assessee on machine is liable for deduction of tax under Section 194-I of the Act. Therefore, the assessee is expected to deduct tax at the time of making the payment. Therefore, the alternative contention of the assessee is also does not hold any merit at all. Accordingly, the order of the CIT(Appeals) is confirmed.
16 I.T.A. Nos.336 & 337/Mds/15
14. The next ground arises for consideration is with regard to depreciation on Maruthi car.
15. Shri T.S. Lakshmi Venkatraman, the Ld. representative for the assessee, submitted that the assessee has claimed for depreciation on Maruthi car. However, on Innova car, the assessee has restricted the depreciation to 50% of the normal rate of depreciation. According to the Ld. representative, when the assessee himself restricted the depreciation to 50% of normal rate of depreciation, there is no question of any disallowance. Even otherwise, according to the Ld. representative, after introduction of the concept of "block asset on depreciation", it would not be possible to disallow any portion of the depreciation for personal use of the vehicle. According to the Ld. representative, the car was used only for business purpose, therefore, there is no question of any disallowance. The Ld. representative placed reliance on the judgment of Madras High Court in the case of CIT v. Indian Express (P) Ltd. (255 ITR 68) and submitted that even where the machinery was used by the sister concern of the assessee, the Madras High Court found that the assessee is eligible for depreciation under Section 32(2) of the Act.
17 I.T.A. Nos.336 & 337/Mds/15
16. On the contrary, Shri N. Madhavan, the Ld. Departmental Representative submitted that the use of the vehicle for personal purpose cannot be ruled out.
17. We have considered the rival submissions on either side and perused the relevant material on record. As rightly submitted by the Ld. representative for the assessee, the assessee has claimed depreciation on Innova car at 50% of normal rate. Therefore, this Tribunal is of the considered opinion that there is no question of making any further disallowance on Maruthi car. It is not in dispute that Maruthi car was used for business purpose. Therefore, the assessee is entitled to claim depreciation on the Maruthi car. Accordingly, the orders of the lower authorities are set aside and the Assessing Officer is directed to allow the depreciation on Maruthi car maintenance expenses as claimed by the assessee.
18. In the result, assessee's appeal in I.T.A. No.336/Mds/15 is dismissed and appeal in I.T.A. No.337/Mds/15 is partly allowed.
Order pronounced on 29th May, 2015 at Chennai.
sd/- sd/-
(A.Mohan Alankamony) (N.R.S. Ganesan)
(ए. मोहन अलंकामणी) (एन.आर.एस. गणेशन)
लेखा सद य/Accountant Member या यक सद य/Judicial Member
18 I.T.A. Nos.336 & 337/Mds/15
चे नई/Chennai,
th
5दनांक/Dated, the 29 May, 2015.
Kri.
आदे श क/ - त6ल7प अ8े7षत/Copy to:
1. अपीलाथ,/Appellant
2. -.यथ,/Respondent
3. आयकर आय9
ु त (अपील)/CIT(A), Salem
4. आयकर आय9
ु त/CIT, Salem
5. 7वभागीय - त न ध/DR
6. गाड( फाईल/GF.