V2 Retail Ltd., Kolkata V. DCIT, CIR-10(2), KOLKATA, Kolkata

ITA 1260/KOL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1633 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 06-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SALLONG YADAN
• Keywords: Depreciation; Additional depreciation
• Section: 143(3); 148

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A KOLKATA BEFORE SHRI N.V.VASUDEVAN, JUDICIAL MEMBER AND SHRI J.SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA NO. 1260 / KOL / 2015 ASSESSMENT YEAR:2008-09 V2 RETAIL LTD. CHHAPARIA & ASSOCIATES, CHARTERED ACCOUNTANTS, 8, CAMAC STREET, SHANTINIKETAN BUILDING, 5 TH FLOOR, ROOM NO.2, KOLKATA-17 [ PAN NO.AABCV 5632 P ] V/S . DCIT, CIRCLE-10(2), AAYAKAR BHAWAN, 5 TH FLOOR, P-7, CHOWRINGHEE SQUARE, KOLKAT-69 /APPELLANT .. / RESPONDENT /BY APPELLANT NONE /BY RESPONDENT SHRI SALLONG YADAN, ADDL. CIT-DR /DATE OF HEARING 14-08-2017 !' /DATE OF PRONOUNCEMENT 23-08-2017 / O R D E R PER J.SUDHAKAR REDDY, ACCOUNTANT MEMBER:- THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED A GAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-4, KOLKATA DAT ED 27.07.2015 FOR THE ASSESSMENT YEAR 2008-09 ON THE FOLLOWING GROUNDS:- 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE , THE NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT, 1961 IS VOID-AUT HORITIES BELOW-INITIO IN SO-MUCH AS THE ORIGINAL ASSESSMENT ORDER WAS PAS SED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 AND THE ADDITION S IN THE 147 ORDER IS A MERE CHANGE IN OPINION . THUS, THE ACTION OF THE AO IS VIOLATIVE OF PRINCIPAL LAID DOWN BY VARIOUS COURTS. THE LD. CIT( A) ERRED IN CONFIRMING THE ACTION OF THE AO ITA NO.1260/KOL/2015 A.Y.2008-09 V2 RETAIL LTD. VS. DCIT, CIR-10(2) KOL. PAGE 2 2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. ASSESSING OFFICER HAS ERRED IN MAKING ADDITIONS OF RS.1,66,96 ,747/- IN THE ORDER PASSED UNDER SECTION 147/143(3) OF THE INCOME TAX A CT, 1961, WITHOUT PASSING SPEAKING ORDER AGAINST OBJECTION IN RESPONS E TO NOTICE UNDER SECTION 148 ISSUED BY THE LD. ASSESSING OFFICER, AN D HENCE VIOLATED THE PRINCIPLE LAID DOWN BY THE APEX COURT IN GKN DRIVE SHAFTS (INDIA) LIMITED V/S ITO [259 ITR 19 (SC)] AND HENCE THE ENT IRE PROCEEDINGS UNDER SECTION 147 AND ADDITIONS THERETO ARE ILLEGAL AND LIABLE TO BE QUASHED AUTHORITIES BELOW INITIO. THE LD. CIT(A) ER RED IN CONFIRMING THE ACTION OF THE AO 3. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. AO ERRED IN DISALLOWING RS.1,66,96,747/-, BEING ADDITIONAL DEPR ECIATION ON PLANT & MACHINERY ACQUIRED DURING THE INSTANT YEAR BY OBSER VING THAT THE COMPANY IS NOT ENGAGED IN THE BUSINESS OF MANUFACTU RING OR PRODUCTION WHEN THE AUDITED ACCOUNTS CLEARLY REFLECT THAT THE COMPANY WAS ENGAGED IN THE MANUFACTURING OF APPEALS. THE LD. CI T(A) ERRED IN CONFIRMING THE ACTION OF THE LD. AO. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER AN D DELETE ALL OR ANY GROUNDS OF APPEAL AT THE TIME OF HEARING. 2. NONE APPEARED ON BEHALF OF ASSESSEE IN SPITE OF ISSUE OF NOTICE. THERE IS NO REQUEST FOR ADJOURNMENT EITHER. 3. UNDER THE CIRCUMSTANCES, WE DISPOSE OF THIS APPE AL EX PARTE QUA THE ASSESSEE AFTER HEARING LD. DR. 4. HEARD LD. DEPARTMENTAL REPRESENTATIVE. GROUND NO .3 IS AGAINST THE DISALLOWANCE OF ADDITIONAL DEPRECIATION. THE ASSESS EE CLAIMED THAT IT IS ENGAGED IN THE MANUFACTURING OF APPARELS. IT CLAIME D ADDITIONAL DEPRECIATION ON PLANT AND MACHINERY. 5. THE FIRST APPELLATE AUTHORITY FOLLOWED THE ORDER OF ITS PREDECESSOR IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2009-10 AND DISALLOWED THE CLAIM OF ASSESSEE. ON APPEAL, THE TRIBUNAL ON THIS ISSUE IN THE ASSESSEES OWN CASE IN ITA NO.2413/KOL/2013 DATED 01.06.2016 ALLOWED TH E DEPRECIATION @ 80% AS AGAINST DEPRECIATION RATE OF 15% ALLOWED THAT TH E AO. THE RELEVANT EXTRACT IS REPRODUCED AS UNDER:- 3.2. THE LD. AR APART FROM REITERATING THE SUBMISSI ONS AS MADE BEFORE THE LOWER AUTHORITIES, RELIED ON THE DECISIO N OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. AGARWAL TRANSFORM ERS PVT. LTD. REPORTED IN 258 ITR 251 (RAJ) WHEREIN IT WAS HELD THAT ELECTRIC GENERATOR CLEARLY FALLS UNDER RENEWAL ENERGY DEVICE AND THERE BY ELIGIBLE FOR ITA NO.1260/KOL/2015 A.Y.2008-09 V2 RETAIL LTD. VS. DCIT, CIR-10(2) KOL. PAGE 3 ENHANCED RATE OF DEPRECIATION. IN RESPONSE TO THIS , THE LD. DR ARGUED THAT ELECTRIC GENERATOR IS RUN ON DIESEL AND HENCE NOT RENEWABLE ENERGY DEVICE. HE ARGUED THAT RENEWABLE ENERGY IS GENERAL LY DEFINED AS ENERGY THAT IS COLLECTED FROM RESOURCES WHICH ARE N ATURALLY REPLENISHED ON A HUMAN TIMESCALE, SUCH AS SUNLIGHT, WIND, RAIN, TIDES, WAVES, AND GEOTHERMAL HEAT. RENEWABLE ENERGY OFTEN PROVIDES E NERGY IN FOUR IMPORTANT AREAS ELECTRICITY GENERATION, AIR AND WAT ER HEATING/COOLING, TRANSPORTATION, AND RURAL (OFF-GRID) ENERGY SERVICE S. BASED ON THIS, HE ARGUED THAT NO REPLENISHABLE SOURCES IS USED BY ASS ESSEE FOR ELECTRIC GENERATORS, ACCORDINGLY, HE VEHEMENTLY RELIED ON TH E ORDERS OF THE LOWER AUTHORITIES. 3.4. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ISSUE IN DIS PUTE IS SQUARELY COVERED BY THE DECISION OF THE HONBLE RAJASTHAN HI GH COURT IN THE CASE OF AGARWAL TRANSFORMERS PVT. LTD., SUPRA WHEREIN IT WAS HELD AS UNDER: ..IN ORDER TO APPRECIATE THE CONTROVERSY INVOLVE D, IT WILL BE CONVENIENT TO EXTRACT THE RELEVANT ENTRY AT CLAUSE (XIII) OF ITEM 10A OF APPENDIX I APPENDED TO INCOME-TAX RULES, WHICH R EADS AS FOLLOWS: 'ANY SPECIAL DEVICES INCLUDING ELECTRIC GENERATORS AND PUMPS RUNNING ON WIND ENERGY.' 3, ACCORDING TO THE RULES OF CONSTRUCTION, WHERE TW O OR MORE WORDS WHICH ARE SUSCEPTIBLE OF ANALOGOUS MEANING ARE COUP LED TOGETHER NOSCITUR A SOCIIS, THEY ARE UNDERSTOOD TO BE USED I N THEIR COGNATE SENSE. THEY TAKE, AS IT WERE, THEIR COLOUR FROM EAC H OTHER, THE MEANING OF THE MORE GENERAL BEING RESTRICTED TO A S ENSE ANALOGOUS TO THAT OF THE LESS GENERAL. THUS. IN OUR VIEW THE WORD 'ELECTRIC GENERATOR' MUST BE CONSTRUED AS EJUSDEM GENERIS. TH E ELECTRIC GENERATOR BY ITSELF GENERATE ELECTRICITY AND, THERE FORE, DO NOT FALL WITHIN THE RENEWABLE ENERGY DEVICES. IT IS DIFFEREN T FROM PUMPS RUN ON WIND ENERGY, WHICH FALLS WITHIN THE RENEWABLE EN ERGY DEVICES. THUS, IT IS ERRONEOUS TO SAY THAT THE CONDITION ' RUN ON WIND ENERGY ' IS ALSO ATTACHED TO ELECTRIC GENERATORS. EVEN GRA MMATICALLY NEITHER, NOR THE WORD 'BOTH' IS USED AFTER THE WORD ' PUMPS ' IN THE RELEVANT ENTRY AND THIS ALSO CLARIFIES THAT THE CON DITION 'RUNNING ON' WIND 'ENERGY' IS ONLY ATTACHED TO THE WORD 'PUMPS' AND NOT TO THE ELECTRIC GENERATORS. A FURTHER READING OF THE ENTRY SHOWS THAT IT IS INCLUSIVE, IT REFERS TO TWO DIFFERENT ITEMS NAMELY, ELECTRIC GENERATORS AND SECONDLY THE PUMPS RUNNING ON WIND ENERGY. THUS , IN OUR VIEW THE ELECTRIC GENERATOR CLEARLY FAILS UNDER THE RENE WABLE ENERGY DEVICES AND THE TRIBUNAL HAS RIGHTLY ALLOWED THE DE PRECIATION AT THE RATE OF 30 PER CENT ON THE BASIS OF ITEM 10A, CLAUS E (XIII), OF APPENDIX 1. ITA NO.1260/KOL/2015 A.Y.2008-09 V2 RETAIL LTD. VS. DCIT, CIR-10(2) KOL. PAGE 4 4. THE REFERENCE IS ACCORDINGLY ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. RESPECTFULLY FOLLOWING THE RATIOS LAID DOWN IN THE AFORESAID DECISION, WE ALLOW THE GROUND NO. 3 OF ASSESSEES APPEAL. CONSISTENT WITH THE VIEW TAKEN BY THE CO-ORDINATE B ENCH, WE ALLOW THIS CLAIM OF THE ASSESSEE. HENCE, THIS GROUND OF ASSESSEE IS ALLOWED. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 23 /08/2017 SD/- SD/- ($%&) ( %&) (N.V.VASUDEVAN) (J.SUDHAKAR REDDY) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP, SR.P.S (%)*- 23 / 08 /201 7 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-V2 RETAIL LTD. CHHAPARIA & ASSOCIATES, C HARTERED ACCOUNTANTS, 8, CAMAC ST, SHAN TINIKETAN BUILDING, 5 TH FLOOR, ROOM NO.2 KOLKATA-17 2. /RESPONDENT-DCIT,CIRCLE-10(2)AAYAKARBHAWANA,5 TH FL,P-7,CHOWRINGHEE SQ.KOL-69 3.)2)3 4 / CONCERNED CIT KOLKATA 4. 4- / CIT (A) KOLKATA 5.789$$3 , 3 , / DR, ITAT, KOLKATA 6.9;<=> / GUARD FILE. BY ORDER/ %, /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO 3 ,