C.R.I.Pumps Private Limited, CHENNAI V. DCIT, Coimbatore

ITA 1049/CHNY/2016

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3965 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 19-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH IRS
• Assessee Lawyers: S SRIDHAR
• Keywords: Depreciation; Additional depreciation

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI . . . , ! . '#'$ , % !& ' [BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ] ./I.T.A. NO.1049/MDS/2016 / ASSESSMENT YEAR : 2011-2012 M/S. C.R.I. PUMPS PRIVATE LIMITED, NO.7/46-1,KEERANATHAM ROAD, SARAVANAMPATYY, COIMBATORE 641 035. [PAN AAACC 9497N] VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE -2, COIMBATORE . ( () / APPELLANT) ( *+() /RESPONDENT) / APPELLANT BY : SHRI. S. SRIDHAR, ADVOCATE /RESPONDENT BY : SHRI. A.V.SREEKANTH, IRS, JCIT. /DATE OF HEARING : 16-11-2016 ! /DATE OF PRONOUNCEMENT : 23-11-2016 / O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER IN THIS APPEAL FILED BY THE ASSESSEE, ITS GRIEVAN CE IS THAT ADDITIONAL DEPRECIATION OF =8,53,07,702/- CLAIMED U /S.32(1)(IIA) OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT) WAS NOT ALLOWED TO IT. ITA NO. 1049/MDS/2016. :- 2 -: 2. FACTS APROPOS ARE THAT ASSESSEE ENGAGED IN MANUFAC TURING AND SALE OF PUMPS AND MOTORS HAD CLAIMED ADDITIONAL DEPRECIATION OF =8,53,07,702/-. AS PER ASSESSEE, ADDITIONAL DEPRECI ATION WAS ON PLANT AND MACHINERY ACQUIRED AND INSTALLED IN PRECEDING Y EARS, WHICH WAS CARRIED FORWARD. LD. ASSESSING OFFICER DID NOT ACC EPT THE CLAIM. ACCORDING TO HIM, SUCH ADDITIONAL DEPRECIATION WAS AVAILABLE ONLY TO NEW PLANT AND MACHINERY ACQUIRED DURING AN YEAR A ND WOULD NOT BE ELIGIBLE FOR SUCH DEPRECIATION SUBSEQUENT YEARS. A S PER LD. ASSESSING OFFICER THE WHOLE OF THE ACTUAL COST OF PLANT AND M ACHINERY ON WHICH ADDITIONAL DEPRECIATION WAS CLAIMED WAS ALLOWED AS DEDUCTION BY VIRTUE OF SEC.32(1) (II)(A) OF THE ACT. LD. ASSESS ING OFFICER ALSO NOTED THAT SIMILAR CLAIMS FOR ASSESSMENT YEARS 2008-09 TO 2010-2011 WERE DISALLOWED AND SUCH DISALLOWANCE WAS SUSTAINED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AS WELL AS THI S TRIBUNAL. HE THUS DISALLOWED THE CLAIM. 3. THE APPEAL OF THE ASSESSEE BEFORE LD. COMMISSIONER OF INCOME TAX (APPEALS) AGAINST DISALLOWANCE OF ADDIT IONAL DEPRECIATION DID NOT MEET WITH ANY SUCCESS. 4. NOW BEFORE US, LD. AUTHORISED REPRESENTATIVE STRON GLY ASSAILING THE ORDERS OF THE LOWER AUTHORITIES SUBMI TTED THAT ADDITIONAL DEPRECIATION WAS AVAILABLE FOR EVERY YEAR TILL THE VALUE OF THE ASSET ITA NO. 1049/MDS/2016. :- 3 -: BECAME NIL. ACCORDING TO HIM, HONBLE KARNATAKA HI GH COURT IN THE CASE OF CIT AND ANOTHER VS. RITTAL INDIA PVT. LTD. 380 ITR 423 HAD HELD THAT BALANCE OF ADDITIONAL DEPRECIATION WHIC H COULD NOT BE CLAIMED IN PARTICULAR ASSESSMENT YEAR DUE TO USE L ESS THAN 180 DAYS COULD BE ALLOWED IN SUBSEQUENT YEARS. 5. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE STRONG LY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS OF THE AUTHORITIES BELOW. ARGUMENT OF THE LD . AUTHORISED REPRESENTATIVE IS THAT BALANCE OF THE DEPRECIATION REMAINING DUE TO RESTRICTION OF ADDITIONAL DEPRECIATION CLAIMED BY THE ASSESSEE, TO 50% OF THE ELIGIBLE AMOUNT, IN THE YEAR IN WHICH A NEW MACHINERY WAS PUT IN USE FOR USING FOR A PERIOD LESS THAN 180 DAYS, COULD BE CLAIMED IN SUBSEQUENT YEAR, BY VIRTUE OF JUDGMENT OF HONBLE K ARNATAKA HIGH COURT IN THE CASE OF RITTAL INDIA PVT. LTD (SUPRA). IN OUR OPINION THERE CAN BE NO QUARREL ON THIS. HOWEVER, LD. ASSESSING OFFICER HAD DISALLOWED THE CLAIM NOT FOR THIS REASON BUT FOR A REASON THAT ASSESSEE WAS CLAIMING ADDITIONAL DEPRECIATION FOR EVERY YEA R AFTER INSTALLATION OF PLANT AND MACHINERY. NEVERTHELESS, ASSESSMENT ORDE R NOR THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) GIVE T HE FULL DETAILS OF THE ADDITIONAL DEPRECIATION CLAIMED BY THE ASSESSEE VIZ WHETHER IT ITA NO. 1049/MDS/2016. :- 4 -: RELATES TO PLANT AND MACHINERY INSTALLED IN THE IMM EDIATE PRECEDING ASSESSMENT YEAR, WHICH WAS USED FOR LESS THAN 180 DAYS OR WHETHER SUCH CLAIM WAS FOR PLANT AND MACHINERY INSTALLED IN EARLIER YEARS. NEEDLESS TO SAY ASSESSEE IS ELIGIBLE TO CLAIM ADDIT IONAL DEPRECIATION ONLY TO THE EXTENT OF THE BALANCE 50% REMAINING OU T OF WHAT WAS ALLOWED IN THE IMMEDIATE PRECEDING YEAR, FOR USE L ESS THAN 180 DAYS. WE SET ASIDE THE ORDER OF THE LOWER AUTHORITIES AND REMIT THE ISSUE REGARDING CLAIM OF ADDITIONAL DEPRECIATION BACK TO THE FILE OF THE LD. ASSESSING OFFICER FOR VERIFICATION OF THE FACTS AND CORRECT APPLICATION OF LAW. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON WEDNESDAY, THE 23 RD DAY OF NOVEMBER, 2016, AT CHENNAI. SD/- SD/- ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER ( ! . '#'$ ) (ABRAHAM P. GEORGE) % / ACCOUNTANT MEMBER #$ / CHENNAI %& / DATED:23 RD NOVEMBER, 2016 KV &' ()*) / COPY TO: 1 . / APPELLANT 3. +,' / CIT(A) 5. )-. / / DR 2. / RESPONDENT 4. + / CIT 6. .01 / GF