The ITO, Ward-4(3), Ahmedabad V. Adi Finechem Ltd. ( Formerly known as H.K. Finchem Ltd.,), Ahmedabad

ITA 127/AHD/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0629 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 30-08-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 13-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: UKTI PARIKH HE; S N SOPARKAR
• Keywords: Depreciation; Tax effect

Judgement Text

ITA NO. 12 7 /AHD/201 4 ASSESSMENT YEAR: 200 4 - 05 PA GE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND S S GODARA JM] ITA NO. 127 /AHD/201 4 ASSESSMENT YEAR : 20 0 4 - 05 INCOME TAX OFFICER, WARD 4 ( 3 ), AHMEDABAD. . .... ..... .. ..... APPELLANT VS. ADI FINECHEM LT D. .. ........... RESPONDENT (FORMERLY KNOWN AS H.K. FINECHEM LTD) 253/P, CHEKHALA, SANAND KADI ROAD, TA. SANAND, DIST. AHMEDABAD. [A AA CH 5113 Q ] APPEARANCES BY JAMES KURIAN FOR THE APPELLANT S.N. SOPARKAR & UKTI PARIKH FOR THE RESPONDENT HEARIN G CONCLUDED ON: 30 /0 8 / 20 16 ORDER PRONOUNCED ON : 31 /08/ 20 16 O R D E R PER PRAMOD KUMAR , AM: BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 17 TH OCTOBER, 2013 PASSED BY THE LEA RNED CIT(A) ON T HE FOLLOWING GROUND S : - 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.54,51,826/ - MADE ON ACCOUNT OF DISALLOWANCE OF EXCESS CLAIM OF DEPRECIATION , WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND THE MATERIAL BROUGH T ON RECO RD. ITA NO. 12 7 /AHD/201 4 ASSESSMENT YEAR: 200 4 - 05 PA GE 2 OF 4 2. ON THE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE, THE L D . CIT ( A ) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSE S SING OFFICER. 3. IT IS, THEREFOR E , PRAYED THAT THE ORD E R OF THE LD . CIT ( A ) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED TO THE ABOVE EXTENT. 2. TO ADJUDICATE ON THIS APPEAL, ONLY A FEW MATERIALS NEED TO BE T AKEN NOTE OF. THIS IS SECOND R OUND OF PROCEEDINGS. IN THE FIRST ROUND OF PROCEEDINGS, THIS TRIBUNAL, VIDE ORDER DATED 8 TH NOVEMBER 2010, DECIDED T HE ISS UE IN FAVOUR OF THE ASSESSEE IN PRINCIPLE BUT REMITTED THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION IN THE LIGHT OF THE DECISION. AN APPEAL AGAINST THE STAND SO TAKEN BY THE TRIBUNAL HAS BEEN DISMISSED BY THE TRIBUNAL ON ACCOUNT OF LOW TAX EFFECT. THE MATTER HAS THUS REACHED FINALITY. HOWEVER, IN THE MEANTIME, WHEN ASSESSING OFFICER WAS TO GIVE EFFECT TO THE DIRECTIONS OF THE TRIBUNAL, HE DECLINED TO DO SO, INTER ALIA, ON THE GROUND THAT THE DECISION IS NOT ACCEPTABLE TO THE ASS ESSING OFFICER AN D THE MATTER WAS BEFORE HON BLE HIGH COURT. LEARNED CIT(A), IN THIS BACKDROP, HAS DELETED THE DISALLOWANCE, BY OBSERVING AS FOLLOWS: - I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, THE ASSESSMENT ORDER AND THE WRITTEN SUBMISSION OF T HE APPELLANT. THE AO REDUCED THE CLAIM OF DEPRECIATION FOR THE CURRENT YEAR BY HOLDING THAT THE DEPRECIATION FOR ASSESSMENT YEARS 2000 - 01 AND 2001 - 02 WOULD BE DEEMED TO HAVE BEEN ALLOWED EVEN THOUGH THE APPELLANT DID NOT CLAIMED DEPRECIATION IN THOSE YEA R. HE ACCORDINGLY WORKED OUT THAT THE WDV FOR SUBSEQUENT YEARS BY REDUCING THE AMOUNT OF NOTIONAL DEPRECIATION FOR THOSE TWO YEARS AND CONTINUED THE SAME FOR ASSESSMENT YEAR 2004 - 05. THIS RESULTED IN A REDUCTION OF CLAIM OF DEPRECIATION BY AN AMOUNT OF R S. 5451826/ - . THE OTHER FACT WHICH IS IMPORTANT AT PRESENT IS THAT THE MATTER HAD BEEN SET ASIDE BY THE HONOURABLE ITAT TO THE FILE OF THE AO FOR EXAMINING THE CLAIM OF DEPRECIATION IN LIGHT OF ITS DECISION IN THE CASE OF MAHARASHTRA POLY CANE INDUSTRIES, SUPRA. HOWEVER, THE AO AFTER GIVING THE OPPORTUNITY TO THE APPELLANT DID NOT ALLOW THE CLAIM OF DEPRECIATION. THE APPELLANT HAS ACCORDINGLY MADE THIS APPEAL. IT HAS BEEN REQUESTED BY THE APPELLANT THAT THE AO MAY BE DIRECTED TO ALLOW THE CLAIM OF DEPRECIA TION IN THE LIGHT OF THE DECISION OF HONOURABLE ITAT IN THE CASE OF MAHARASHTRA POLY CANE, SUPRA. IT HAS BEEN POINTED OUT BY THE APPELLANT THAT THE SET ASIDE PROCEEDINGS WERE ITA NO. 12 7 /AHD/201 4 ASSESSMENT YEAR: 200 4 - 05 PA GE 3 OF 4 DULY ATTENDED BY ITS AUTHORISED REPRESENTATIVE AND THE WRITTEN SUBMISSIONS WERE F ILED. HOWEVER, THE AO DID NOT CONSIDER THE SAME AND REPEATED THE OLD ORDER. IT HAS AGAIN GIVEN BEFORE ME A COPY OF THE SUBMISSION WHICH WAS SUBMITTED BEFORE THE ASSESSING OFFICER. A PERUSAL OF THE COPY SHOW THAT THE SAME WAS R ECEIVED BY THE AO HIMSELF HOW EVER INADVERTENTLY THE SAME HAS NOT BEEN CONSIDERED BY HIM WHILE DECIDING THE CASE. THE FACTS SHOW THAT THE APPELLANT HAD NOT CLAIMED DEPRECIATION IN A.Y 2000 - 2001. THE COPIES OF ORDERS OF HONOURAB E ITAT FOR THOSE YEARS ALSO SHOW THAT THE CLAIM HAS NOT BEEN ALLOWED. THE APPELLANT HAS ALSO SUBMITTED ASSESSMENT ORDER FOR BOTH THE YEARS AS WELL AS THE ORDER OF CIT APPEAL FOR ASSESSMENT YEAR 2000 - 01. IN THE APPELLATE ORDER THE HONOURABLE CIT(A) HAS CLEARLY DIRECTED IN PARA 7.3 THAT THE INCOME FOR THE YEAR SHOULD BE WORKED OUT WITHOUT GIVING EFFECT TO THE CURRENT YEAR DEPRECIATION AS THE SAME WAS NOT CLAIMED. WHILE DOING SO HE HAS FOLLOWED THE HONOURABLE ITAT ORDER IN THE CASE OF THE APPELLANT FOR A.Y. 2002 - 03. IN THE CASE OF MAHARASTRA POLY CANE, SUPRA, WHICH HAS BEEN REFERRED TO BY THE HONOURABLE ITAT, WHILE SETTING ASIDE THE PROCEEDINGS OF THE CASE TO THE FILE OF THE AO, IT HAS CLEARLY BEEN HELD THAT IN CASE THE DEPRECIATION HAS NOT BEEN CLAIMED NOR ALLOWED BY THE AO FOR ANY ASSESSMENT YEAR THE WDV FOR THAT YEAR SHOULD BE WORKED OUT WITHOUT GIVING EFFECT TO THE DEPRECIATION. IT IS CLEAR FROM FACTS THAT THE DEPRECIATION HAS NEITHER BEEN CLAIMED NOR ALLOWED THE WDV FOR SUBSEQUENT YEARS THAT IS ASSESSMENT YEAR 2002 - 03 AND ULTIMATELY THE PRESENT ASSESSMEN T YEAR SHOULD BE WORKED OUT AS IF THE DEPRECIATION HAS NOT BEEN REDUCED FROM THE WDV IN THOSE YEARS. THE FINDINGS OF THE HONOURABLE TRIBUNAL ARE ABSOLUTELY CLEAR AND ARE BINDING ON THE AO. HE IS ACCORDINGLY DIRECTED TO ALLOW THE DEPRECIATION IN THE LIGHT O F THE FACTUAL FINDING AS WELL AS THE DIRECTIONS OF THE HONOURABLE ITAT. ACCORDINGLY THE DISALLOWANCE OF DEPRECIATION AMOUNTING TO RS. 54518267 - IS DIRECTED TO BE DELETED. 3. THE ASSESSING OFFICER IS NOT SATISFIED AND IS IN APPEAL BEFORE US. 4 . WE HAVE HEA RD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACT OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. 5. WE FIND THAT SO FAR AS THE DECISION OF THE TRIBUNAL, IN THE FIRST ROUND OF PROCEEDINGS, IS CONCERNED, IT HAS ATT AINED FINALITY AS HON BLE HIGH COURT H A S DISMISSED R EVENUE S APPEAL AGAINST THE SAID DECISION. IN THE IMPUGNED ORDER, LEARNED CIT(A) HAS ONLY GRANTED RELIEF IN TERMS OF DIRECTIONS OF THE TRIBUNAL. WE ITA NO. 12 7 /AHD/201 4 ASSESSMENT YEAR: 200 4 - 05 PA GE 4 OF 4 HAVE ALSO NOTED THAT THERE IS NO MATERIAL WHATSOEVER B EFORE US TO CONTROVERT THE FACTUAL FINDINGS OF THE LEARNED CIT(A). IN THESE CIRCUMSTANCES, WE SEE NO REASONS TO INTERFERE IN THE MATTER, AND W E MUST, THEREFORE, CONFIRM THE FINDINGS AND CONCLUSIONS OF THE LEARNED CIT(A). WE DO SO. 6. WE, THEREFORE, DISMI SS THE GRIEVANCES OF THE ASSESSING OFFICER AS UNSUSTAINABLE IN LAW AND ON FACTS OF THIS C A SE. 7. IN THE RESULT, THE APPEAL IS DISMISSED. PRONOUNCED IN THE OPEN COUR T TODAY ON THE 31 ST DAY OF AUGUST, 2016. SD/ - SD/ - S S GODARA PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: 31 ST DAY OF AUGUST ,2016 . COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSI STANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD