M/s.Kerala Live stock dev.Board Ltd, Trivandrum V. ACIT, Trivandrum

CO 12/COCH/2011

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7639 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 5 month(s) 10 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 28-09-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 18-04-2011
• Court: TRIBUNAL
• Assessee Lawyers: T M SREEDHARAN
• Keywords: Depreciation; Cost of acquisition
• Section: 148; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NO. 101 /COCH/2011 ASSESSMENT YEAR: 2004-05 THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-1(1), TRIVANDRUM. VS. KERALA LIVESTOCK DEVELOPMENT BOARD, GOKULAM, PATTOM P.O., TRIVANDRUM. [PAN : AAACK 9533D] (REVENUE -APPELLANT) (ASSESSEE -R ESPONDENT) C.O. NO. 12/COCH/2011 (ARSG. OUT OF I.T.A. NO. 101 /COCH/2011) ASSESSMENT YEAR: 2004-05 M/S. KERALA LIVESTOCK DEVELOPMENT BOARD, GOKULAM, PATTOM P.O., TRIVANDRUM [PAN : AAACK 9533D] VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX,CIRCLE-1(1), TRIVANDRUM. (REVENUE -APPELLANT) (ASSESSEE -R ESPONDENT) REVENUE BY SHRI PRATAP NARAYAN SHARMA, JR. DR ASSESSEE BY SHRI T.M. SREEDHARAN, SR. ADV. DATE OF HEARING 27/08/2012 DATE OF PRONOUNCEMENT 28/09/2012 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE REVENUE AND THE CROSS OBJECT ION FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 29-11-2010 PASSED BY LD CIT (A)-1, TRIVANDRUM AND THEY RELATE TO THE ASSESSMENT YEAR 2004-05. 2. THE REVENUE IS ASSAILING THE DECISION OF LD C IT(A) IN HOLDING THAT THE GRANTS IN AID RECEIVED BY THE ASSESSEE PRIOR TO 1.4.1998 IS NOT R EQUIRED TO BE DEDUCTED FROM THE COST I.T.A. NO.1001COCH/2011 & C.O. NO. 12/COCH/2011 2 OF ASSETS FOR THE PURPOSE OF COMPUTING DEPRECIATION ON THOSE ASSETS. IN THE CROSS OBJECTION, THE ASSESSEE IS SUPPORTING THE ORDER PAS SED BY LD CIT(A). 3. THE FACTS RELATING TO THE SAID ISSUE ARE STA TED IN BRIEF. THE RETURN OF INCOME FILED BY THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION DE CLARING A LOSS OF RS.62,78,591/- WAS INITIALLY PROCESSED U/S 143(1) OF THE ACT. ON NOTI CING THAT THE ASSESSEE DID NOT DEDUCT THE GRANTS IN AID RECEIVED FROM THE PURCHASE COST O F ASSETS FOR THE PURPOSE OF COMPUTATION AS REQUIRED UNDER EXPLANATION 10 TO SEC. 43(1), WHICH HAS RESULTED IN ALLOWANCE OF EXCESS DEPRECIATION, THE AO REOPENED T HE ASSESSMENT BY ISSUING NOTICE U/S 148 OF THE ACT IN ORDER TO DISALLOW THE EXCESS DEPRECIATION CLAIM MADE BY THE ASSESSEE. THE AO COMPLETED THE ASSESSMENT BY MAKIN G ADDITION OF RS.17,07,579/- TOWARDS EXCESS CLAIM OF DEPRECIATION. 4. BEFORE THE LD CIT(A), THE ASSESSEE SUBMITTED THAT THE GRANTS IN AID WAS RECEIVED BY THE ASSESSEE PRIOR TO 1.4.1998. IT WAS FURTHER SUBMITTED THAT THE EXPLANATION 10 TO SEC. 43(1), WHICH PROVIDES FOR DEDUCTION OF GRANTS IN AID FROM THE COST OF ASSET FOR THE PURPOSE OF COMPUTATION OF DEPRECIATION, WAS INSERTE D INTO THE ACT WITH EFFECT FROM 1.4.1999 AND HENCE IT SHALL HAVE EFFECT FROM THE AS SESSMENT YEAR 1999-2000 ONWARDS ONLY. ACCORDINGLY IT WAS CONTENDED THAT THE GRANTS IN AID RECEIVED IN THE YEARS PRIOR TO THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR 1999-2000 NEED NOT BE DEDUCTED FROM THE COST OF THE ASSETS FOR THE PURPOSE OF COMP UTATION OF DEPRECIATION. IN SUPPORT OF THE SAID CONTENTIONS, THE ASSESSEE RELIED UPON D ECISION DATED 28-10-2010 PASSED BY THE TRIBUNAL IN THE ASSESSEES OWN CASE IN ITA NOS. 244 & 245/COCH/2009 RELATING TO THE ASST. YEARS 1999-2000 & 2000-01. 5. THE LD CIT(A) EXAMINED THE CONTENTIONS OF THE ASSESSEE AND BY FOLLOWING THE DECISION RENDERED BY THE TRIBUNAL IN THE ASSESSEES OWN CASE, ALLOWED THE APPEAL OF THE ASSESSEE. AGGRIEVED, THE REVENUE IS IN APPEAL BEFO RE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE RECORD. WE NOTICE THAT THE CO-ORDINATE BENCH HAS TAKEN THE VIEW THAT THE EXPLAN ATION 10 INSERTED IN SEC. 43(1) I.T.A. NO.1001COCH/2011 & C.O. NO. 12/COCH/2011 3 WITH EFFECT FROM 1.4.1999 SHALL HAVE PROSPECTIVE OP ERATION IN THE CASE OF SUN FIBRE OPTICS (P) LTD IN ITA NO.925/COCH/08, ITA NOS. 477 & 478/COCH/07 AND ITA NO.1012/COCH/08 IN ITS COMMON ORDER DATED 16-10-200 9. THE CO-ORDINATE BENCH HAS FOLLOWED THE SAID DECISION IN THE ASSESSEES OWN CA SE IN ITA NOS. 244 & 245/COCH/2009 REFERRED SUPRA. CONSEQUENTLY IT HAS BEEN HELD THAT THE GRANTS IN AID RECEIVED PRIOR TO 1.4.1998 NEED NOT BE DEDUCTED FROM THE COST OF ASSE TS FOR THE PURPOSE OF COMPUTING DEPRECIATION CLAIM. IN THE INSTANT CASE, THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE GRANTS IN AID WERE RECEIVED PRIOR TO 1.4.1998. ACCORDINGLY, CONSISTENT WITH THE VIEW TAKEN BY THE CO-ORDINATE BENCH IN THE ASSESSEES OW N CASE, WE ALSO HOLD THAT THE GRANTS IN AID RECEIVED PRIOR TO 1.4.1998 NEED NOT B E DEDUCTED FROM THE COST OF THE ASSETS FOR THE PURPOSE OF COMPUTING DEPRECIATION CL AIM, AS THE AMENDMENT BROUGHT IN SEC. 43(1) BY INSERTING EXPLANATION 10 SHALL HAVE PR OSPECTIVE EFFECT ONLY. SINCE THE LD CIT(A) HAS FOLLOWED THE DECISION RENDERED BY THE TR IBUNAL, WE DO NOT FIND ANY REASON TO INTERFERE WITH HIS ORDER. 7. IN THE RESULT, THE APPEAL OF THE REVENUE AND TH E CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. PRONOUNCED ACCORDINGLY ON 28-0 9-2012 SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 28TH SEPTEMBER, 2012 GJ COPY TO: 1. M/S. KERALA LIVESTOCK DEVELOPMENT BOARD, GOKULAM , PATTOM P.O., TRIVANDRUM. 2.THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE- 1(1), TRIVANDRUM. 3.THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, TRIVA NDRUM 4.THE COMMISSIONER OF INCOME-TAX, TRIVANDRUM 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSIS TANT REGISTRAR) I. T.A.T, COCHIN