M/s. Madras Cements Ltd., CHENNAI V. JCIT, Madurai

ITA 1121/CHNY/2001

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4936 (ITAT-CHENNAI)
• Duration Of Justice: 15 year(s) 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 13-03-2017
• Assessment Year: 1997-1998
• Appeal Filed On: 16-07-2001
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MDS
• Assessee Lawyers: V JAGADISAN
• Keywords: Depreciation; Revenue expenditure; Capital expenditure

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.1197/MDS/2006 ( )( / ASSESSMENT YEAR : 2002-03 ./ ITA NO.1121/MDS/2001 ( )( / ASSESSMENT YEAR : 1997-98 M/S MADRAS CEMENTS LTD., C/O JAGADISAN & CO., CHARTERED ACCOUNTANTS, #245, T.T.K. ROAD, RESIDENCY APARTMENTS, ALWARPET, CHENNAI - 600 018. PAN : AABCM 8375 L V. 1. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE I, VIRUDHUNAGAR. 2. THE JOINT COMMISSIONER OF INCOME TAX, SPECIAL RANGE I, MADURAI. (+,/ APPELLANT) (-.+,/ RESPONDENT) ./ ITA NO.1111/MDS/2001 ( )( / ASSESSMENT YEAR : 1997-98 ./ ITA NO.1553/MDS/2006 ( )( / ASSESSMENT YEAR : 2002-03 1. THE JOINT COMMISSIONER OF INCOME TAX, SPECIAL RANGE I, MADURAI. 2. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE I, VIRUDHUNAGAR. V. M/S MADRAS CEMENTS LTD., C/O JAGADISAN & CO., CHARTERED ACCOUNTANTS, #245, T.T.K. ROAD, RESIDENCY APARTMENTS, ALWARPET, CHENNAI - 600 018. (+,/ APPELLANT) (-.+,/ RESPONDENT) (/0 1 2 /ASSESSEE BY : SHRI V. JAGADISAN, CA 3 1 2 /REVENUE BY : SH. PATHLAVATH PEERYA, CIT 2 I.T.A. NOS.1197 & 1553/MDS/2006 I.T.A. NOS.1121 & 1111/MDS/ 2001 4 1 0% / DATE OF HEARING : 13.03.2017 5') 1 0% / DATE OF PRONOUNCEMENT : 07.04.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: BOTH ASSESSEE AND REVENUE HAVE FILED APPEALS AGA INST THE RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS), MADURAI, FOR THE ASSESSMENT YEARS 1997-98 AND 2002- 03. SINCE COMMON ISSUES ARISE FOR CONSIDERATION IN ALL THESE APPEALS, WE HEARD THESE APPEALS TOGETHER AND DISPOSING OF THE S AME BY THIS COMMON ORDER. 2. LETS FIRST TAKE REVENUES APPEAL FOR THE ASSESS MENT YEAR 1997-98 IN I.T.A. NO.1111/MDS/2001. 3. THE FIRST ISSUE ARISES FOR CONSIDERATION IS 100% DEPRECIATION ON FLY ASH HANDLING SYSTEM. 4. WE HAVE HEARD SHRI V. JAGADISAN, THE LD. REPRES ENTATIVE FOR THE ASSESSEE AND SH. PATHLAVATH PEERYA, THE LD. DEP ARTMENTAL REPRESENTATIVE. IT IS ADMITTED BY BOTH THE LD. REP RESENTATIVE AND THE LD. D.R. THAT THIS ISSUE WAS CONSIDERED BY THIS TRIBUNAL IN THE ASSESSEE'S OWN CASE FOR ASSESSMENT YEAR 1996-97 IN I.T.A. NO.872/MDS/2000. THIS TRIBUNAL BY ITS ORDER DATED 26.12.2002, 3 I.T.A. NOS.1197 & 1553/MDS/2006 I.T.A. NOS.1121 & 1111/MDS/ 2001 FOUND THAT IN ORDER TO PREVENT AIR POLLUTION, THE A SSESSEE HAS INSTALLED FLY ASH HANDLING SYSTEM. THIS BEING AN A IR POLLUTION CONTROL EQUIPMENT, THIS TRIBUNAL FOUND THAT THE ASSESSEE IS ENTITLED FOR 100% DEPRECIATION. IN VIEW OF THE DECISION OF CO-O RDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEE'S OWN CASE FOR ASSESS MENT YEAR 1996- 97, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFE RE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CON FIRMED. 5. THE NEXT ISSUE ARISES FOR CONSIDERATION IS COST OF CONSTRUCTION INCURRED BY THE ASSESSEE FOR CONSTRUCTION OF VALLAL AR CAUSE WAY. 6. SH. PATHLAVATH PEERYA, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE-COMPANY ENGAGED ITSELF IN THE BUSINESS OF MANUFACTURING AND SALE OF CEMENT. THE FACTORY OF THE ASSESSEE WAS SITUATED IN VRIDACHALAM -TITTAGUDI ROAD. ACCORDING TO THE LD. D.R., VRIDACHALAM-TITTAGUDI RO AD WAS A KUTCHA ROAD AND NOT FIT FOR TRANSPORTATION OF HEAVY MACHINERIES. IN ORDER TO FACILITATE THE TRANSPORT OF MACHINERIES IN A SMOOTH WAY, THE ASSESSEE APPEARS TO HAVE CONSTRUCTED A NEW ROAD THR OUGH A SMALL RIVER CALLED VELLAR WITH A SPAN OF 400 METERS. ACC ORDING TO THE LD. D.R., IT IS NOT THE BUSINESS OF THE ASSESSEE TO CON STRUCT ROAD OR CAUSE WAY. THE BUSINESS OF THE ASSESSEE IS MANUFA CTURING OF 4 I.T.A. NOS.1197 & 1553/MDS/2006 I.T.A. NOS.1121 & 1111/MDS/ 2001 CEMENT. THE CAUSE WAY CONSTRUCTED BY THE ASSESSEE DOES NOT BELONG TO ASSESSEE-COMPANY. MOREOVER, ACCORDING TO THE LD. D.R., THE CAUSE WAY BRINGS INTO EXISTENCE ENDURING BENEFI T TO THE ASSESSEE FOR TRANSPORTING THE MACHINERY, RAW MATERI AL OR FINISHED PRODUCT. THE APPROACH ROAD TO THE COMPANY BEFORE C ONSTRUCTION OF NEW ROAD, NAMELY, VRIDACHALAM-TITTAGUDI ROAD, WAS O NLY 75 KMS. THE NEW ROAD CONSTRUCTED BY THE ASSESSEE FROM VRIDA CHALAM- PENNADAM-ALATHIYUR IS COVERING DISTANCE OF 27 KMS. THE NEW ROAD, THEREFORE, ACCORDING TO THE LD. D.R., REDUCED THE D ISTANCE OF ASSESSEE BY 48 KMS. SINCE THE CONSTRUCTION OF NEW ROAD BRINGS INTO EXISTENCE ENDURING BENEFIT TO THE ASSESSEE OVE R A PERIOD OF TIME, ACCORDING TO THE LD. D.R., THE ASSESSING OFFI CER TREATED THE SAME AS CAPITAL EXPENDITURE AND DISALLOWED THE CLAI M OF THE ASSESSEE. HOWEVER, THE CIT(APPEALS) ALLOWED THE CL AIM OF THE ASSESSEE ON THE GROUND THAT THERE WAS BUSINESS NECE SSITY OF THE ASSESSEE TO CONSTRUCT CAUSE WAY OVER VELLAR RIVER. ACCORDING TO THE LD. D.R., SINCE IT IS AN EXPENDITURE FOR CREATION O F ASSET WHICH BRINGS ENDURING BENEFIT TO THE ASSESSEE, THE CIT(APPEALS) IS NOT JUSTIFIED IN ALLOWING THE CLAIM OF THE ASSESSEE. 7. ON THE CONTRARY, SHRI V. JAGADISAN, THE LD. REP RESENTATIVE FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSEES FAC TORY WAS 5 I.T.A. NOS.1197 & 1553/MDS/2006 I.T.A. NOS.1121 & 1111/MDS/ 2001 CONSTRUCTED IN THE YEAR 1996. FOR SETTING UP OF FA CTORY, THE ASSESSEE HAS TO MOVE HEAVY MACHINERIES BY ROAD. TH E WEIGHT OF EACH MACHINERY COMES TO NEARLY 500 TO 600 TONS. EA CH PART OF MACHINERY WAS NOT LESS THAN 75 TONS. IN FACT, THE MACHINERIES ARE IMPORTED AND THIS WAS TRANSFERRED TO FACTORY FROM C HENNAI PORT BY ROAD. ACCORDING TO THE LD. REPRESENTATIVE, SINCE T HE APPROACH ROAD TO THE FACTORY VIA VRIDACHALAM-TITTAGUDI IS NOT PRO PER AND IT IS UNFIT FOR CONSTRUCTION, IN ORDER TO FACILITATE ASSESSEES MOVEMENT OF MACHINERY AND RAW MATERIAL, THE ASSESSEE HAS CONSTR UCTED 400 MTS LONG CAUSE WAY ACROSS VELLAR RIVER. IN FACT, THE L AND FOR CONSTRUCTION OF ROAD WAS PURCHASED FROM LOCAL VILLAGERS AND THE EXPENDITURE WAS INCURRED BY THE ASSESSEE. ACCORDING TO THE LD. REP RESENTATIVE, IT IS A PUBLIC ROAD. IT IS MEANT FOR USE OF ALL THE PUBL IC. THE ROAD DOES NOT BELONG TO THE ASSESSEE AT ALL. EVEN OTHERWISE, BY CONSTRUCTION OF NEW CAUSE WAY, ACCORDING TO THE LD. REPRESENTATI VE, THE DISTANCE WAS REDUCED BY 48 KMS. IN FACT, THE ROAD WAS CONSTR UCTED UNDER THE TECHNICAL SUPERVISION AND GUIDANCE OF GOVERNMENT AU THORITIES. THE RAILWAY AUTHORITIES ALSO CLEARED THE PROPOSAL OF TH E ASSESSEE FOR CONSTRUCTION OF CAUSE WAY. THE PROPERTY DOES NOT B ELONG TO THE ASSESSEE AT ALL. 6 I.T.A. NOS.1197 & 1553/MDS/2006 I.T.A. NOS.1121 & 1111/MDS/ 2001 8. REFERRING TO THE GROUNDS OF APPEAL, THE LD. REPR ESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE REVENUE ADMITS AT G ROUND NO.2.4 THAT THE CAUSE WAY DOES NOT BELONG TO THE ASSESSEE- COMPANY. WHEN THE CAUSE WAY DOES NOT BELONG TO THE ASSESSEE- COMPANY, ACCORDING TO THE LD. REPRESENTATIVE, THE ASSESSEE I S NOT GETTING ANY ENDURING BENEFIT. THE ASSESSEE IS USING THE CAUSE WAY ALONG WITH OTHER GENERAL PUBLIC FOR THE PURPOSE OF BUSINESS. CONSTRUCTION OF CAUSE WAY MIGHT HAVE INCIDENTALLY BENEFITTED THE LO CAL RESIDENTS. HOWEVER, ACCORDING TO THE LD. REPRESENTATIVE, SUCH AN INCIDENTAL BENEFIT TO THE GENERAL PUBLIC CANNOT BE A REASON FO R DISALLOWING THE CLAIM OF THE ASSESSEE. THE VERY FACT THAT THE CAUS E WAY DOES NOT BELONG TO THE ASSESSEE AND AS ONE OF THE PUBLIC, TH E ASSESSEE CAN ALSO HAVE ACCESS TO THE CAUSE WAY, ACCORDING TO THE LD. REPRESENTATIVE, THE COST OF CONSTRUCTION OF CAUSE W AY CANNOT BE CONSTRUED AS CAPITAL EXPENDITURE. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. FOR THE PURPOSE OF FACILITATING THE ASSESSEES MOVEMENT OF MACHINER IES, RAW MATERIAL AND FINISHED GOODS, THE ASSESSEE HAS CONSTRUCTED 40 0 MTS LONG CAUSE WAY ACROSS VELLAR RIVER. THE ASSESSEE CLAIMS THE EXPENDITURE AS REVENUE IN NATURE. HOWEVER, THE ASS ESSING OFFICER 7 I.T.A. NOS.1197 & 1553/MDS/2006 I.T.A. NOS.1121 & 1111/MDS/ 2001 DISALLOWED THE SAME TREATING IT AS CAPITAL EXPENDIT URE. ADMITTEDLY, THE CAUSE WAY DOES NOT BELONG TO THE ASSESSEE. IT IS A ROAD TO ALL THE GENERAL PUBLIC ACROSS THE STATE. MOREOVER, THE CONSTRUCTION OF CAUSE WAY MIGHT HAVE INCIDENTALLY BENEFITTED THE LO CAL PEOPLE. HOWEVER, IT MEANT FOR THE BUSINESS OF THE ASSESSEE. THE ASSESSEE CANNOT HAVE ANY EXCLUSIVE RIGHT ON THE CAUSE WAY WH ICH WAS CONSTRUCTED ACROSS A RIVER. IN THOSE CIRCUMSTANCES , THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE EXPENDITURE INCU RRED BY THE ASSESSEE ON THE CAUSE WAY ACROSS VELLAR RIVER HAS T O BE TREATED AS REVENUE EXPENDITURE, THEREFORE, THE CIT(APPEALS) HA S RIGHTLY ALLOWED THE CLAIM OF THE ASSESSEE. THIS TRIBUNAL D O NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUT HORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 10. THE NEXT GROUND OF APPEAL IS WITH REGARD TO COS T OF REPLACEMENT OF ROTOR AS REVENUE EXPENDITURE. 11. SH. PATHLAVATH PEERYA, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT ROTOR IS AN INDEPEND ENT MACHINERY AND IT IS NOT AN INTEGRAL PART OF CRUSHER, THEREFOR E, THE EXPENDITURE INCURRED BY THE ASSESSEE HAS TO BE CAPITALIZED. 8 I.T.A. NOS.1197 & 1553/MDS/2006 I.T.A. NOS.1121 & 1111/MDS/ 2001 12. ON THE CONTRARY, SHRI V. JAGADISAN, THE LD. REP RESENTATIVE FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSEE INCURRED AN EXPENDITURE OF ` 94,14,000/- TOWARDS REPLACEMENT OF ROTOR. THE CIT( APPEALS) INSPECTED THE SITE AND FOUND THAT ROTOR IS ATTACHED TO A SHAFT, WHICH IS RUN BY AN ELECTRIC MOTOR IN A CRUSHER. ACCORDIN G TO THE LD. REPRESENTATIVE, THE CIT(APPEALS) FOUND THAT ROTOR B Y ITSELF HAS NO INDEPENDENT EXISTENCE AND DOES NOT PERFORM ANY FUNC TION PER SE. THE ROTOR WHEN IT IS ATTACHED WITH MOTOR, IT CRUSHE S THE LIMESTONE. THEREFORE, ACCORDING TO THE LD. REPRESENTATIVE, THE CIT(APPEALS) HAS RIGHTLY ALLOWED THE CLAIM OF THE ASSESSEE. 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE MAIN CONTENTION OF THE LD. D.R. IS ROTOR IS AN INDEPENDE NT MACHINERY AND NOT AN INTEGRAL PART OF CRUSHER. THE CIT(APPEALS), AFTER INSPECTING THE PREMISES OF THE ASSESSEE, FOUND THAT ROTOR IS A TTACHED TO A SHAFT WHICH IS RUN BY AN ELECTRIC MOTOR IN A CRUSHE R. THE CIT(APPEALS) FURTHER FOUND THAT ROTOR ITSELF CANNOT DO ANY INDEPENDENT FUNCTION. WHEN IT IS ATTACHED WITH CRU SHER, IT CRUSHES THE LIMESTONE. IT IS NOT IN DISPUTE THAT REPLACEME NT OF ROTOR IN THE CRUSHER HAS TO BE MADE IN FREQUENT INTERVALS. IN T HOSE 9 I.T.A. NOS.1197 & 1553/MDS/2006 I.T.A. NOS.1121 & 1111/MDS/ 2001 CIRCUMSTANCES, THIS TRIBUNAL IS OF THE CONSIDERED O PINION THAT THE ROTOR, WHICH WAS REPLACED IN THE CRUSHING MACHINERY IS NOTHING BUT A PART OF CRUSHER, THEREFORE, COST OF SUCH REPLACEM ENT HAS TO BE ALLOWED AS REVENUE IN NATURE. THEREFORE, THIS TRIB UNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 14. NOW COMING TO REVENUES APPEAL FOR ASSESSMENT Y EAR 2002- 03 IN I.T.A. NO.1553/MDS/2006, THE ONLY ISSUE ARISE S FOR CONSIDERATION IS EXPENDITURE INCURRED BY THE ASSESS EE IN RAILWAY SIDING. 15. SH. PATHLAVATH PEERYA, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE EXPENDITURE INCU RRED BY THE ASSESSEE IN RAILWAY SIDING WAS CLAIMED BY THE ASSES SEE AS REVENUE EXPENDITURE. ACCORDING TO THE LD. D.R., TH E CONVERSION OF METER GUAGE INTO BROAD GUAGE HAS BROUGHT INTO EXIST ENCE ENDURING BENEFIT TO THE ASSESSEE, THEREFORE, IT IS CAPITAL I N NATURE. HENCE, ACCORDING TO THE LD. D.R., THE CIT(APPEALS) IS NOT JUSTIFIED IN ALLOWING THE CLAIM OF THE ASSESSEE. 16. ON THE CONTRARY, SHRI V. JAGADISAN, THE LD. REP RESENTATIVE FOR THE ASSESSEE, SUBMITTED THAT AN IDENTICAL ISSUE WAS CONSIDERED BY 10 I.T.A. NOS.1197 & 1553/MDS/2006 I.T.A. NOS.1121 & 1111/MDS/ 2001 THIS TRIBUNAL IN THE ASSESSEE'S OWN CASE FOR ASSESS MENT YEARS 1996-97, 1993-94, 1994-95 IN I.T.A. NO.872/MDS/2000 , 1960 & 2074/MDS/97 AND 2152/MDS/97 DATED 26.12.2002. THIS TRIBUNAL FOUND THAT A SIMILAR EXPENDITURE IS REVENUE EXPENDI TURE. REFERRING TO THE GROUNDS OF APPEAL RAISED BY THE REVENUE BEFO RE THIS TRIBUNAL AS GROUND NO.3, THE LD. REPRESENTATIVE SUBMITTED TH AT MERELY BECAUSE AN APPEAL IS PENDING BEFORE THE HIGH COURT THAT CANNOT BE A REASON FOR TAKING A DIFFERENT VIEW. 17. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSEE HAS INCURRED EXPENDITURE FOR CONVERSION OF METER GU AGE INTO BROAD GUAGE ELECTRIFICATION OF RAILWAY LINE, ARRANGING FE EDER SERVICE AND CONSTRUCTION OF SUB-ELECTRICAL STATION. THEREFORE, THE EXPENDITURE INCURRED BY THE ASSESSEE MIGHT HAVE FACILITATED THE ASSESSEE TO RUN THE BUSINESS IN A SMOOTH MANNER. THE FACT REMAINS THAT THESE ARE PUBLIC INFRASTRUCTURE MEANT FOR RAILWAYS. ANY PUBL IC ALONG WITH THE ASSESSEE MAY USE THE VERY SAME FACILITIES ESTABLISH ED BY THE ASSESSEE. IT IS NOT THE CASE OF THE REVENUE THAT T HE INFRASTRUCTURE CREATED BY THE ASSESSEE EXCLUSIVELY BELONGS TO THE ASSESSEE. MOREOVER, ON IDENTICAL CIRCUMSTANCES, THIS TRIBUNA L FOR THE ASSESSMENT YEARS 1993-94, 1994-95 AND 1996-97, DECI DED THE 11 I.T.A. NOS.1197 & 1553/MDS/2006 I.T.A. NOS.1121 & 1111/MDS/ 2001 ISSUE IN FAVOUR OF THE ASSESSEE. IN THOSE CIRCUMST ANCES, THE CIT(APPEALS) HAS RIGHTLY FOLLOWED THE ORDER OF THIS TRIBUNAL. THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH T HE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CONFIRM ED. 18. BOTH THE APPEALS OF THE REVENUE STAND DISMISSED . 19. NOW COMING TO THE ASSESSEES APPEALS FOR ASSESS MENT YEARS 1997-98 AND 2002-03, THE ONLY ISSUE ARISES FOR CONS IDERATION IS DEPRECIATION CLAIMED BY THE ASSESSEE ON THE SURFACE MINOR. 20. SHRI V. JAGADISAN, THE LD. REPRESENTATIVE FOR T HE ASSESSEE, SUBMITTED THAT IN LIMESTONE MINES, LIMESTONE STRATA ARE INTRUDED WITH CLAY BANDS. THE LIMESTONE BANDS ARE LYING AT VARIO US DEGREE OF CLAY INTRUSION. LIMESTONE CANNOT BE MINED IN A CONVENTI ONAL METHOD OF DRILLING AND BLASTING THE LIMESTONE STRATA. BLASTI NG OF LIMESTONE MINES WOULD MIX UP WITH CLAY AND LIMESTONE. THE AS SESSEE MAY NOT BE ABLE TO GET THE REQUIRED QUALITY OF LIMESTON E. ALTERNATIVELY, THE ASSESSEE IS USING THE LATEST TECHNOLOGY OF EXCA VATING THE LIMESTONE LAYER BY LAYER. ACCORDING TO THE LD. REP RESENTATIVE, SURFACE MINING IS ONE OF THE LATEST TECHNIQUE WHICH PROVIDES FOR REMOVING THE LAYER BY LAYER AVOIDING MIXING OF LIME STONE WITH CLAY. THE ASSESSEE IS USING SURFACE MINING MACHINE IN THE MINE AND 12 I.T.A. NOS.1197 & 1553/MDS/2006 I.T.A. NOS.1121 & 1111/MDS/ 2001 CLAIM DEPRECIATION AT THE RATE OF 100%. THE ASSESS ING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT IT IS NOT SOLID WASTE CONTROL EQUIPMENT. ACCORDING TO THE LD . REPRESENTATIVE, IT IS ENTITLED FOR DEPRECIATION AS PER APPENDIX 1 P ART (A) OF DEPRECIATION SCHEDULE. THE LD. REPRESENTATIVE FURT HER SUBMITTED THAT BY USING SURFACE MINING TECHNIQUE, THE ASSESSE E WAS SELECTIVELY ABLE TO MINE THE LIMESTONE. USE OF SUR FACE MINER IN EXCAVATION OF LIMESTONE RESULTS IN TOTAL RECOVERY O F LIMESTONE WITHOUT ANY WASTE. THEREFORE, ACCORDING TO THE LD. REPRESE NTATIVE, THE ASSESSEE IS ENTITLED FOR 100% DEPRECIATION. 22. ON THE CONTRARY, SH. PATHLAVATH PEERYA, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT SURFACE MINER IS NOTHING BUT MACHINERY USED FOR EXCAVATION OF LIMEST ONE LAYER BY LAYER. REFERRING TO ORDER OF THE CIT(APPEALS), MOR E PARTICULARLY AT PAGE 4, FOR THE ASSESSMENT YEAR 2002-03, THE LD. D. R. SUBMITTED THAT THE CIT(APPEALS) REPRODUCED THE DEPRECIATION S CHEDULE. AS PER THIS DEPRECIATION SCHEDULE, WHAT IS ENTITLED FO R 100% DEPRECIATION IS NOTHING BUT A SOLID WASTE CONTROL E QUIPMENT BEING CAUSTIC / LIME / CHROME / MINERAL / CHRYOLITE RECOV ERY SYSTEM. THE SURFACE MINOR MACHINE DOES NOT RECOVER OR CONTROL A NY SOLID WASTE. IT IS A MACHINE USED FOR EXCAVATION OF MINE. IN OT HER WORDS, THE 13 I.T.A. NOS.1197 & 1553/MDS/2006 I.T.A. NOS.1121 & 1111/MDS/ 2001 ASSESSEE IS EXCAVATING MINE LAYER BY LAYER WITHOUT WASTING EVEN A SINGLE PIECE OF LIMESTONE. THEREFORE, IT IS NOT A MACHINERY WHICH IS USED IN SOLID WASTE CONTROL. IT IS A MACHINERY FOR EXCAVATION OF LIMESTONE. HENCE, THE ASSESSEE IS NOT ENTITLED FOR 100% DEPRECIATION. 23. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE FUNCTION OF SURFACE MINER, AS DEMONSTRATED BY THE LD. REPRESENT ATIVE FOR THE ASSESSEE, IS USED IN EXCAVATION OF LIMESTONE DEPOSI TS IN THE MINE, LAYER BY LAYER. IT DOES NOT CONTROL SOLID WASTE OR IT IS ALSO NOT USED IN RECOVERY OF SOLID WASTE. THE DEPRECIATION SCHEDULE AS PER APPENDIX 1 PART (A) IS VERY CLEAR THAT ONLY SOLID W ASTE CONTROL EQUIPMENT WHICH IS USED FOR RECOVERY ALONE IS ELIGI BLE FOR 100% DEPRECIATION. THE SURFACE MINER IS A MACHINE USED FOR EXCAVATION IN MINE, LAYER BY LAYER. IN THE CASE OF ASSESSEE, IT IS LIMESTONE DEPOSIT. THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT IT CANNOT BE CONSTRUED AS SOLID WASTE CONTROL EQUIPMENT. THEREF ORE, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH T HE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CONFIRM ED. 14 I.T.A. NOS.1197 & 1553/MDS/2006 I.T.A. NOS.1121 & 1111/MDS/ 2001 24. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE DISMISSED AND BOTH THE APPEALS OF THE REVENUE ALSO STAND DISM ISSED. ORDER PRONOUNCED ON 7 TH APRIL, 2017 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 7 /DATED, THE 7 TH APRIL, 2017. KRI. 1 -089 :9)0 /COPY TO: 1. (/0 /ASSESSEE 2. ASSESSING OFFICER 3. 4 ;0 () /CIT(A) 4. 4 ;0 /CIT, 5. 9< -0 /DR 6. ( = /GF.