ITO, WD-3(3), KOLKATA, Kolkata V. M/s BRGD Ingot Pvt. Ltd., Kolkata

ITA 1050/KOL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1346 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2018
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 16-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: T VARKEY JUDIC IA L M EMBER
• Assessee Lawyers: ARINDAM BHTTACHERJEE RES
• Keywords: Depreciation; Additional depreciation
• Section: 143(3)

Judgement Text

, D , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH D KOLKATA BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND DR.A.L. SAINI, ACCOUNTANT MEMBER ITA NO. 1050 / KOL / 2016 ASSESSMENT YEAR :2009-10 INCOME TAX OFFICER, WARD-3(3), AAYKARBHAWN, 4 TH FLOOR, P-7, CHWRINGHEE SQUARE, KOLKTA-69 V/S . M/S BRGD INGOT PVT. LTD. 4, CHOWRINGHEE LANE, KOLKATA-700 016 [ PAN NO.AACCB 6516 F ] /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI ARINDAM BHTTACHERJEE, ADDL. CIT-DR /BY RESPONDENT NONE /DATE OF HEARING 07-03-2018 /DATE OF PRONOUNCEMENT 16-03-2018 / O R D E R PER DR. A.L. SAINI, ACCOUNTANTMEMBER:- THIS CAPTION APPEAL FILED BY THE REVENUE, PERTAINING TO ASSESSMENT YEAR 2009-10, IS DIRECTED AGAINST AN ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-23, KOLKATA, IN APPEAL NO.108/CIT(A)-23/WD-1(2)/14-15 DATED 01.03.2016, WHICH IN TURN ARISES OUT OF AN ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) DATED 21.12.2011. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS:- ITA NO.1050/KOL/2016 A.Y. 2009-10 ITO WD-3(3) KOL. VS. M/S BRGD INGOT PVT. LTD. PAGE 2 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN ALLOWING THE ADDITIONAL DEPRECIATION OF RS.35,72,816/- U/S 32(1)(IIA) ON ELECTRICAL INSTALLATION IN THE PREVIOUS YEAR AS PART OF PLANT AND MACHINERY. 2. THE REVENUE SHALL ALWAYS CRAVE LEAVE FOR ADDING OR ALTERING ANY GROUND ON OR BEFORE THE DATE OF HEARING. 3.BRIEF FACTS APROPOS THIS ISSUE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER OBSERVED THAT ASSESSEE-COMPANY HAS DEBITED A SUM OF 35,72,816/- AS ADDITIONAL DEPRECIATION ON ACCOUNT OF ELECTRIC INSTALLATION. THE ASSESSEE HAD CLAIMED SEPARATELY ADDITIONAL DEPRECIATION OF 65,91,513/- @ 20% ON PLANT & MACHINERY BESIDES ELECTRIC INSTALLATION. THE ASSESSING OFFICER DISALLOWED THE ADDITIONAL DEPRECIATION CLAIMED BY THE ASSESSEE ON ELECTRIC INSTALLATION TO THE TUNE OF 35,72,816/-. 4.ON APPEAL, LD. CIT(A) DELETED THE ADDITION HOLDING THAT ELECTRIC FITTINGS AND LINING FORMS AN INTEGRAL PART OF PLANT AND MACHINERY.NOT BEING SATISFIED WITH THE ORDER OF LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE US. 5.AT THE TIME OF HEARING NONE APPEARED ON BEHALF OF ASSESSEE IN SPITE OF ISSUANCE OF NOTICE FOR HEARING MORE THAN ONE OCCASION AND LD. DEPARTMENTAL REPRESENTATIVE(DR), WAS PRESENT FOR THE APPELLANT REVENUE. IN THE ABSENCE OF ANY APPEARANCE BY THE ASSESSEE, THE APPEAL IS BEING DISPOSED OF EX PARTE QUA THE ASSESSEE, AFTER HEARING LD. DR FOR THE REVENUE ON MERITS IN TERMS OF RULE 24 OF THE INCOME TAX APPELLATE, TRIBUNAL, 1963. 6.AT THE OUTSET ITSELF, THE LD. DR FOR THE REVENUE POINTED OUT THAT ASSESSEE HAS CLAIMED ADDITIONAL DEPRECIATION ON ELECTRIC FITTINGS WHICH ARE NOT AN INTEGRAL PART OF PLANT AND MACHINERY AND THEREFORE THE ASSESSEE IS NOT ENTITLED TO CLAIM OF ADDITIONAL DEPRECIATION ON EXPENDITURE ON ACCOUNT OF ELECTRIC FITTINGS AND INSTALLATION. THE LD DR POINTED OUT THAT THE ELECTRIC INSTALLATION IS REVENUE ITA NO.1050/KOL/2016 A.Y. 2009-10 ITO WD-3(3) KOL. VS. M/S BRGD INGOT PVT. LTD. PAGE 3 EXPENDITURE AND NOT CONNECTED WITH THE INTEGRAL PART OF PLANT AND MACHINERY. THEREFORE, ADDITIONAL DEPRECIATION ON ELECTRIC INSTALLATION SHOULD NOT BE ALLOWED. THE LD CIT(A) DID NOT ASK A REMAND REPORT FROM THE ASSESSING OFFICER AS TO WHY AND HOW ELECTRIC FITTINGS AND INSTALLATION CAN FORM PART OF PLANT AND MACHINERY. 7.WE HAVE GIVEN A CAREFUL CONSIDERATION TO THE SUBMISSION OF LD. DR FOR THE REVENUE AND GONE THROUGH THE APPELLATE ORDER AS WELL AS ASSESSMENT ORDER PASSED BY AO. WE NOTE THAT THERE IS NO FINDING IN THE ORDER OF LD CIT(A) THAT ELECTRIC INSTALLATION AND ELECTRIC FITTING IS AN INTEGRAL PART OF PLANT AND MACHINERY. THEREFORE, WE DIRECT THE ASSESSING OFFICER TO EXAMINE WHETHER ELECTRIC INSTALLATION EXPENSES ARE AN INTEGRAL PART OF PLANT AND MACHINERY AND IF THESE ARE AN INTEGRAL PART OF PLANT AND MACHINERY THEN AO SHOULD ALLOW THE ADDITIONAL DEPRECIATION THEREON. THEREFORE, WE SET ASIDE THE ORDER PASSED BY LD. CIT(A) AND REMAND THE MATTER BACK TO THE FILE OF ASSESSING OFFICER TO EXAMINE THE ELECTRIC INSTALLATION EXPENSE AS TO WHETHER AND WHY THEY ARE PART OF PLANT AND MACHINERY. THE ASSESSEE IS DIRECTED TO PRODUCE DOCUMENTS AND EXPLANATIONS ABOUT ELECTRIC FITTINGS AND INSTALLATION WHICH ARE INCLUDED IN ITS FINANCIAL STATEMENT TO ESTABLISH THAT ELECTRIC FITTINGS AND INSTALLATION ARE AN INTEGRAL PART PLANT AND MACHINERY AND ELIGIBLE FOR ADDITIONAL DEPRECIATION. 8.IN THE RESULT, APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE AS INDICTED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT 16/03/2018. SD/- SD/- (ABY. T. VARKEY) (DR. A.L. SAINI) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP, SR.P.S - 16/03/2018 ITA NO.1050/KOL/2016 A.Y. 2009-10 ITO WD-3(3) KOL. VS. M/S BRGD INGOT PVT. LTD. PAGE 4 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT- ITO, WARD-3(3) AAYKAR BHAWAN, 4 TH FL, P-7 CHOWRINGHEE SQ. KOL-69 2. /RESPONDENT- M/S BRGD INGOT PVT. LTD., 4, CHOWRINGHEE LANE, KOLKATA-16 3. / CONCERNED CIT KOLKATA 4. - / CIT (A) KOLKATA 5. , , / DR, ITAT, KOLKATA 6. [ / GUARD FILE. BY ORDER/ , SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO ,