Asian Oilfield Services Ltd., Baroda V. The Dy.CIT.,Circle-1(1), Baroda

ITA 1266/AHD/2012

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8035 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 09-08-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 11-06-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R P MAURYA
• Keywords: Business income; Depreciation; Principle of natural justice; Additional depreciation
• Section: 143(3)

Judgement Text

ITA NO. 1266/AHD/2012 ASIAN OILFIELD SERVICES LIMITED VS. DCIT ASSESSMENT YEAR : 2008-09 PAGE 1 OF 7 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND S S GODARA JM] ITA NO. 1266/AHD/2012 ASSESSMENT YEAR: 2008-09 ASIAN OILFIELD SERVICES LTD .......... ...APPELLANT 7 TH FLOOR, B-WING MANUBHAI TOWER, SAYAJIGUNJ, BARODA-390 020 [PAN : AABCA 7958 F] VS. THE DY. COMMISSIONER OF INCOME-TAX .......................RESPONDENT CIRCLE-1(1), BARODA APPEARANCES BY: DHARMESH SHAH & DHAVAL SHAH FOR THE ASSESSEE RP MAURYA FOR THE REVENUE DATE OF CONCLUDING THE HEARING : 12.09.2017 DATE OF PRONOUNCING THE ORDER : 08.12.2017 O R D E R PER PRAMOD KUMAR AM: 1. BY WAY OF THIS APPEAL, THE ASSESSEE APPELLANT HA S CHALLENGED CORRECTNESS OF THE ORDER DATED 7 TH MARCH 2012, PASSED BY THE CIT(A) IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2008-09. 2. GRIEVANCES RAISED BY THE APPELLANT ARE AS FOLLOW S:- 1. (I) THE LEARNED C1T(A) HAS ERRED IN SUSTAINING THE ACTION OF THE LEARNED A.O. IN DENYING DEPRECIATION OF RS.2,12,79,355/- IN RESP ECT OF ALL THE EQUIPMENTS AMOUNTING TO RS.7,09,31,184/- IN QUESTIO N WHICH WERE PUT TO USE DURING THE YEAR FOR ONGC AND OIL INDIA LTD PROJ ECT BY HOLDING THAT THE SAME WERE NOT PUT TO USE DURING THE YEAR. (II) THE LEARNED A.O. AS WELL AS CIT(A) FAILED TO APPRECIATE THAT THERE WERE ENOUGH EVIDENCES INCLUDING THE CERTIFICATES FROM TH E ONGC AND OIL INDIA LTD ABOUT THE ASSETS HAVING BEEN INSTALLED AND PUT TO USE BEFORE 31ST MARCH, 2008 AND ALSO ABOUT RECEIPT OF INCOME FROM T HEM ON ACCOUNT OF USE OF THESE ASSETS AND HENCE THE CLAIM OF THE APPE LLANT FOR DEPRECIATION WAS FULLY JUSTIFIED. IT IS SUBMITTED THAT IT BE SO HELD NOW. ITA NO. 1266/AHD/2012 ASIAN OILFIELD SERVICES LIMITED VS. DCIT ASSESSMENT YEAR : 2008-09 PAGE 2 OF 7 (III) WITHOUT PREJUDICE TO FOREGOINGS, THE LEARNE D CIT(A) FAILED TO APPRECIATE THAT THE DISPUTE ABOUT THE CLAIM OF CLEARANCE BY CU STOM AUTHORITIES IN RESPECT OF BILL OF ENTRY WAS ONLY IN RESPECT OF ASS ETS MEANT FOR PROJECT OF OIL INDIA LTD AND NOT FOR ONGC PROJECT AND AS SUCH AT LEAST IN RESPECT OF ASSETS INSTALLED AND PUT TO USE FOR ONGC PROJECTS A MOUNTING TO RS.2,62,55,307/-, THE DEPRECIATION AS CLAIMED BY TH E APPELLANT SHOULD HAVE BEEN GRANTED TO IT. 2. WITHOUT PREJUDICE TO ABOVE, THE LEARNED CIT(A) A LSO ERRED IN DENYING DEPRECIATION @ 60% BY HOLDING THE EQUIPMENTS IN QUE STION, WHICH ARE HIGHLY SOPHISTICATED, ELECTRONIC AND FULLY AUTOMATED SEISM IC SURVEY EQUIPMENTS WHICH WORK AS COMPUTERS TO BE GENERAL PLANT AND MACHINERY ELIGIBLE FOR DEPRECIATION @ 15% AND THUS GRANTING D EPRECIATION THEREON @ 15% AS AGAINST 60% CLAIMED BY THE APPELLANT CONSIDERING THEM AS COMPUTERS. 3. THE LEARNED CIT(A) FURTHER ERRED IN NOT ALL OWING ADDITIONAL DEPRECIATION IN RESPECT OF PLANT & MACHINERIES INSTALLED AND PUT TO USE DURING THE YEAR UNDER CONSIDERATION. 4. WITHOUT PREJUDICE TO ABOVE, THE LEARNED CIT(A ) HAS ERRED IN NOT ALLOWING ALTERNATIVE CLAIM OF DEPRECIATION @ 60% TOGETHER WI TH THE ADDITIONAL DEPRECIATION ON THE ABOVE ITEMS OF PLANT & MACHINER Y IGNORING THE CLAIM OF THE APPELLANT THAT IT IS A MINERAL OIL CONCERN, 5. THE LEARNED CIT(A) ERRED IN DENYING DEPRECIAT ION @ 60 % IN RESPECT OF GEOPHONE STINGS AND SEISMIC CABLES WHICH ARE ESSENT IAL PARTS OF HIGHLY SOPHISTICATED, ELECTRONIC AND FULLY AUTOMATED SEISM IC SURVEY EQUIPMENTS WHICH WORK AS COMPUTERS BY HOLDING THE SAME TO BE G ENERAL PLANT AND MACHINERY ELIGIBLE FOR DEPRECIATION @ 15% AS AGAINS T 60% CLAIMED BY THE APPELLANT CONSIDERING THEM AS COMPUTERS AND THUS RE DUCING THE ALLOWABLE AMOUNT OF DEPRECIATION FROM RS.1,13,57,482/- TO RS. 28,39,370/-. 5.1 THE LEARNED CIT(A) HAS FURTHER ERRED IN NOT AL LOWING ADDITIONAL DEPRECIATION ON THE ABOVE ITEMS INSTALLED AND PUT T O USE DURING THE YEAR UNDER CONSIDERATION. 5.2 WITHOUT PREJUDICE TO ABOVE, LEARNED CIT(A) ERR ED IN NOT ALLOWING ALTERNATIVE CLAIM OF DEPRECIATION @ 60% TOGETHER WI TH THE ADDITIONAL DEPRECIATION ON THE ABOVE ITEMS IGNORING THE CLAIM OF THE APPELLANT THAT IT IS A MINERAL OIL CONCERN. 6. THE LEARNED CIT(A) ERRED IN HOLDING THAT RS .3,61,255/- OF GAIN MADE BY THE APPELLANT ON SALE OF SHARES / SECURITIES IS LIA BLE TO BE TAXED AS BUSINESS INCOME AND NOT AS SHORT TERM CAPITAL GAIN. 3. BRIEFLY STATED, THE RELEVANT MATERIAL FACTS ARE LIKE THIS. THE ASSESSEE IS ENGAGED IN THE BUSINESS. DURING THE COURSE OF ASSE SSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS PURCH ASED CERTAIN SEISMIC SURVEY EQUIPMENT FROM A CANADIAN COMPANY BY THE NAME OF A RAM SYSTEMS LTD, FOR A ITA NO. 1266/AHD/2012 ASIAN OILFIELD SERVICES LIMITED VS. DCIT ASSESSMENT YEAR : 2008-09 PAGE 3 OF 7 CONSIDERATION OF RS.7,09,31,184, CLAIMED TO HAVE PU T IT TO USE ON 13.03.2008 AND CLAIMED DEPRECIATION DEDUCTION @ 60%, TREATING THE EQUIPMENT AS A COMPUTER, AMOUNTING TO RS.2,12,79,355. THE ASSESSING OFFICER , HOWEVER, ALSO NOTED THAT THE EQUIPMENTS WERE RECEIVED BY DIFFERENT PACKAGES AND FIVE OF THESE PACKAGES CONTAINING TWO ITEMS WERE CLEARED BY THE CUSTOM AUT HORITIES AT IGI AIRPORT ON 08.04.2008. ONCE A PART OF EQUIPMENT WAS NOT EVEN RECEIVED BY THE ASSESSEE IN THE RELEVANT PREVIOUS YEAR, ACCORDING TO THE ASSESSING OFFICER, THERE WAS NO QUESTION OF THE EQUIPMENTS BEING PUT TO USE IN THAT PREVIOUS YE AR. A COPY OF THE BILL OF ENTRY (B/E), CERTIFIED BY THE CUSTOM AUTHORITIES AND EVID ENCING RECEIPT OF PART OF EQUIPMENT ON 08.04.2008, WAS PLACED IN, AND MADE PART OF, THE ASSESSMENT ORDER ITSELF. AS REGARDS ASSESSEES CLAIM FOR DEPRECIATION @ 60%, TH E ASSESSING OFFICER NOTED THAT SUCH A RATE IS ADMISSIBLE ONLY FOR COMPUTERS AND NO T FOR EQUIPMENT. THE ASSESSEES PLEA THAT THE EQUIPMENT SHOULD BE TREATED AS COMPUT ER AS THE EQUIPMENT HAS THREE CRUCIAL COMPONENTS WHICH QUALIFY THE MACHINE TO BE TERMED AS COMPUTER INPUT CONSOLE, PROCESSING CONSOLE AND OUTPUT CONSOLE. T HIS PLEA WAS ALSO REJECTED. WHILE DOING SO, THE ASSESSING OFFICER OBSERVED AS F OLLOWS:- (5.3) BY DEFINING THE EQUIPMENTS AS ABOVE, THE ASSE SSEE IS TRIED TO CLAIM THAT THE ASSET FALLS IN CLASSIFICATION OF COMPUTER & SOF TWARE. THE ARGUMENTS OF ASSESSEE CANNOT BE ACCEPTABLE ON FOLLOWING GROUND: (I) THE ITEMS I.E. PLANT & MACHINERY OR EQUIPMENT U SED BY THE ASSESSEE FOR SEISMIC & GEOGRAPHICAL SURVEY PURPOSE IS TOTALLY DI FFERENT ALTOGETHER FROM THE COMPUTER SYSTEM. (II) THE COMPUTER IS DEVICE WHICH COMPUTES OR PROCE SS THE DATA BASED ON SOFTWARE. THE SEISMIC SURVEY EQUIPMENT RECEIVES SIG NALS / FREQUENCY FROM THE EARTH. THE SEISMIC SURVEY EQUIPMENTS FOR M AN ASSET BY ANALYZING THESE SIGNALS FROM ITS EQUIPMENTS. (III) NOW A DAY, ALL THE PLANT AND MACHINERIES WORK S ON BASED ON COMPUTER, IT DOES NOT MEANS THAT THE PLANT & MACHINERY CAN BE CLASSIFIED AS COMPUTER SYSTEM. IT CAN BE SEEN AT POWER DISTRIBUTI ON, MEDICAL/ SURGICAL EQUIPMENT, TV/VIDEO, MISSILES, AERO PLANES, MOBILE ETC ALL ARE COMPUTERIZED; BUT THE ASSET DOES NOT FALLS IN THE C ATEGORY OF COMPUTER. (IV)THE ASSESSEE ITSELF BEFORE THE CUSTOMS AUTHORIT Y DECLARED THE ITEMS AS SEISMIC SURVEY EQUIPMENT AND PAID DUTIES. ONLY TO G ET HIGHER DEPRECIATION ASSESSEE IS CLAIMING EQUIPMENTS AS COM PUTER. (V) IN THE BILLS, INVOICES, SHIPPING INVOICES NOWHE RE ASSESSEE CLAIMED THE EQUIPMENTS AS COMPUTER. (VI) THE DEFINITION & ANALYSIS GIVEN BY ASSESSEE AB OVE; IT FAILED TO PROVE THAT THE EQUIPMENT FALLS IN THE CATEGORY OF COMPUTE R. (VII) SIMILAR SEISMIC SURVEY EQUIPMENTS ASSETS, ALR EADY TREATED BY THE ASSESSEE AS PLANT & MACHINERY AND DEPRECIATION CLAI MED ACCORDINGLY. ITA NO. 1266/AHD/2012 ASIAN OILFIELD SERVICES LIMITED VS. DCIT ASSESSMENT YEAR : 2008-09 PAGE 4 OF 7 THEREFORE, THE CLASSIFICATION OF SEISMIC SURVEY EQU IPMENT TREATED BY ASSESSEE AS COMPUTER IS REJECTED AND DEPRECIATION @60% AS CL AIMED BY THE ASSESSEE IS DISALLOWED. THE ASSESSEE IS ONLY ENTITLED FOR DE PRECIATION @15% ALLOWABLE FOR PLANT & MACHINERY FOR THE PERIOD (BELOW 180 DAY S) PUT TO USE AN AMOUNT OF 15% OF (RS.7,09,31,184 - RS.63,09,207)/2 WHICH COME S RS.48,46,448/-. 4. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) BUT WITHOUT ANY SUCCESS. IN A VERY WELL REASONED AND D ETAILED ORDER, LEARNED CIT(A) JUSTIFIED AND APPROVED THE STAND OF THE ASSESSING O FFICER. THE OPERATIVE PORTION OF HIS ORDER IS AS FOLLOWS:- 2.2. I HAVE CONSIDERED FACTS OF THE CASE, APPELLAN T'S SUBMISSIONS, AO'S REPORT AND APPELLANT'S FURTHER COMMENTS. THERE IS A DISPUT E BETWEEN APPELLANT AND THE ASSESSING OFFICER ABOUT SERVICE OF SHOW CAUSE N OTICE ON 9.9.2010. I AM OF THE VIEW THAT IN THE INTEREST OF NATURAL JUSTICE, M ATTER NEEDS TO BE DECIDED AFTER TAKING INTO ACCOUNT MERITS OF APPELLANT'S SUBMISSIO NS INTO ACCOUNT. THE MATTER IS ACCORDINGLY ADJUDICATED HEREUNDER. AS PER THE 'B ILL OF ENTRY FOR HOME CONSUMPTION' ISSUED BY CUSTOMS AUTHORITIES, ALL THE ITEMS IN RESPECT OF SALE ORDER NO.209904 TOTALLING TO US $ 10,94,186 WERE CL EARED BY CUSTOMS AUTHORITIES ON 8.4.2008. AS PER ASSESSING OFFICER, ONLY TWO ITEMS CONSISTING OF 5 PACKAGES OF THE VALUE RS.63,09,207/- WERE CLEARED ON 8.4.2008; HOWEVER, AS PER 5 BILLS OF ENTRY (ON PAGES 4-10 OF THE PAPER BOOK), ENTIRE CONSIGNMENT OF THE VALUE US $ 10,94,186 IN RESPECT OF SALE ORDE R NO. 209904 MENTIONED IN COMMERCIAL INVOICE IN THIS REGARD OF ARAM SYSTEMS L TD. WAS CLEARED ON 8,4.2008 BY THE CUSTOMS AUTHORITIES. APPELLANT HAS RELIED UPON VARIOUS CIRCUMSTANTIAL EVIDENCES TO CONTEND THAT INSTALLATI ON OF EQUIPMENT IMPORTED FROM ARAM SYSTEMS LTD. WAS COMPLETED ON 13.3.2008/2 7.2.2008; HOWEVER, APPELLANT HAS NOT BEEN ABLE TO PROVIDE ANY WORTHWHI LE EXPLANATION REGARDING DATE OF CUSTOMS CLEARANCE OF EQUIPMENT OF THE VALUE US $ 10,94,186 TO BE 8.4.2008. IF THE DATE MENTIONED I.E. 8.4.2008 IN T HE BILLS OF ENTRY WAS A MISTAKE, AS CONTENDED, APPELLANT COULD HAVE OBTAINE D A CORRIGENDUM OR CLARIFICATION TO THIS EFFECT FROM CUSTOMS AUTHORITI ES, WHICH HAS NOT BEEN DONE. ONUS OF PROVING THAT THE DATE OF CUSTOMS CLEARANCE WAS NOT 8.4.2008 BUT WAS PRIOR TO 31.3.2008 WAS SQUARELY OF THE APPELLANT, W HICH HAS NOT BEEN DISCHARGED. IN THIS SITUATION, THE DATE MENTIONED I N BILLS OF ENTRY HAS TO BE TAKEN AS CORRECT. WHEN THE EQUIPMENT IN QUESTION WA S CLEARED BY CUSTOMS AUTHORITIES ON 8.4.2008, THERE IS NO POSSIBILITY OF ITS INSTALLATION IN MIZORAM OR NAGALAND BEFORE 31.3.2008 AS CONTENDED. FURTHER, AP PELLANT'S CONTENTION THAT THE EQUIPMENT IN QUESTION WERE IMPORTED IN RESPECT OF CONTRACTS AWARDED BY OIL & NATURAL GAS CORPORATION LTD. (ONGC) AND OIL I NDIA LTD, (OIL) AND WERE INSTALLED AT NAGALAND AND MIZORAM RESPECTIVELY BEFO RE 31.3.2008 IS NOT PROVED FROM THE DOCUMENTS RELIED UPON BY THE APPELL ANT, AS DISCUSSED HENCEFORTH. THE INVOICES ISSUED BY ARAM SYSTEMS LD. , CANADA DO NOT CONTAIN ANY REFERENCE TO THE ONGC OR OIL CONTRACTS, NEITHER THE CONTRACTS THEMSELVES CONTAIN ANY REFERENCE TO THE EQUIPMENT IMPORTED FRO M ARAM SYSTEMS LTD. THE AIRWAYS BILLS DO NOT CONTAIN ANY DESCRIPTION OF THE ITEMS SENT TO NAGALAND OR ITA NO. 1266/AHD/2012 ASIAN OILFIELD SERVICES LIMITED VS. DCIT ASSESSMENT YEAR : 2008-09 PAGE 5 OF 7 MIZORAM. APPELLANT HAS REFERRED TO CORRESPONDENCE W ITH ONGC (ANNEXURE 5 OF PB) TO CONTEND THAT EQUIPMENT IN QUESTION HAD RE ACHED PROJECT SITE AND WAS PUT TO USE. THE LETTERS REFERRED TO BY APPELLAN T DO NOT, IN ANY WAY, PROVE THAT THE ARAM ARIES SPM LIFE EQUIPMENT HAD REACHED NAGALAND OR WAS INSTALLED, AS THERE IS NO SUCH AVERMENT IN THESE LE TTERS. IN FACT, THERE IS NO EXPLICIT OR OBLIQUE REFERENCE TO THE EQUIPMENT IN Q UESTION IN THESE LETTERS WRITTEN BY APPELLANT'S STAFF, COPY OF WHICH IS FILE D BY APPELLANT. MOREOVER, THE CORRESPONDENCE FILED ARE LETTERS FROM APPELLANT TO ONGC ONLY. COPY OF NOT A SINGLE LETTER FROM ONGC TO APPELLANT IN THIS REGARD IS FILED. AUTHENTICITY OF CORRESPONDENCE FILED, WHICH DOES NOT BEAR ANY RECEI PT STAMP OR ACKNOWLEDGEMENT FROM ONGC IS ALSO NOT ESTABLISHED. FURTHER, ONGC/OIL IN THEIR COMMUNICATIONS DATED 13.3.2008 (PAPER BOOK PA GE 147)/27.2.2008 (PAPER BOOK PAGE 154) RESPECTIVELY HAVE ONLY COMMUN ICATED THAT MOBILIZATION AGAINST THE CONTRACTS WAS COMPLETED; H OWEVER, THESE LETTERS DO NOT IN ANY WAY PROVE INSTALLATION OF THE EQUIPMENT IN QUESTION. THE FACT THAT APPELLANT RAISED INVOICE FOR MOBILIZATION CHARGES A S PER CONTRACTS WITH ONGC & OIL ALSO DOES NOT PROVE INSTALLATION OF THE EQUIP MENT IN QUESTION IN NAGALAND OR MIZORAM, WHEN MAJOR PART OF THE SAME WA S CLEARED BY CUSTOMS AUTHORITIES ON 8.4.2008. DEMARCATION DONE BY APPELL ANT OF THE EQUIPMENT OF THE VALUE RS.7,09,31,184/- BETWEEN ONGC & OIL PROJE CTS IS NOT SUPPORTED BY ANY EVIDENCE AND CANNOT THEREFORE, BE RELIED UPON. MOREOVER, AS MENTIONED, APPELLANT HAS NOT ADDUCED ANY DIRECT EVIDENCE, WHIC H COULD PROVE INSTALLATION OF THE EQUIPMENT CONCERNED AT PROJECT SITES FOR EXE CUTION OF ONGC/OIL PROJECTS IN NAGALAND/MIZORAM. THE INSTALLATION ACCE PTANCE CERTIFICATE SIGNED BETWEEN ARAM SYSTEMS LTD. AND APPELLANT ON 28.2.200 8 CANNOT BE RELIED UPON IN VIEW OF THE BILLS OF ENTRY DATED 8.4.2008 I SSUED BY A GOVERNMENT AUTHORITY I.E. CUSTOMS DEPARTMENT, GOVERNMENT OF IN DIA. THIS INSTALLATION ACCEPTANCE CERTIFICATE DOES NOT EVEN INDICATE THE P LACE, WHERE IT WAS SIGNED. SINCE MAJOR PART OF THE EQUIPMENT OF THE VALUE US $ 10,94,186 IMPORTED FROM ARAM SYSTEMS LTD., CANADA WAS CLEARED BY INDIAN CUS TOMS ON 8.4,2008 AND APPELLANT HAS NOT BEEN ABLE TO FILE ANY EVIDENCE IN SUPPORT OF ITS CLAIM ABOUT INSTALLATION HAVING BEEN COMPLETED BEFORE 31.3.2008 , AO'S ACTION IN DISALLOWING CLAIM OF DEPRECIATION OF RS.2,12,79,355 /- IS CONFIRMED. 2.2.1. GROUND NO.1.1 OF APPEAL THAT WITHOUT PREJUDI CE, CORRECT RATE OF DEPRECIATION WAS 60% INSTEAD OF 15% IS NOW TAKEN UP . THE EQUIPMENT IN QUESTION IMPORTED FROM ARAM SYSTEMS LTD., CANADA WE RE SEISMIC SURVEY EQUIPMENTS. AS PER INFORMATION AVAILABLE ON INTERNE T, ARAM SYSTEMS LTD. IS A COMPANY ENGAGED IN RESEARCH, DEVELOPMENT AND PRODUC TION OF SEISMIC RECORDING SYSTEM AND ALSO OFFERS NETWORK TELEMETRY RECORDING SYSTEMS. ARAM SYSTEMS LTD. IS NOT A MANUFACTURER OF COMPUTERS OR COMPUTER SOFTWARE. MAIN FUNCTION OF SEISMIC SURVEY EQUIPMENTS MANUFACTURED BY ARAM SYSTEMS LTD. IS TO ACQUIRE ANALOG SYSTEMS DATA FROM GEOPHONES AND T O TRANSMIT THE DATA DIGITALLY TO THE CENTRAL EQUIPMENT, LINE TAP UNIT E TC., WHICH INTERCONNECTS BASELINE CABLE FROM THE RECORDING TRUCK TO MULTIPLE RECEIVER LINES ETC. IN THIS PROCESS, COMPUTERS MAY ALSO BE USED AS A PART OR TO OL; HOWEVER, OVERALL FUNCTIONALITY OF SOPHISTICATED SEISMIC SURVEY EQUIP MENT CANNOT BE SAID TO BE ITA NO. 1266/AHD/2012 ASIAN OILFIELD SERVICES LIMITED VS. DCIT ASSESSMENT YEAR : 2008-09 PAGE 6 OF 7 OF A COMPUTER. THE DESCRIPTION OF THE EQUIPMENT AS PER INVOICES ITSELF INDICATES THAT IT CANNOT BE CLASSIFIED AS 'COMPUTER ' AND ITS MAIN FUNCTION WAS TO CARRY OUT SEISMIC SURVEY. APPELLANT'S CONTENTION TH AT THE EQUIPMENT IN QUESTION WAS NOTHING BUT 'COMPUTER' CANNOT BE ACCEP TED. THE CLASSIFICATION BY CUSTOMS AUTHORITIES IS ALSO RELEVANT IN THIS REGARD . ASSESSING OFFICER'S ACTION IN NOT TREATING THE EQUIPMENT AS COMPUTERS/COMPUTER SOFTWARE PER-SE, ELIGIBLE FOR 60% DEPRECIATION AND INSTEAD ALLOWING DEPRECIAT ION @ 15% IS UPHELD. THE FACT THAT IN EARLIER YEAR, DEPRECIATION WAS ALLOWED @ 60% IS NOT A BAR ON TAKING A DIFFERENT AND CORRECT VIEW, WHEN FACTS OF THE CASE SO WARRANT. RESJUDICATA IS NOT A MAXIM TO BE FOLLOWED COMPULSOR ILY IN INCOME TAX MATTERS. GROUND NO.1.1 OF APPEAL IS DISMISSED. 5. THE ASSESSEE IS NOT SATISFIED AND IS IN FURTHER APPEAL BEFORE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF APPLIC ABLE LEGAL POSITION. 7. LEARNED COUNSEL HAS LAID A LOT OF EMPHASIS UPON THE TEST REPORT DATED 27.02.2008 SIGNED BY THE PSU CLIENTS WHO WERE RENDE RED SEISMIC SURVEY SERVICES. HE SUBMITS THAT THE DATE ON THE BILL OF ENTRY IS NO THING MORE THAN A TYPOGRAPHICAL ERROR, AND THAT, IN ANY EVENT, ONCE THE GOVT OFFICI ALS CONFIRM THAT THE EQUIPMENT WAS DULY INSTALLED AND FUNCTIONAL ON 27.02.2008, NOTHIN G REALLY TURNS ON THE BILL OF ENTRY. THIS PLEA, HOWEVER, DOES NOT IMPRESS US. ONCE THER E IS A REASONABLE EVIDENCE, AS IN THIS CASE, THAT A PART OF EQUIPMENT DID NOT EVEN CROSS THE CUSTOMS BEFORE 31.03.2008, THE DEPRECIATION ON SUCH EQUIPMENT CANN OT BE ALLOWED IN THE RELEVANT PREVIOUS YEAR. IF THE DATE GIVEN IN THE BILL OF EN TRY IS INCORRECT, IT IS FOR THE ASSESSEE TO OBTAIN NECESSARY CLARIFICATIONS FROM THE CUSTOMS AUTHORITIES. THIS DATE CANNOT BE IGNORED ON THE BASIS OF A RATHER VAGUE AND UNSUBSTA NTIATED CONFIRMATION THAT EXPERIMENTAL SHOOTING COMPLETED AND PRODUCTION SHOO TING COMMENCED ON 27.02.2008 AND, IN ANY CASE, IT DOES NOT EVIDENCE THAT THE R ELATED SPECIFIC EQUIPMENT WAS ACTUALLY USED ON 27.02.2008. LEARNED CIT(A) HAS VERY WELL ANALYZED ALL THESE ASPECTS AND WE ARE IN CONSIDERED AGREEMEN T WITH HIS REASONING AND CONCLUSIONS ON THIS POINT. SIMILARLY, LEARNED CIT( A)S STAND ABOUT ADMISSIBILITY OF 15% DEPRECIATION ALSO MEETS OUR APPROVAL. JUST BECA USE THE EQUIPMENT HAS AN ELEMENT OF DATA PROCESSING, WHICH IS PRESENT IN MOS T MODERN EQUIPMENTS, IT CANNOT BE TREATED AS A COMPUTER. THE VISUALS SHOWN TO US BY THE LEARNED COUNSEL DO NOT HELP US TO CONCLUDE THAT THE EQUIPMENT IS NOTHING B UT A HIGH END COMPUTER. UNDOUBTEDLY, IT DOES INVOLVE FEEDING THE INFORMATIO N THROUGH VARIOUS INPUT CONSOLES AND PROCESSING THE SAME BUT THEN ESSENTIALLY THE EQ UIPMENT IS A SEISMIC SURVEY EQUIPMENT AND PRESENCE OF PROCESSING WOULD NOT ALTE R ITS CHARACTER. ON THIS POINT ALSO, WE APPROVE THE STAND OF THE AUTHORITIES BELOW . 8. IN VIEW OF THE ABOVE DISCUSSION, AND BEARING IN MIND ENTIRETY OF THE CASE, WE APPROVE THE ORDERS OF THE AUTHORITIES BELOW AND DEC LINE TO INTERFERE IN THE MATTER. ITA NO. 1266/AHD/2012 ASIAN OILFIELD SERVICES LIMITED VS. DCIT ASSESSMENT YEAR : 2008-09 PAGE 7 OF 7 9. AS WE PART WITH THE MATTER, WE PLACE ON RECORD T HE FACT THAT THE ONLY GRIEVANCES AGITATED BEFORE US WERE WITH RESPECT TO ADMISSIBILITY OF DEPRECIATION IN RESPECT OF THE EQUIPMENT, WHICH, AS PER THE B/E NOT ING, DID NOT EVEN CROSS CUSTOM CHECK BEFORE THE END OF THE RELEVANT PREVIOUS YEAR AND WITH RESPECT TO ADMISSIBILITY OF DEPRECIATION @ 60% AS AGAINST DEPRECIATION @ 15% ALLOWED BY THE AUTHORITIES BELOW. NO OTHER ISSUE WAS PRESSED BEFORE US. 10. IN THE RESULT, THE APPEAL IS DISMISSED. PRONOUNCED IN THE OPEN COURT TODAY ON THE 8 TH DAY OF DECEMBER, 2017. SD/- SD/- S S GODARA PRAMOD KUM AR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) *BT AHMEDABAD, THE 8 TH DAY OF DECEMBER, 2017 COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD 1. DATE OF DICTATION: ......08.12.2017...AS PER S IX PAGES MANUSCRIPT OF HONBLE AM ATTACHED......... ............ 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 08.12.2017.......... 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S.: ........ 08.12.2017........... 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: .. 08.12.2017...................... 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK : ........ 08.12.2017................ 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK : . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: .. 8. DATE OF DESPATCH OF THE ORDER: ......