Deventhira Spinners (P) Ltd., Erode V. ACIT, Salem

CO 61/CHNY/2013

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8444 (ITAT-CHENNAI)
• Duration Of Justice: 23 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 02-05-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 09-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN JCITD R
• Assessee Lawyers: S SRIDHAR
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH CHENN AI BEFORE DR.O.K.NARAYANAN, VICE PRESIDENT AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER .. ITA NO.452/MDS./2013 ASSESSMENT YEAR:2009-10 & C.O. NO.61/MDS.2013 THE ASSISTANT COMMISSIONER OF INCOME- TAX, CIRCLE-I(1), SALEM. VS. M/S.DEVENTHIRA SPINNERS (P) LTD., PALLIPALAYAM TO SANKARI ROAD, UPPUPALAYAM, PADAVEEDU VILLAGE, SANNIYASIPATTI POST, SANKARI WEST 637 306. PAN AAACD 7410 J (APPELLANT) (RESPONDENT/ CROSS OBJECTOR ) ITA NO.453/MDS./2013 ASSESSMENT YEAR:2009-10 & C.O. NO.77/MDS.2013 THE ASSISTANT COMMISSIONER OF INCOME- TAX, CIRCLE-I(1), SALEM. VS. M/S.VELATHAL SPINNING MILLS (P) LTD., NO.115,TIRUCHENGODE ROAD, PALLIPALAYEM 638 006. PAN AAACV 6931 C (APPELLANT) (RESPONDENT/ CROSS OBJECTOR ) DEVENTHIRA SPINNERS P LTD VELATHAL SPINNING MILLS P LTD. 2 DEPARTMENT BY : SHRI N.MADHAVAN, JCIT,D.R. ASSESSEE BY : SHRI S.SRIDHAR, ADVOCATE DATE OF HEARING : 02.05.13 DATE OF PRONOUNCEMENT : 02. 05.13 O R D E R PER VIKAS AWASTHY JUDICIAL MEMBER : THE AFOREMENTIONED TWO APPEALS HAVE BEEN FILED B Y THE REVENUE IMPUGNING THE ORDERS OF CIT(A), SALEM BOTH DATED 31.12.2002 FOR THE ASSESSMENT YEAR 2009-10. SINCE IDENTICAL ISSUES ARE INVOLVED IN BOTH THE APPEALS, THESE APPE ALS ARE TAKEN UP TOGETHER FOR ADJUDICATION. THE ASSESSEES HAVE FILED CROSS OBJECTIONS IN SUPPORT OF THE ORDER OF CIT(A). 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE COMPANIES ARE ENGAGED IN THE BUSINESS OF RUNNING OF SPINNING MILLS AND ALSO OPERATING WIND MILLS. FOR THE ASSESSMENT YEAR 2009 -10, THE ASSESSEES FILED THEIR RESPECTIVE RETURN OF INCOME C LAIMING DEPRECIATION ON WIND MILL. THE ASSESSING OFFICER R ESTRICTED THE DEPRECIATION ON SOME COMPONENTS OF WIND MILL, WHICH INCLUDES: DEVENTHIRA SPINNERS P LTD VELATHAL SPINNING MILLS P LTD. 3 I) CIVIL WORK, II) INSTALLATION OF ELECTRICAL LINE FOR POWER TRANSMISSION, III) INFRASTRUCTURE FEE PAID TO TNEB AND IV) TRANSFORMER. THE ASSESSING OFFICER OPINED THAT THE AFORESAID COMPONENTS OF THE WINDMILL DO NOT QUALIFY FOR DEPRE CIATION AT HIGHER RATE I.E. @ 80% AND ALLOWED DEPRECATION @ 10 % ONLY. AGGRIEVED AGAINST THE ORDER OF ASSESSMENT , THE A SSESSEES FILED APPEALS BEFORE THE CIT(A), SALEM. THE CIT(A) FOLLOWING THE DECISION OF THE TRIBUNAL IN THE CASE OF M/S.VELATH AL SPINNING MILLS [P} LTD., IN ITA NO.2082 & 2083/MDS./2010 DECIDED O N 30.06.2011 FOR THE ASSESSMENT YEARS 2005-06 & 2006 -07 RESPECTIVELY, ALLOWED THE CLAIM OF THE ASSESSEE. AGGRIEVED AGAINST THE ORDER OF CIT(A), NOW REVENUE IS IN SECOND APPEAL BEFORE THE TRIBUNAL. 4. SHRI S.SRIDHAR, ADVOCATE, APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ISSUES RAISED IN THE PR ESENT APPEALS ARE SQUARELY COVERED BY THE DECISION OF CO-ORDINATE BENCH OF THE TRIBUNAL IN ITA NO.2082 & 2083/MDS./2010 (SUPRA). A COPY OF ORDER OF THE TRIBUNAL DATED 30.06.2011 IN THE ABOVE SAID APPEALS HAS BEEN PLACED ON RECORD BY HIM. DEVENTHIRA SPINNERS P LTD VELATHAL SPINNING MILLS P LTD. 4 SHRI N.MADHAVAN, APPEARING ON BEHALF OF THE REVEN UE, HAS FAIRLY CONCEDED THAT THE ISSUES IN PRESENT SET OF A PPEALS ARE ALREADY DECIDED IN FAVOUR OF THE ASSESSEE IN ASSESS EE'S OWN CASE FOR THE ASSESSMENT YEARS 2005-06 & 2006-07. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY BOTH THE PARTIES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELO W AS WELL AS THE ORDER OF THE TRIBUNAL IN ITA NOS.2082 & 2083/MD S./2010. WE FIND THAT THE ISSUE IN HAND HAS ALREADY BEEN DEC IDED IN FAVOUR OF THE ASSESSEE BY D BENCH OF THIS TRIBUNAL IN T HE AFORESAID APPEALS IN ASSESSEE'S OWN CASE. THE TRIBUNAL HAS HELD THAT ALL THE FOUR COMPONENTS OF WINDMILL VIZ. CIVIL WORK, IN STALLATION OF ELECTRICAL LINE FOR POWER TRANSMISSION, INFRASTRUCT URE FEE PAID TO TNEB AND TRANSFORMER, ARE INTEGRAL PART OF WINDMIL L AND ARE THUS ENTITLED FOR THE DEPRECIATION @ 80%. THE TRIBUNAL I N ITS ORDER HAS OBSERVED THAT THERE IS NO PROVISION FOR SEGREGATING THE VALUE OF THE ASSET FOR THE PURPOSE OF DEPRECIATION WHEN THE ASSET IS A SINGLE IDENTIFIABLE UNIT. RESPECTFULLY FOLLOWING DECISION OF THE CO-ORDINATE BENCH OF TRIBUNAL IN ASSESSEE'S OWN CAS E, BOTH APPEALS OF THE REVENUE ARE DISMISSED AND THE CROSS OBJECTIONS DEVENTHIRA SPINNERS P LTD VELATHAL SPINNING MILLS P LTD. 5 FILED BY THE ASSESSEES SUPPORTING THE ORDER OF CIT( A), ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON 2 ND MAY, 2013. SD/- SD/- (DR.O.K.NARAYANAN) (VIKAS AWASTHY) VICE PRESIDENT JUDICIAL MEMBER CHENNAI, DATED THE 2 ND MAY, 2013. K S SUNDARAM COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE DEVENTHIRA SPINNERS P LTD VELATHAL SPINNING MILLS P LTD. 6