Dy. Commissioner of Income Tax, Circle-1(1)., Hyderbad V. Andhra Pradesh State Warehousing Corporation Limited., Hyderabad

ITA 1006/Hyd/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2451 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 13-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N SWAPNA
• Assessee Lawyers: B SATYANARAYANA MURTHY
• Keywords: Depreciation

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NOS. 1006/HYD/2017 ASSESSMENT YEAR: 2012-13 & 1007/HYD/2017 ASSESSMENT YEAR: 2013-14 DY. CIT, CIRCLE-1(1), HYDERABAD. VS. M/S. A.P STATE WAREHOUSING CORPORATION LTD., HYDERABAD. PAN AABCA7364F (APPELLANT) (RESPONDENT) REVENUE BY : SMT. N. SWAPNA ASSESSEE BY : SHRI B. SATYANARAYANA MURTHY DATE OF HEARING : 31-10-2017 DATE OF PRONOUNCEMENT : 31-10-2017 ORDER PER P. MADHAVI DEVI, J.M.: BOTH ARE REVENUES APPEALS, FOR A.YS 2012-13 AND 2013-14 RESPECTIVELY AGAINST THE ORDERS OF THE CIT(A)-1, GUNTUR DATED 24-03-2017 AND CIT(A)-1, HYDERABAD DATED 15-02-2017 RESPECTIVELY. 2. IN THESE TWO APPEALS, THE REVENUES GRIEVANCE IS AGAINST ALLOWING DEPRESSION TO THE ASSESSEE ON WOODEN CRATES @ 100% AS CLAIMED BY THE ASSESSEE, AS AGAINST THE DEPRECIATION RESTRICTED @ 15% BY THE A.O. THE CIT(A) HAD 2 ITA NO. 1006 & 1007/HYD2017. M/S AP STATE WAREHOUSING CORP LTD., HYDERABAD. RELIED UPON THE ORDER ITAT IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2003-04 FOR GRANTING RELIEF TO THE ASSESSEE AND THE REVENUE HAS RAISED THE GROUND NO. 3 THAT THE DECISION OF THE ITAT FOR THE A.Y 2003-04 IN THE ASSESSEES OWN CASE HAS NOT BEEN ACCEPTED BY THE REVENUE AND THAT IT IS CONTESTED BEFORE THE HONBLE HIGH COURT OF ANDHRA PRADESH. 3. THUS, IT IS CLEAR THAT THE SAME ISSUE HAD ARISEN IN THE ASSESSEES OWN CASE FOR THE A.Y 2003-04, AND THE ISSUE HAD TRAVELLED UP TO ITAT AND THE COORDINATE BENCH OF THIS TRIBUNAL, VIDE ORDERS DATED 22-07-2011, IN ITA NO. 651/HYD/2007 HAS CONSIDERED THE ISSUE AT LENGTH AND AT PARAS 17 TO 19 HAS HELD AS UNDER: 17. THE NEXT GROUND IS WITH REGARD TO DEPRECIATION ON WOODEN CRATES AT 100%. 18. WE HAVE HEARD BOTH THE PARTIES ON THIS ISSUE. THIS ISSUE WAS COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF MADRAS HIGH COURT IN THE CASE OF CIT VS. MADHURAI SOFT DRINKS (P) LTD. (276 ITR 607) (MDS.) WHEREIN IT WAS HELD THAT CRATES AND BOTTLES WERE ENTITLED FOR DEPRECIATION @ 100%. A SIMILAR VIEW COURT IN CIT VS. AQUEOUS VICTUALS P LTD. (2004) (266 ITR 573) WHERE ALSO THE BOTTLES AND CRATES USED BY THE SOFT DRINK BOTTLES WERE HELD ENTITLED TO DEPRECIATION. IN THE SAID DECISION, THE ALLAHABAD HIGH COURT, FOLLOWING A DECISION OF THE ANDHRA PRADESH HIGH COURT IN CIT VS. SRI KRISHNA BOTTLERS PVT. LTD. (1989) (175 ITR 154) HELD THAT BOTTLES WERE ESSENTIAL TOOLS OF THE TRADE. WITHOUT THE BOTTLES AND SHELLS, THE SOFT DRINKS 3 ITA NO. 1006 & 1007/HYD2017. M/S AP STATE WAREHOUSING CORP LTD., HYDERABAD. COULD NOT BE EFFECTIVELY TRANSPORTED. THE BOTTLES AND THEIR CONTAINERS TOTALLY INTER DEPENDENT. SO WERE THE SHELLS. THE BOTTLES AND SHELLS ALSO SATISFIED THE DURABILITY TEST BECAUSE IT WAS NOBODYS CASE THAT THEIR LIFE WAS SO TRANSITORY OR NEGLIGIBLE AS TO WARRANT AN INTERFERENCE THAT THEY HAD NO FUNCTION TO PLAY IN THE ASSESSEES TRADE. THEY WERE, THEREFORE, PLANT FOR THE PURPOSE OF THE ACT AND THE ASSESSEE IS ENTITLED TO DEPRECIATION IN RESPECT OF THEM U/S 32(1)(II) OF THE ACT. 19. THE SAID DECISION OF THE ANDHRA PRADESH HIGH COURT IN CIT VS. SRI KRISHNA BOTTLERS PVT. LTD. (175 ITR 154), WAS CONFIRMED BY THE APEX COURT BY A DECISION REPORTED IN (1994), 209 ITR (ST.) 85. THE VIEW TAKEN BY THE ALLAHABAD HIGH COURT IN CIT VS. AQUEOUS VICTUALS PVT. LTD. (2004) (266 ITR 573), WAS ALSO CONFIRMED BY THE APEX COURT BY A DECISION REPORTED IN (2004) 266 ITR (ST.) 2. APPLYING THE RATIO ENUNCIATED FROM THE AFORESAID DECISIONS TO THE FACTS OF THE PRESENT CASE ON HAND, WE ARE OF THE CONSIDERED OPINION THAT THE CRATES ENTITLED FOR DEPRECIATION AT 100%. 4. SINCE THE CIT(A) HAS ONLY FOLLOWED THE PRECEDENT ON THE ISSUE BEING THE ORDER OF ITAT WHICH HAS NOT BEEN SUSPENDED BY THE HONBLE ANDHRA PRADESH HIGH COURT, THE REVENUES APPEALS ARE LIABLE TO BE DISMISSED. 5. IN THE RESULT, THE APPEALS FILED BY THE REVENUES FOR THE A.YS 2012-13 AND 2013-14 ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 31 ST OCTOBER , 2017. SD/- SD/- (B. RAMAKOTAIAH) (P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 31 ST OCTOBER, 2017. 4 ITA NO. 1006 & 1007/HYD2017. M/S AP STATE WAREHOUSING CORP LTD., HYDERABAD. KRK 1) M/S AP STATE WAREHOUSING CORP., LTD, WAREHOUSING SADAN, II FLOOR, BEHIND, GANDHI BHAVAN, NAMPALLY, HYDERABD.01. 2) THE DCIT, CIRCLE-1(1), HYDERABAD 3) CIT(A)-1, GUNTUR. 4) CIT(A)-1,HYDERABAD 5) PCIT, RANGE-1,HYDERABAD. 6) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD. 7) GUARD FILE