Income Tax Appellate Tribunal - Ahmedabad
Arasuri Associates,, Palanpur vs Department Of Income Tax on 24 November, 2004
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IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD BENCH "D" AHMEDABAD
Before S/Shri Bhavnesh Saini, JM and D.C.Agrawal, AM
ITA No.1190/Ahd/2008
Asst. Year :2005-06
Income-tax Officer, Vs. M/s Arasuri Associates,
Ward-4, Palanpur. GIDC Himatnagar Road,
Ambaji (B.K.)
(Appellant) (Respondent)
..
Appellant by :- Shri S. K. Meena, Sr.DR
Respondent by:- Shri Manoj Lekinwala, AR
ORDER
Per D.C. Agrawal, Accountant Member.
This is an appeal filed by the Revenue raising following ground:-
(1) The ld. CIT(A)-XV, Ahmedabad has erred in law and on facts in allowing the depreciation to the assessee the order of the AO may be upheld.
2. Thus the only issue involved in this appeal is that ld. CIT(A) has allowed depreciation to the assessee on 9 trucks and dumpers which were actually not owned by the assessee. The facts of the case are that during the course of assessment proceedings the AO found that assessee firm is engaged in the business of transportation and job work of canal digging. It is executing job work for M/s Bhagirath Associates being main contractor. The assessee claimed depreciation on 9 trucks/dumpers @ 25%. The AO found that trucks were not actually transferred in the name of assessee firm though they were used for the business of the assessee.
ITA No.1190/Ahd/2008Asst. Year 2005-06 Part payment against the cost of trucks/dumpers was made during this year. He for the reason that trucks/dumpers are not registered in the name of the assessee considered to disallow the claim of depreciation. However, the ld. CIT(A) allowed the claim. She examined the claim in respect of each dumber and Jeep and found that there was agreement for purchases of these trucks, part payment against their cost was made, trucks were taken into possession and they were also utilized for the business of the assessee. The ld. CIT(A) gave following findings in respect of these trucks :-
"5. 5 Dumpers bearing Nos.GJ 18J-6008, GJ 18U-6010, GJ 18U-6011, GJ 18U-6012 and GJ 18U-6014 were purchased from Mukesh Transport by the appellant vide purchase agreement dated 24.11.2004 at an amount of Rs.50,52,700/-
Ledger account copy of Mukesh Transport given vide submissions dated 17.12.2007 reveals that out of Rs.50,52,700/- the appellant paid Rs.16,89,250/- to Mukesh Transport in the F.Y 2004-05 vide instalments drawn on HDFC Bank and the balance instalments of different amounts totaling Rs.33,63,450/- were paid in the year 2005-06.
6. Dumper No.GJ 18T 9638 was purchased from Biharibhai Shivlal Shah HUF at Rs.10,10,000/- vide agreement dated 20.12.2004 and through submission dated 17.12.2007, ledger account copy of Biharibhai Shivlal Shah HUF in the books of the appellant was filed which shows that Rs.2,09,000/- was paid in FY 2004-05 and balance instalments of Rs.8,01,000/- were paid in the next FY that is 2005-06.
7. 2 Dumpers bearing Nos.GJ 18 T-9637 and GJ 18T 9639 were purchased by the appellant from Pankaj Vijay & Co. each dumper costing Rs.10,10,000/- vide agreement dated 20.12.2004. Ledger account copy of Pankaj Vijay & Co. was filed vide written submissions dated 17.12.2007 which shows that out of Rs.20,20,000/- Rs.9,29,500/- was paid towards the cost of the dumpers in the FY 04-05 and the balance amount of Rs.12,55,900/- in the next FY that is 2005-06.
8. Another dumper bearing No.GJ 18T-9476 was purchased at Rs.10,00,000/- from M/s Ranchodray Traders vide agreement dated 2 ITA No.1190/Ahd/2008 Asst. Year 2005-06 20.10.2004. Ledger account copy of Ranchodraw Traders was filed vide written submissions dated 17.12.2007 which shows that out of Rs.10,10,000/-, Rs.4,27,550/- was paid towards the cost of the dumpers in the FY 04-05 and the balance amount of Rs.5,82,450/- was paid in the next FY that is 05-06.
9. The payment for the Jeep was made vide cheque drawn on HDFC Bank dated 10.2.2005 of Rs.1,41,000/- as clear from the ledger account copy of the seller of the Jeep (Swami Ramswarup Puri) maintained by the appellant."
Thereafter she followed various decisions as under :-
1. CIT vs. Western Hostels (P) Ltd. 106 Taxman 168 (Delhi) (Mag.)
2. National Industrial Corporation Ltd. vs. CIT 258 ITR 575 (Deli)
3. ACIT vs. Samgjvo Texto;e Emgomeeromg (P) Ltd. 65 TTJ Ahd.425
4. Mysore Minerals Ltd. vs. CIT 239 ITR 775 (SC)
5. CIT vs. Deepak Nitrite Ltd. 243 ITR 825 (Guj)
6. CIT vs. Basti Sugar Mills Co. Ltd. 257 ITR 88 (Delhi)
3. We have heard the parties and carefully perused the material on record. In our considered view there is no case for interference in the order of ld. CIT(A). The reasons are that for allowing depreciation constructive ownership is sufficient as held by various courts on which ld. CIT(A) has relied. In CIT vs. Western Hostels (P) Ltd. (supra) full payment was made for the building which was acquired by the assessee. The depreciation was allowed. Similarly in CIT vs. Deepak Nitrite Ltd. (supra) the assessee acquired possession of factory and office building but the conveyance deed was not registered within the accounting year itself. The depreciation was allowed. Hon. Madras High Court in CIT vs. Smt. A. Sivakami and Another (2010) 322 ITR 64 (Mad) held that where 3 ITA No.1190/Ahd/2008 Asst. Year 2005-06 assessee is beneficial owner of the buses which were actually not registered and evidence to establish beneficial ownership is furnished then assessee would be entitled for depreciation on such business. Further Hon. Madras High Court in Universal Radiators Ltd. vs. CIT (2006) 281 ITR 261 (Mad) held that where factory building allotted by the partnership firm on its dissolution but not registered in personal name of the partner is not a relevant consideration. The person utilizing the factory building for its business is entitled for depreciation. Hon. Supreme Court in Mysore Minerals Ltd. vs. CIT 239 ITR 775 (SC) has held that owning rights have a very wide connotation which would depend upon the context in which the terms are used. Hon. Apex Court followed the concept in another judgment of Apex Court in CIT vs. Poddar Cement P. Ltd. 226 ITR 625 (SC) wherein it is held that the "term" held under section 32(1) must be assigned a wider meaning. Any one in possession of the property in his own right exercise domination over the property to the exclusion to other and have a right to use and occupy the property and enjoy its usufruct in his own right, would be the owner of the property and would be entitled to depreciation even though formalities of title may not have been registered or executed as contemplated under the Transfer of Property Act/Registration Act etc. Hon. Allahabad High Court in Anil Bulk Carriers (P) Ltd. vs. CIT (2005) 276 ITR 625 (All) held that where trucks were not registered in the name of the assessee in the relevant accounting year but were used by the assessee for his business even before registration, then such trucks are entitled to depreciation. In the present case also agreement to purchase is not disputed. Similarly assessee's part payment against the cost of dumpers/trucks and possession by the assessee are also not disputed and their use for the assessee's business is accepted by both the parties. Under these circumstances, the ratio of above judgments is clearly applicable to 4 ITA No.1190/Ahd/2008 Asst. Year 2005-06 the assessee's case and, therefore, assessee is entitled for depreciation on trucks/dumpers/jeep. Accordingly the appeal filed by the Revenue is dismissed.
4. In the result, the appeal filed by the Revenue is dismissed.
Order was pronounced in open Court on 22/10/10.
Sd/- Sd/-
(Bhavnesh Saini) (D.C. Agrawal)
Judicial Member Accountant Member
Ahmedabad,
Dated : 22/10/10.
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
1.Date of dictation 5/10/2010.
2.Date on which the typed draft is placed before the Dictating 15/10/2010 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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