Aman Tannery , Kolkata V. ITO, Ward - 29(1), Kolkata, Kolkata

ITA 1057/KOL/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3549 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 18-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Principle of natural justice
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH SMC, KOLKATA BEFORE SH. P.M.JAGTAP, ACCOUNTANT MEMBER ITA NO.1057/KOL/2018 [ASSESSMENT YEAR: 2014-15] ORDER PER P.M.JAGTAP, ACCOUNTANT MEMBER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)- 8, KOLKATA DATED 05.04.2018 AND THE SOLITARY ISSUE INVOLVED THEREIN RELATES TO THE DISALLOWANCE OF THE ASSESSEES CLAIM FOR DEPRECIATION OF RS.33,75,350/-. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUAL WHO IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF TANNERY GOODS. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY HIM ON 27.10.2014 DECLARING A TOTAL INCOME OF RS.1,18,310/-. IN THE SAID RETURN, DEPRECIATION OF RS.33,75,350/- WAS CLAIMED BY THE ASSESSEE @ 100% ON POLLUTION CONTROL EQUIPMENT PURCHASED WITHIN YEAR UNDER CONSIDERATION. IN ORDER TO VERIFY THE CLAIM OF THE ASSESSEE OF HAVING PURCHASED THE POLLUTION CONTROL EQUIPMENT FROM M/S KASA DWELLING PVT. LTD., THE INSPECTOR WAS DEPUTED BY THE AO. IN HIS REPORT SUBMITTED TO THE AO, THE INSPECTOR STATED THAT M/S KASA DWELLING PVT. LTD. WAS NOT AVAILABLE AT THE GIVEN ADDRESS FOR CONFIRMATION. HE ALSO REITERATED THAT NOBODY COULD GIVE HIM ANY INFORMATION ABOUT AMAN TANNERY, 93/1D, TILJALA ROAD, PARK CIRCUS, KOLKATA-700046. PAN-AAKFA7826J VS ITO, WARD-29(1), 54/1, RAFI AHMED KIDWAI ROAD [WELLESLY ROAD], 5 TH FLOOR, KOLKATA-700016. (APPELLANT) (RESPONDENT) APPELLANT BY SH. RAMESH PRASAD AGARWALLA, SR. ADVOCATE & SH. KRISHA KUMAR CHANANI, FCA RESPONDENT BY SH. BISWANATH DAS, ADDL. CIT DATE OF HEARING 14.08.2018 DATE OF PRONOUNCEMENT 21 .08.2018 ITA NO.1057/KOL/2018 [ASSESSMENT YEAR: 2014-15] PAGE | 2 THE EXISTENCE OF SUCH PARTY AT THE GIVEN ADDRESS. WHEN THIS ADVERSE REPORT OF THE INSPECTOR WAS CONFRONTED BY THE AO TO THE ASSESSEE, THE LATTER OFFERED HIS EXPLANATION IN THE MATTER IN WRITING VIDE A LETTER. THE SAID EXPLANATION HOWEVER, WAS NOT FOUND ACCEPTABLE BY THE AO AND THE DEPRECIATION OF RS.33,75,350/- CLAIMED BY THE ASSESSEE ON POLLUTION CONTROL UNIT WAS DISALLOWED BY HIM IN THE ASSESSMENT COMPLETED U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT ACT) VIDE AN ORDER DATED 21.12.2016. 3. AGAINST THE ORDER PASSED U/S 143(3), AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD.CIT(A) AND A COPY OF THE LETTER FILED BEFORE THE AO OFFERING HIS EXPLANATION AS REGARDS THE EXISTENCE OF M/S KASA DWELLING PVT. LTD., A SUPPLIER OF POLLUTION CONTROL UNIT WAS ALSO FILED BY THE ASSESSEE BEFORE LD.CIT(A) IN SUPPORT OF HIS CLAIM FOR DEPRECATION. LD.CIT(A) HOWEVER, DID NOT ACCEPT THE SAME. ACCORDING TO HIM, THE ASSESSEE IN ORDER TO PROVE THE PURCHASE OF POLLUTION CONTROL UNIT SHOULD HAVE FILED THE RELEVANT DOCUMENTARY EVIDENCE IN THE FORM OF SALE BILLS, TECHNICAL DETAILS OF THE ITEMS PURCHASED, INSTALLATION REPORT, PHOTOGRAPHS OF THE SITE, CERTIFICATE FROM THE POLLUTION CONTROL BOARD ETC. AND SINCE NONE OF THESE DOCUMENTS HAD BEEN FURNISHED BY THE ASSESSEE, HE CONFIRMED THE DISALLOWANCE OF DEPRECIATION MADE BY THE AO. AGGRIEVED BY THE ORDER OF LD.CIT(A), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE CLAIM OF THE ASSESSEE FOR DEPRECIATION ON POLLUTION CONTROL UNIT WAS DISALLOWED BY THE AO ON THE BASIS OF THE INSPECTORS REPORT WHEREIN THE EXISTENCE OF THE SUPPLIER OF THE SAID EQUIPMENT AT THE GIVEN ADDRESS WAS DOUBTED. HE HAS SUBMITTED THAT THE ASSESSEE IN ORDER TO ESTABLISH THE EXISTENCE OF THE SAID SUPPLIER AT THE ADDRESS, FILED THE RELEVANT DOCUMENTARY EVIDENCE IN THE FORM OF TRADE LICENSE, PROFESSIONAL ITA NO.1057/KOL/2018 [ASSESSMENT YEAR: 2014-15] PAGE | 3 TAX REGISTRATION CERTIFICATE ETC. BUT THE AO BRUSHED ASIDE THE SAME WITHOUT MAKING ANY COMMENT OR OBSERVATION. HE HAS CONTENDED THAT EVEN LD.CIT(A) FAILED TO APPRECIATE THE SAID EVIDENCE FILED BY THE ASSESSEE TO MEET THE OBJECTION RAISED BY THE AO ABOUT THE VERY EXISTENCE OF THE SUPPLIER AT THE GIVEN ADDRESS AND CONFIRMED THE DISALLOWANCE MADE BY THE AO ON ACCOUNT OF DEPRECIATION ON THE GROUND THAT THE DOCUMENTARY EVIDENCE IN THE FORM OF SALE BILLS, TECHNICAL DETAILS, ENGINEERING INSTALLATION REPORT, PHOTOGRAPHS OF THE SITE, CERTIFICATE FROM THE POLLUTION CONTROL BOARD ETC. WAS NOT FILED BY THE ASSESSEE TO PROVE THE GENUINENESS OF THE PURCHASE OF POLLUTION CONTROL EQUIPMENT. HE HAS CONTENDED THAT LD.CIT(A) HOWEVER, DID NOT AFFORD ANY OPPORTUNITY TO THE ASSESSEE TO FILE THE SAID EVIDENCE DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE HIM. HE HAS CONTENDED THAT THE SAID EVIDENCE IS VERY MUCH AVAILABLE WITH THE ASSESSEE AND URGED THAT AN OPPORTUNITY MAT JUSTIFIABLY BE GIVEN TO THE ASSESSEE TO PRODUCE THE SAME IN SUPPORT OF HIS CLAIM FOR DEPRECIATION BY SENDING THE MATTER BACK TO THE AO FOR VERIFICATION. ALTHOUGH THE LD.DR HAS RAISED AN OBJECTION FOR GIVING ONE MORE OPPORTUNITY TO THE ASSESSEE BY SUBMITTING THAT AO AND LD.CIT(A) HAVE ALREADY GIVEN THE ASSESSEE A SUFFICIENT OPPORTUNITY, I AM INCLINED TO ACCEPT THE REQUEST MADE BY LD. COUNSEL FOR THE ASSESSEE. IT IS OBSERVED THAT THE RELEVANT DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE TO ERASE THE DOUBT RAISED BY THE INSPECTOR REGARDING THE EXISTENCE OF THE SUPPLIER AT THE GIVEN ADDRESS WAS NEITHER CONSIDERED NOR APPRECIATED BY THE AO AND THE SAME WAS BRUSHED ASIDE WITHOUT ANY DISCUSSION. SIMILARLY, LD.CIT(A) FAILED TO APPRECIATE THE SAID EVIDENCE FILED BY THE ASSESSEE TO ESTABLISH THE EXISTENCE OF THE SUPPLIER AT THE GIVEN ADDRESS AND PROCEEDED TO CONFIRM THE DISALLOWANCE MADE BY THE AO ON ACCOUNT OF DEPRECIATION ON THE GROUND THAT THE RELEVANT DOCUMENTARY EVIDENCE TO ESTABLISH THE GENUINENESS OF THE PURCHASE OF POLLUTION CONTROL EQUIPMENT WAS NOT FILED BY THE ASSESSEE. AS RIGHTLY CONTENDED BY LD. COUNSEL FOR THE ASSESSEE, NO OPPORTUNITY HOWEVER, WAS GIVEN BY LD.CIT(A) TO THE ASSESSEE TO FILE SUCH EVIDENCE ITA NO.1057/KOL/2018 [ASSESSMENT YEAR: 2014-15] PAGE | 4 AND THERE IS THUS A CLEAR VIOLATION OF PRINCIPLE OF NATURAL JUSTICE BY LD.CIT(A). SINCE THE SAID EVIDENCE IS AVAILABLE WITH THE ASSESSEE AS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE, I AM OF THE VIEW THAT THE ASSESSEE DESERVES AN OPPORTUNITY TO SUPPORT AND SUBSTANTIATE HIS CLAIM FOR DEPRECIATION BY PRODUCING THE SAME. I THEREFORE, SET ASIDE THE IMPUGNED ORDER PASSED BY LD.CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE AO FOR DECIDING THE ISSUE RELATING TO THE ASSESSEES CLAIM FOR DEPRECIATION ON POLLUTION CONTROL EQUIPMENT, AFTER GIVING A PROPER AND SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO PRODUCE THE RELEVANT DOCUMENTARY EVIDENCE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 21.08.2018. SD/- (P.M.JAGTAP) ACCOUNTANT MEMBER DATE:- 21.08.2018 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT- AMAN TANNERY, 93/1D, TILJALA ROAD, PARK CIRCUS, KOLKATA- 700046. 2. RESPONDENT- ITO, WARD-29(1), 54/1, RAFI AHMED KIDWAI ROAD [WELLESLY ROAD], 5 TH FLOOR, KOLKATA-700016. 3. CIT-KOLKATA 4. CIT(APPEALS)-KOLKATA BENCH 5. DR: ITAT-KOLKATA SR.P.S./H.O.O ITAT, KOLKATA ITA NO.1057/KOL/2018 [ASSESSMENT YEAR: 2014-15] PAGE | 5