Case Law Details
ACIT Vs Apraava Energy Pvt. Ltd. (ITAT Ahmedabad)
ITAT Ahmedabad held that motor vehicles qualify as self-propelled vehicles and accordingly depreciation at the rate of 33.40% available on the same.
Facts- AO observed that assessee has claimed exempt income amounting to Rs.2,66,445/-. Further, from a perusal of the profit & loss account of the assessee, the AO observed that the assessee has claimed expenditure on account of interest payment on loans. Accordingly, after taking the submissions of the assessee on record, the AO made disallowance of Rs.41,23,26,600/- u/s. 14A read with Rule 8D. CIT(Appeals) in the appellate proceedings, restricted the disallowance to the amount of income claimed to be exempt by the assessee amounting to Rs.2,66,445/-. Accordingly, being aggrieved, department has preferred the present appeal.
Further, AO observed that on verification of Tax Audit Report it was found that the assessee has claimed depreciation on “self-propelled vehicles” @33.40% for an amount of Rs.1,30,17,767/-. AO was of the view that as assessee’s claim for depreciation falls under category (p)- “any other assets not covered above” of the Appendix IA to Rule 5(1A) and depreciation thereon is allowable at the rate of 7.69%, while the assessee has claimed depreciation under category (k)-“self-propelled vehicle” and has claimed depreciation at the rate of 33.40% on motor vehicles. CIT(A) allowed the appeal. Accordingly, being aggrieved, department has preferred the present appeal.
Conclusion- We are of the considered view that it is a well-settled law on the subject that no disallowance can be made under section 14A in case the assessee has not earned any exempt income or in excess of income claimed to be exempt.
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