ACIT 2(1)(2), MUMBAI V. HINDUSTAN PLATINUM P.LTD, NAVI MUMBAI

ITA 1097/MUM/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 9865 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2006-2007
• Appeal Filed On: 16-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: POOJA SWAROOP
• Assessee Lawyers: HEENA DOSHI
• Keywords: Depreciation; Additional depreciation
• Section: 32; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH H MUM BAI BEFORE SH. G.S. PANNU ACCOUNTANT MEMBER AND SH.PAWAN SINGH JUDICIAL MEMBER ITA NO.1097/MUM/2017 (A.Y. 2006-07) ACIT,2(1). ROOM NO.561, 5 TH FLOOR, AAYKAR BHAVAN M.K.ROAD, MUMBAI - 20 VS. HINDUSTAN PLATINUM PVT. LTD., C-12, TTC INDUSTRIAL AREA, PAWANE, NAVI MUMBAI 400 703. PAN:AAACH 1111J APPELLANT RESPONDENT APPELLANT BY : MS POOJA SWAROOP SR DR RESPONDENT BY : MS. HEENA DOSHI AR DATE OF HEARING : 12.07.2018 DATE OF PRONOUNCEMENT : 26.09.2018 ORDER UNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. THIS APPEAL BY REVENUE IS DIRECTED AGAINST THE ORDE R OF COMMISSIONER (APPEALS)-3, MUMBAI, DATED 25 TH NOVEMBER 2016, WHICH IN TURN ARISES FROM THE ASSESSMENT ORDER PASSED UNDER SECTION 143( 3) READ WITH SECTION 147 DATED 18 TH FEBRUARY 2014. THE REVENUE HAS RAISED FOLLOWING GR OUNDS OF APPEAL; (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LEARNED COMMISSIONER (APPEALS) ERRED IN HOLDING THAT THE AS SESSEE WAS ENTITLED FOR DEPRECIATION ON 31.03.2005 WHEN THE ASSESSEE HAD NO T ACTUALLY USED THE MACHINERY AS REQUIRED BY SECTION 32 OF INCOME TAX A CT, AND IS UPHELD IN THE CASE OF THE GULABCHAND AGGARWAL VERSUS CIT [267 ITR 768(BOMBAY)] 2. AT THE OUTSET OF HEARING THE LEARNED AUTHORIZED REP RESENTATIVE (AR) OF ASSESSEE SUBMITS THAT THOUGH THE GROUND OF APPEAL R AISED BY REVENUE IS NOT ITA NO.1097/M/2017 HINDUSTAN PLATINUM P LTD 2 HAPPILY WORDED AND DOES NOT BRING OUT THE PROPER CO NTROVERSY, BUT THE LD CIT(A) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSES SEE AND AGAINST THE REVENUE BY FOLLOWING THE DECISION OF TRIBUNAL IN A SSESSEES OWN CASE FOR ASSESSMENT YEAR 2005-06 IN ITA NO.3352/M/2010 DATED 15.06.2011. THE LD. AR OF THE ASSESSEE FURNISHED THE COPY OF ORDER OF TRIBUNAL. 3. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REPRESEN TATIVE (DR) FOR THE REVENUE RELIED OF UPON THE ORDER OF ASSESSING OFFIC ER. THE LD. DR FURTHER SUBMITS THAT THE BENEFIT OF ADDITIONAL DEPRECIATION HAS BEEN MADE AVAILABLE FOR THE BUSINESS OF GENERATION OR GENERATION AND DI STRIBUTION OF POWER ONLY AFTER THE AMENDMENT PROVIDED IN THE FINANCE ACT 201 2 WITH EFFECT FROM 01.042013. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PART IES AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WE HAVE NO TED THAT SIMILAR DISALLOWANCE WAS MADE BY ASSESSING OFFICER FOR ASSE SSMENT YEAR 2005-06, ON APPEAL BEFORE COMMISSIONER (APPEALS) THE DISALLO WANCE WAS CONFIRMED. HOWEVER, ON APPEAL BEFORE TRIBUNAL THE A SSESSEE WAS ALLOWED ADDITIONAL DEPRECIATION. WE HAVE FURTHER NOTED THAT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION I.E. ASSESSMENT YEAR 2006-07, T HE ASSESSING OFFICER AGAIN DISALLOWED ADDITIONAL DEPRECIATION CLAIMED BY THE ASSESSEE. THE LD. COMMISSIONER (APPEALS) BY FOLLOWING THE DECISION OF TRIBUNAL IN APPEAL ITA NO.1097/M/2017 HINDUSTAN PLATINUM P LTD 3 FOR ASSESSMENT YEAR 2005-06, ALLOWED THE RELIEF TO THE ASSESSEE. THE COORDINATE BENCH OF TRIBUNAL PASSED THE FOLLOWING O RDER: 13. WE HAVE CONSIDERED THE RIVAL SUBMISSION. IT IS CLEAR FROM THE DOCUMENTS FILED BY THE ASSESSEE THAT THE WIND MILLS WERE INST ALLED AND COMMISSIONED ON 31/3/2005. THE CERTIFICATE OF TNEB IN THIS REGARD C LEARLY ESTABLISHES THIS FACT. EVEN THE REVENUE DOES NOT DISPUTE THIS FACT. THE QU ESTION IS WHETHER INSTALLATION AND COMMISSIONING OF THE WEGS IS SUFFI CIENT TO HOLD THAT THE WEGS WERE USED FOR THE PURPOSE OF BUSINESS DURING T HE PREVIOUS YEAR SO AS TO ENABLE THE ASSESSEE TO CLAIM DEPRECIATION ON WEG. O N THIS ISSUE THE LD. COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE ON CER TAIN JUDICIAL PRONOUNCEMENTS. IN THE CASE OF OMKAR TESTILE MILLS PVT. LTD. VS. ITO (2008) 5 DTR (AHD) (TRIB) 187 THE ISSUE WITH REGARD TO ALL OWING DEPRECIATION ON WIND MILL HAD COME UP FOR CONSIDERATION. THE ASSESS EE HAD RELIED ON THE CERTIFICATE OF GUJARAT ENERGY DEVELOPMENT AGENCY CE RTIFYING COMMISSIONING OF WIND MILLS. A TEST RUN WAS ALSO UNDERTAKEN. THE ASSESSMENT YEAR INVOLVED WAS 1995-96 AND THE TEST RUN WAS DONE ON 27/3/1995. THE QUESTION OF ALLOWING DEPRECIATION ON THE ABOVE FACTS WAS CONSID ERED BY THE TRIBUNAL. THE TRIBUNAL HELD THAT THE COMMISSIONING AND TEST RUN W OULD BE SUFFICIENT TO HOLD THAT THE WIND MILLS WAS USED FOR THE PURPOSE OF BUS INESS 7 ITA NO.3352/MUM/2010(A.Y. 2005-06) AND THE ASSESSEE WAS ENTITLED TO CLAIM DEPRECIATION. THE MUMBAI BENCH OF ITAT IN THE CASE OF GODAVRI CORPORATION PVT. LTD. VS. ITO ITA MP/309/M/08, A.Y 2002-03 ORDE R DATED 15/4/2009 HAD OCCASION TO CONSIDER A CLAIM FOR DEPRECIATION ON AC COUNT OF USE OF WIND MILLS. THE TRIBUNAL FIRSTLY NOTICED THAT THERE WAS EVIDENC E TO SHOW THAT THERE WAS INSTALLATION AND COMMISSIONING OF WIND MILLS ON 30/ 3/2002. THEREAFTER THE TRIBUNAL ALSO HELD AS FOLLOWS: '14. IN ACIT VS. ASHIMA SYNTEX LTD. (2201) 251 ITR 133 (GUJ), IT HAS BEEN HELD AT PAGE 133 HEAD NOTE: '......... EVEN TRIAL PRODUCTION OF A MACHINERY WOU LD FALL WITHIN THE AMBIT OF 'USED FOR THE PURPOSE OF BUSINESS'. FURTHER, AS THE STATUTE DOES NOT PRESCRIBE THE MINIMUM TIME LIMIT FOR 'USE' OF THE M ACHINERY, THE ASSESSEE CANNOT BE DENIED THE BENEFIT OF DEPRECIATION ON THE GROUND THAT THE MACHINERY WAS USED FOR A VERY SHORT DURATION FOR TR IAL RUN.' 15. IN CIT VS. UNION CARBIDE (I) LTD . [2002] 254 ITR 488 (CAL) IT HAS BEEN HELD AT PAGE 489 [HEAD NOTE] '...... THUS , THE TRI AL PRODUCTION WAS QUITE SUFFICIENT TO CLAIM BOTH DEPRECIATION AND INVESTMEN T ALLOWANCE.' 16. IN OMKAR TEXTILE MILLS (P) LTD. VS. ITO [2008] 115 TTJ (AH. TRIBUNAL] 716 . IT HAS BEEN HELD THAT IN VIEW OF CERTIFICATE OF GUJARAT ENERGY DEVELOPMENT AGENCY [GEDA], SALES TAX EXEMPTION CERT IFICATE, ELIGIBILITY CERTIFICATE, COMMISSIONING CERTIFICATE AND QUICK TE ST REPORT ISSUED BY DEDA AND LETTER OF NEPC-MICON EVIDENCING THAT WIND TURBINE GENERATING SET WAS COMMISSIONED ON 27TH MARCH, 1995 AND TEST RUN WAS ALSO UNDERTAKEN, THE ASSESSEE WAS ENTITLED TO DEPRE CIATION. ITA NO.1097/M/2017 HINDUSTAN PLATINUM P LTD 4 17. IN THE LIGHT OF THE ABOVE DOCUMENTARY EVIDENCES AND THE RATIO OF ABOVE DECISIONS, WE ARE OF THE VIEW THAT THE ASSESSEE IS ENTITLED TO DEPRECIATION ON THE WINDMILL IN ACCORDANCE WITH LAW. THE AO IS DIRE CTED TO ALLOW THE CLAIM OF THE ASSESSEE. ACCORDINGLY THE GROUNDS TAKEN BY T HE ASSESSEE ARE PARTLY ALLOWED.' IN THE LIGHT OF THE ABOVE PRECEDENTS AND CONSIDERIN G THE FACTS OF THE PRESENT CASE, WE ARE OF THE VIEW THAT THE ASSESSEE WAS ENTI TLED TO DEPRECIATION. WE ARE ALSO OF THE VIEW THAT THE ADMISSION BY THE MANAGING DIRECTOR IN THE STATEMENT U/S.131 OF THE ACT, THAT THE ASSESSEE WAS NOT ENTIT LED TO 8 ITA NO.3352/MUM/2010(A.Y. 2005-06) DEPRECIATION, CANNOT BE THE BASIS ON WHICH THE DISALLOWANCE OF DEPRECIATION CAN BE SUSTA INED. THE LAW IS WELL SETTLED THAT ADMISSIONS ARE NOT CONCLUSIVE AND THE PERSON WHO MADE THE ADMISSION IS ENTITLED TO SHOW THAT THE ADMISSION WA S MADE EITHER UNDER A MISTAKE OR MISAPPREHENSION. WE ARE OF THE VIEW THAT IN THE LIGHT OF THE DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE, THE ADM ISSION BY THE ASSESSEE WAS ERRONEOUS. THE CLAIM FOR DEPRECIATION HAS TO BE ALLOWED IF THE CONDITIONS PRESCRIBED IN LAW ARE SATISFIED. WE THEREFORE HOLD THAT ADMISSION BY THE ASSESSEE CANNOT BE THE BASIS TO SUSTAIN THE DISALLO WANCE OF DEPRECIATION. IN THE CIRCUMSTANCES, WE DIRECT THE ASSESSING OFFICER TO ALLOW THE CLAIM OF THE ASSESSEE. THUS GROUND NO.1 RAISED BY THE ASSESSEE I S ALLOWED. 5. CONSIDERING THE DECISION OF TRIBUNAL, WE ARE OF THE VIEW THAT THE GROUND OF APPEAL RAISED BY THE VENUE IS COVERED IN FAVOUR OF ASSESSEE AND AGAINST THE REVENUE. NO CONTRARY FACTS OR LAW IS BROUGHT TO OUR NOTICE TO TAKE A CONTRARY VIEW. IN THE RESULT THE GROUND OF APPEAL R AISED BY REVENUE IS DISMISSED. 6. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 26 TH DAY OF SEPTEMBER 2018 IN THE OPEN COURT. SD/- SD/- (G.S. PANNU) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 26/09/2018 S.K.PS ITA NO.1097/M/2017 HINDUSTAN PLATINUM P LTD 5 COPY OF THE ORDER FORWARDED TO : BY ORDER, ((ASSTT.REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/