Jt. Commissioner of Income Tax, OSD Range-1, Hyderabad V. Agarwal Spong and Energy Private Limited, Hyderabad

ITA 1011/Hyd/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 1635 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-02-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB-A
• Next Hearing Date: 01-02-2021
• Assessment Year: 2011-2012
• Appeal Filed On: 18-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y V S T SAI
• Keywords: Depreciation; Principle of natural justice; Additional depreciation; Additional evidence; TDS
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER I.T.A. NO. 1011/HYD/2018 ASSESSMENT YEAR: 2011-12 JOINT COMMISSIONER OF INCOME TAX (OSD), RANGE-1, HYDERABAD VS M/S.AGARWAL SPONGE AND ENERGY PRIVATE LIMITED, HYDERABAD [PAN: AAECA8680P] (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI Y.V.S.T.SAI, CIT-DR FOR ASSESSEE : SHRI Y.RATNAKAR, AR DATE OF HEARING : 01-02-2021 DATE OF PRONOUNCEMENT : 16-02-2021 O R D E R PER BENCH : THIS REVENUES APPEAL FOR AY.2011-12 ARISES FROM THE CIT(A)-1, HYDERABADS ORDER DATED 09-01-2018 PASSED IN APPEAL NO.0140 / CIT(A)-1, HYD / 2014-15 / 2017-18 IN PROCEEDINGS U/S. 143(3) OF THE INCOME TAX ACT, 1961 [ IN SHORT, THE ACT]. 2. LEARNED CIT-DR VEHEMENTLY CONTENDED DURING THE COUR SE OF HEARING THAT THE CIT(A) HAS ERRED IN LAW AND ON FAC TS IN ADMITTING THE ASSESSEES ADDITIONAL EVIDENCE REGARDING THE PURCHASE OF INVOICE(S) OF THE FIXED ASSET IN THE NATURE OF ITA NO. 1011/HYD/2018 :- 2 -: GENERATOR DURING THE LOWER APPELLATE PROCEEDINGS AND THAT TOO, IN VIOLATION OF RULE 46A OF THE INCOME TAX RULES. H E THUS SEEKS TO RESTORE THIS DEPRECIATION ISSUE BACK TO THE AS SESSING OFFICER ON THE ALLEGED GROUND OF VIOLATION OF PRINCI PLES OF NATURAL JUSTICE. WE NOTICE THAT THE CIT(A) FINDINGS QUA THIS DEPRECIATION ISSUE READS AS UNDER: 5.2 BEFORE ME, THE APPELLANT SUBMITTED THAT WHILE RETYPING AND PRINTING THE DEPRECIATION FOR ASSETS CLASSIFIED UND ER KILN-III ON WHICH DEPRECIATION WAS CLAIMED @15% GOT OMITTED AND CONSE QUENTLY THE TOTALS GOT ALTERED. THE APPELLANT SUBMITTED THAT TH E ASSET AND OPENING WDV, RATE OF DEPRECIATION WAS PRINTED BUT THE ACTUA L FIGURE OF DEPRECIATION GOT OMITTED. THIS RESULTED IN DIFFEREN CE IN DEPRECIATION BY RS. 3,17,04,392.70/ - (15% OF RS.21,13,62,618/-). T HE APPELLANT COMPANY HAD ALSO PURCHASED A GENERATOR OF RS.53,50, 000/- DURING THE YEAR. THE APPELLANT COMPANY HAD CLAIMED ADDITIO NAL DEPRECIATION @20% ON ADDITIONS TO PLANT & MACHINERY U/S.32(IIA) OF THE INCOME TAX ACT,1961 AT THE TIME OF FILING OF RETURN. HOWEVER, IN THE INCOME TAX RETURN AND COMPUTATION, THE DEPRECIATION WAS CORRECTLY SHOWN. FOR THESE TWO ERRORS, THE FIGU RE OF ALLOWABLE DEPRECIATION WAS WRONGLY COMPUTED AT RS.1,85,23,245 /- WHEREAS THE DEPRECIATION CLAIMED AS PER INCOME TAX ACT, 1961 IN THE RETURN OF INCOME AND AS PER THE TAX AUDIT REPORT WAS RS.5,13, 71,058/-, WHICH RESULTED IN DIFFERENCE IN DEPRECIATION OF RS.3,27,4 7,813/-. THE APPELLANT SUBMITTED THAT INCOME TAX RETURN WAS FILED ONLINE, HENCE CALCULATIONS WERE COMPUTED AUTOMATICA LLY MADE. THE APPELLANT SUBMITTED THAT DEPRECIATION ON ASSETS CAT EGORIZED UNDER KILIN III WAS CLAIMED AND ALSO THE WDV AS ON 31.03. 2010 (COPY ENCLOSED) WAS CORRECTLY BROUGHT FORWARD IN THE STAT EMENT OF ALLOWABLE DEPRECIATION FILED FOR THE AY 2011-12. HENCE, IT IS EVIDENT THAT THIS ERROR IN THE COMPUTATION OF DEPRECIATION CREPT IN A T THE TIME OF RE- TYPING AND PRINTING OF THE DEPRECIATION STATEMENT. THE APPELLANT COMPANY SUBMITTED THAT THE ESTIMATION OF INCOME BAS ED ON THE REASONING OF THE DIFFERENCE IN DEPRECIATION IS UNJU ST AND UNCALLED FOR AND IN VIOLATION OF PRINCIPLES OF NATURE JUSTICE. THE APPELLANT FURTHER SUBMITTED THAT IN REGARD TO T HE AUDIT REPORT WAS PREPARED ON 01.09.2011 AFTER COMPLETING THE AUDIT. THE APPELLANT SUBMITTED THAT IT HAD DEPOSITED TDS ON 19 .09.2011. THE AUDIT REPORT WAS NOT RELEASED UNTIL THE TDS PAYMENT S WERE MADE BY THE APPELLANT AND WERE VERIFIED WITH THE BALANCE TD S PAYABLE. THE INCOME TAX RETURN WAS FILED ON 30.09.2011. THE APPE LLANT SUBMITTED THAT CHARTERED ACCOUNTANT OF THE APPELLANT BY OVERS IGHT RETAINED THE ITA NO. 1011/HYD/2018 :- 3 -: ORIGINAL DATE AS 01.09.2011 ALTHOUGH THE TDS PAYMEN TS WERE MADE ON 19.09.2011. IN FACT, THE DATE ON THE REPORT SHOU LD HAVE BEEN CHANGED TO 19.09.2011 VIZ., THE DATE ON WHICH THIS WAS ACTUALLY RELEASED AFTER VERIFICATION OF DEPOSIT OF TDS, INST EAD OF RETAINING THE OLD DATE OF 01.09.2011. THE APPELLANT SUBMITTED THA T THE ASSESSING OFFICER HAS ALSO NOT FOUND A SINGLE DISCREPANCY IN THE DEDUCTION OR PAYMENT OF TDS. HENCE, THE REJECTION OF BOOKS BASED ON DISCREPANCY IN THE DATE OF THE AUDIT REPORT, WHICH IS MERELY A CLERICAL ERROR IS UNCALLED FOR. THE APPELLANT COMPANY SUBMITTED THAT IT MAINTAINS C OMPLETE BOOKS OF ACCOUNTS ON A DAY TO DAY BASIS. THE BOOKS MAINTAINED ARE COMPUTERIZED BOOKS AS UNDER. I. CASH BOOK, BANK BOOK AND JOURNAL DAY BOOK II. GENERAL LEDGER III. PURCHASE REGISTER IV. SALES AND SALE RETURN REGISTER V. COMPLETE EXCISE RECORDS INCLUDING GATE PASSES, INVO ICES ETC., VI. FULL VOUCHERS FILES OF ALL EXPENDITURE WITH EVIDEN CE. VII. BANK RECORDS. THE APPELLANT SUBMITTED THAT THE ERRORS IN THE DEPR ECIATION SCHEDULE ARE SUCH THAT THERE CANNOT BE ANY REJECTIO N OF BOOKS. EVEN THE ESTIMATE AT 8% HAS NO BASIS AND WITHOUT ANY COM PARABLE DATA. THE ARITHMETICAL ERROR IN THE STATEMENT OF ALLOWABL E DEPRECIATION FURNISHED AT THE TIME OF SCRUTINY PROCEEDINGS OR AN ERROR IN THE DATE OF AUDIT REPORT CANNOT JUSTIFY ANY CONCLUSION DRAWN TH AT ALL BOOKS OF ACCOUNTS ARE TO BE REJECTED AS NOT BEING CORRECT AN D NOT AUDITED IN THE TRUE SENSE. IN FACT, NO MISTAKE HAS BEEN POINTED OU T IN THE BOOKS OF ACCOUNTS OR VOLUMINOUS INFORMATION FURNISHED DURING THE ASSESSMENT PROCEEDINGS, WHICH WOULD ENTAIL REJECTION OF ALL TH E RECORDS THE APPELLANT COMPANY SUBMITTED THAT FOR THE AYS 20 07-08, 2008- 09 AND 2010-11, THE ASSESSMENTS WERE COMPLETED U/S. 143(3) AND THE BOOKS OF THE COMPANY WERE ACCEPTED. 5.3 THE SUBMISSIONS OF THE APPELLANT HAVE BEEN CARE FULLY CONSIDERED. THE CONTENTION OF THE APPELLANT THAT IN REGARD TO D EPRECIATION AND AUDIT REPORT, THERE HAS BEEN A MISTAKE IN TYPING. H ENCE THE DISCREPANCY HAS ARISEN. HAD THE ISSUES BEEN VERIFIE D FROM THE ACCOUNTS, THE MISTAKE COULD HAVE BEEN APPARENTLY SE EN. THE CONTENTION HAS BEEN VERIFIED AND FOUND TO BE CORREC T. THE APPELLANT SUBMITTED STATEMENT OF DEPRECIATION AS PER INCOME T AX ACT WHICH WAS FORMING PART OF FORM 3CD, WHICH SHOWS THE DEPRE CIATION OF RS.5,03,01,058/- AND ADDITIONAL DEPRECIATION OF RS. 10,70,000/-, TOTALLING TO RS.5,13,71,058/- THE APPELLANT SUBMITT ED BILL OF GENERATOR IN SUPPORT OF ITS CLAIM OF ADDITIONAL DEP RECIATION. THE APPELLANT IN HIS RETURN OF INCOME DATED 30.09.2011 ALSO CLAIMED ITA NO. 1011/HYD/2018 :- 4 -: RS.5,13,71,055/- TOWARDS DEPRECIATION. IT IS ALSO S EEN THAT THE ANNUAL REPORT WAS AUDITED ON 01.09.2011. THE CONFUS ION IS ONLY BECAUSE OF THE MISTAKE TYPING. HENCE, THE APPELLANT IS ACCEPTED AND THE ADDITION MADE BY THE ASSESSING OFFICER IS DELET ED. 3. LEARNED AUTHORISED REPRESENTATIVE TOOK US TO PAGE 32 OF THE PAPER BOOK INDICATING THE ASSESSEES STATEMENT OF DEPRECIATION AS PER INCOME TAX ACT SUFFICIENTLY REVEAL ING THAT IT HAD PLACED NOT ONLY THE DETAILS OF THE CORRESPONDING FI XED ASSET GENERATOR BUT ALSO FILED NECESSARY PARTICULARS DURING THE COURSE OF ASSESSMENT AS PER THE CERTIFICATE COMING FROM THE PAPER BOOK. WE THUS SEE NO MERIT IN REVENUES FOREGO ING TECHNICAL GRIEVANCE UNDER RULE 46 OF THE INCOME TAX R ULES. THE SAME IS ACCORDINGLY DECLINED. NO OTHER ARGUMENT OR GROUND HAS BEEN RAISED BEFORE U S. 4. THIS REVENUES APPEAL IS DISMISSED IN ABOVE TERMS . ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH FEBRUARY, 2021 SD/- SD/- (LAXMI PRASAD SAHU) (S.S.G ODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER HYDERABAD, DATED: 16-02-2021 TNMM ITA NO. 1011/HYD/2018 :- 5 -: COPY TO : 1.THE JOINT COMMISSIONER OF INCOME TAX(OSD), RANGE- 1, HYDERABAD. 2.M/S.AGARWAL SPONGE AND ENERGY PRIVATE LIMITED, H.NO.15-1-52/1, JAGADISH NIVAS, OLD FEELKHANA, HYDERABAD. 3.CIT(APPEALS)-1, HYDERABAD. 4.PR.CIT-1, HYDERABAD. 5.D.R. ITAT, HYDERABAD. 6.GUARD FILE.