Techmat Enterprises (India) Pvt. Ltd., CHENNAI V. ACIT, CHENNAI

ITA 1125/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8641 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 26-04-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: V S JAYAKUMAR
• Keywords: Depreciation
• Section: 147

Judgement Text

, / , IN THE INCOME TAX APPELLATE TRIBUNAL A / SMC BENCH, CHENNAI ... , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER ./ ITA NO.1125/MDS/2016 ' #$' / ASSESSMENT YEAR : 2003-04 M/S TECHMAT ENTERPRISES (INDIA) PVT. LTD., 92A, SIDCO, INDUSTRIAL ESTATE, AMBATTUR, CHENNAI - 600 098. PAN : AAACT 7635 H V. THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE III(2), CHENNAI - 600 034. (&'/ APPELLANT) (()&'/ RESPONDENT) &' * + / APPELLANT BY : SHRI V.S. JAYAKUMAR, ADVOCATE ()&' * + / RESPONDENT BY : SH. P. RADHAKRISHNAN, JCIT , # * -. / DATE OF HEARING : 14.06.2016 /0$ * -. / DATE OF PRONOUNCEMENT : 18.08.2016 / O R D E R THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) III, CHE NNAI, DATED 21.07.2014 AND PERTAINS TO ASSESSMENT YEAR 2003-04. 2. SHRI V.S. JAYAKUMAR, THE LD.COUNSEL FOR THE ASSE SSEE, SUBMITTED THAT THE ASSESSEE HAS RAISED THREE GROUND S IN THE APPEAL. OUT OF THESE THREE GROUNDS, THE ASSESSEE IS NOT PRE SSING TWO 2 I.T.A. NO.1125/MDS/16 GROUNDS. IN OTHER WORDS, THE ASSESSEE IS NOT PRESS ING THE GROUND WITH REGARD TO REOPENING UNDER SECTION 147 OF THE I NCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') AND ALSO THE GROUND WITH REGARD TO DISALLOWANCE OF DIMINUTION OF INVESTMENTS TO THE EX TENT OF ` 47,000/- IN VIEW OF THE ABOVE, BOTH THESE GROUNDS OF APPEAL WITH REGARD TO REOPENING AND DISALLOWANCE OF DIMINUTION OF VALUE O F INVESTMENTS ARE DISMISSED AS NOT PRESSED. 3. NOW THE GROUND REMAINS IS WITH REGARD TO DISALLO WANCE OF EXCESS DEPRECIATION. 4. SHRI V.S. JAYAKUMAR, THE LD.COUNSEL FOR THE ASSE SSEE, SUBMITTED THAT THE ASSESSEE CLAIMED DEPRECIATION A T 80% ON ENERGY SAVING DEVICE. ACCORDING TO THE LD. COUNSEL, TEMPE RING FURNACE, GAS CARBURIZING FURNACE AND SEALED QUENCH FURNACE A RE TO BE CONSIDERED AS ENERGY SAVING DEVICES UNDER ARTICLE 5 OF INCOME-TAX RULES, 1962. ACCORDING TO THE LD. COUNSEL, THE CLA IM OF THE ASSESSEE WOULD SQUARELY FALL WITHIN THE EXPRESSION SPECIALIZED BOILERS AND FURNACES. THE LD.COUNSEL FURTHER SUBM ITTED THAT THE ASSESSEE HAS OBTAINED EXPERT OPINION, A COPY OF WHI CH IS AVAILABLE AT PAGE 10 OF THE PAPER-BOOK, FROM ONE DR. N. KRISH NARAJ, CONSULTANT METALLURGIST. THE EXPERT OPINION WAS NO T EVEN 3 I.T.A. NO.1125/MDS/16 CONSIDERED BY BOTH THE AUTHORITIES BELOW AND THEY D ISALLOWED THE CLAIM OF THE ASSESSEE. ACCORDING TO THE LD. COUNSE L, SINCE THE CLAIM OF THE ASSESSEE SQUARELY FALLS WITHIN THE DEF INITION ENERGY SAVING DEVICE, THE ASSESSEE IS ELIGIBLE FOR DEPREC IATION AT 80%. 5. ON THE CONTRARY, SH. P. RADHAKRISHNAN, THE LD. D EPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE HAS PRO DUCED EXPERT OPINION ON THE FIELD. THE ASSESSING OFFICER, ACCOR DING TO THE LD. D.R., IS NOT AN EXPERT IN EXAMINING THE ENERGY SAVI NG DEVICES, THEREFORE, THE ASSESSING OFFICER HAS TO NECESSARILY REFER THE MATTER TO ANOTHER EXPERT ON THE GOVERNMENT SIDE. UNLESS A ND UNTIL THE ASSESSING OFFICER REFERS THE MATTER TO AN EXPERT ON THE GOVERNMENT SIDE, HE MAY NOT BE ABLE TO TAKE A DECISION. THE L D. D.R. HAS VERY FAIRLY SUBMITTED THAT HE IS NOT AN EXPERT ON THE FI ELD, THEREFORE, THE MATTER MAY BE REMITTED BACK FOR RECONSIDERATION AFT ER GETTING OPINION FROM AN EXPERT ON THE FIELD. 6. I HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHE R SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSEE CLAIMS THAT TEMPERING FURNACE, GAS CARBURIZING FURN ACE AND SEALED QUENCH FURNACE ARE TO BE CONSIDERED AS ENERGY SAVIN G DEVICES UNDER ARTICLE 5 OF INCOME-TAX RULES, 1962. THE ASS ESSEE HAS ALSO 4 I.T.A. NO.1125/MDS/16 OBTAINED AN EXPERT OPINION FROM DR. N. KRISHNARAJ, CONSULTANT METALLURGIST, A COPY OF WHICH IS AVAILABLE AT PAGE 10 OF THE PAPER- BOOK FILED BY THE ASSESSEE. THIS OPINION WAS NOT E VEN CONSIDERED BY BOTH THE AUTHORITIES BELOW. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THIS OPINION HAS TO BE FIRST TAKEN INT O CONSIDERATION BY THE ASSESSING OFFICER. THE CLAIM OF THE LD. D.R. I S THAT THE ASSESSING OFFICER IS NOT AN EXPERT ON THE FIELD, TH EREFORE, HE HAS TO NECESSARILY REFER THE MATTER TO ANOTHER EXPERT ON T HE GOVERNMENT SIDE. THIS TRIBUNAL IS OF THE CONSIDERED OPINION T HAT UNDER THE SCHEME OF INCOME-TAX ACT, THE DECISION MAKING POWER IS VESTED WITH THE ASSESSING OFFICER. IF THE ASSESSING OFFIC ER COULD NOT TAKE A DECISION ON THE BASIS OF MATERIAL AVAILABLE ON RECO RD AFTER CONSIDERING THE TECHNICAL REPORT SAID TO BE FILED B Y THE ASSESSEE, IT IS OPEN TO THE ASSESSING OFFICER TO REFER THE MATTER T O ANOTHER EXPERT. THEREFORE, THERE MAY NOT BE ANY IMPEDIMENT ON THE P ART OF THE ASSESSING OFFICER TO REFER THE MATTER TO ANOTHER EX PERT. HOWEVER, UNDER THE SCHEME OF INCOME-TAX ACT, THE ULTIMATE DE CISION HAS TO BE TAKEN BY THE ASSESSING OFFICER AFTER CONSIDERING AL L THE MATERIAL FACTS INCLUDING THE OPINION OF EXPERT. THIS TRIBUN AL IS OF THE CONSIDERED OPINION THAT SINCE THE EXPERT OPINION SA ID TO HAVE BEEN OBTAINED FROM ONE DR. N. KRISHNARAJ, CONSULTANT MET ALLURGIST WAS NOT 5 I.T.A. NO.1125/MDS/16 CONSIDERED BY THE AUTHORITIES BELOW, THE MATTER NEE DS TO BE RECONSIDERED BY THE ASSESSING OFFICER. ACCORDINGLY , THE ORDERS OF THE AUTHORITIES BELOW ARE SET ASIDE AND THE ISSUE W ITH REGARD TO DISALLOWANCE OF DEPRECIATION ON THE SO-CALLED ENERG Y SAVING DEVICES ALONE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RECONSIDER THE ISSUE AFTER CONSIDERING EXPERT OPINION AND THEREAFTER DECIDE THE ISSUE IN ACCORDAN CE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. IT IS MADE CLEAR THAT IT IS OPEN TO THE ASSESSING OFFICER TO REFER THE MA TTER TO ANOTHER EXPERT IF HE FEELS SO. 7. WITH THE ABOVE OBSERVATION, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 18 TH AUGUST, 2016 AT CHENNAI. SD/- ( ... ) (N.R.S. GANESAN) /JUDICIAL MEMBER /CHENNAI, 2 /DATED, THE 18 TH AUGUST, 2016. KRI. 6 I.T.A. NO.1125/MDS/16 * (-34 54$- /COPY TO: 1. &' /APPELLANT 2. ()&' /RESPONDENT 3. , 6- () /CIT(A)-III, CHENNAI-34 4. , 6- /CIT, CHENNAI-III, CHENNAI-34 5. 4#7 (- /DR 6. 8' 9 /GF.