The DCIT, Circle-1(2), Baroda V. M/s. L.K. India Pvt.Ltd., Baroda

ITA 1283/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76901 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 30-06-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 29-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Keywords: Depreciation
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD (BEFORE SHRI ANIL CHATURVEDI, A.M. & SHRI KUL BHARA T, J.M.) I.T. A. NO. 1283/AHD/2011 (ASSESSMENT Y EAR: 2002-03) THE D.C.I.T, CIRCLE.1(2), BARODA V/S L.K. INDIA PVT. LTD., 165 GIDC, MAKARPURA, BARODA (APPELLANT) (RESPONDENT) PAN: AAACL 3236C APPELLANT BY : SHRI P.L. KUREEL, SR. D.R . RESPONDENT BY : NONE ( )/ ORDER DATE OF HEARING : 30-06-201 4 DATE OF PRONOUNCEMENT : 04 -07-2014 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER OF CIT(A)-IV, BARODA DATED 01.02.2011 FOR A.Y. 2002-03. 2. IN THIS CASE NOTICE OF HEARING WAS SENT THROUGH REG ISTERED A.D. TO THE ASSESSEE ON 15.05.2014 AT THE ADDRESS AVAILABLE ON RECORD, INFORMING HIM ABOUT THE DATE OF HEARING ON 30.06.2014. THE NOTIC E WAS RETURNED UNDELIVERED BY THE POSTAL AUTHORITIES WITH THE REMA RKS LEFT. THE ASSESSEE HAS NOT INTIMATED ABOUT THE CHANGE OF ITS ADDRESS. ON THE DATE OF HEARING THERE WAS NO REPRESENTATION FROM THE SID E OF ASSESSEE NOR ANY ITA NO 1283/ AHD/2011 . A.Y. 2002- 03 2 APPLICATION FOR ADJOURNMENT WAS MOVED. WE THEREFORE PROCEED TO DISPOSE OF THE APPEAL ON MERITS EX-PARTE QUA THE ASSESSEE. 3. THE FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 4. ASSESSEE IS A COMPANY STATED TO BE ENGAGED IN THE B USINESS OF MANUFACTURING AND SALES OF ELECTRICAL AND ELECTRONI C ITEMS. ASSESSEE FILED ITS ORIGINAL RETURN OF INCOME FOR A.Y. 02-03 ON 30. 10.2002 DECLARING TOTAL LOSS OF RS. 5,48,03,891/-. THEREAFTER THE ASSESSMEN T WAS FRAMED UNDER SECTION 143(3) VIDE ORDER DATED 18.02.2005 AND THE TOTAL LOSS WAS DETERMINED AT RS. 4,87,56,650/-. SUBSEQUENTLY NOTIC E UNDER SECTION 148 OF THE ACT WAS ISSUED ON 22.12.2005 AND THE CASE WA S REOPENED AND THEREAFTER ASSESSMENT WAS FRAMED UNDER SECTION 143( 3) READ WITH 147 OF THE ACT VIDE ORDER DATED 26.10.2006 AND THE TOTAL L OSS WAS DETERMINED AT RS. 4,04,27,064/-. AGGRIEVED BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) VIDE ORDER DATED 01.0 2.2011 GRANTED SUBSTANTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY TH E AFORESAID ORDER OF CIT(A), REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUND:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD.CIT(APPEALS) ERRED IN DELETING THE ADDITION OF RS. 27,28,526/- BY ALLOWIN G DEPRECIATION ON MOULDS @ 40% INSTEAD OF 25% ALLOWABLE ON THE MOULDS USED FOR MANUFACTURING FACI LITY OF THE ASSESSEE AS RUBBER AND PLASTIC GOODS FACTORY IN TERMS OF APENDIX-I TO RULE 5 OF THE INCO ME-TAX RULES, 1962 IGNORING THE FACT THAT THE COMMO N COMMERCIAL PRACTICE, FACTORIES PRODUCING ELECTRIC A ND ELECTRONIC GOODS ARE NOT KNOWN AS A RUBBER AND PLASTIC GOODS FACTORIES. 5. A.O NOTICED THAT ASSESSEE HAD CLAIMED DEPRECIATION ON DYES AND MOUNDS AT 40% AMOUNTING TO RS. 72,76,066/- ON THE G ROUND THAT ASSESSEE WAS INVOLVED IN THE MANUFACTURING OF PLAST IC GOODS. A.O WAS OF ITA NO 1283/ AHD/2011 . A.Y. 2002- 03 3 THE VIEW THAT THE FINAL PRODUCT OF THE COMPANY WERE ELECTRICAL PRODUCTS BEING SWITCHES AND SOCKETS AND PART OF IT CONTAINED ELECTRICAL CIRCUITS MADE OF COPPER AND ALUMINIUM. A.O WAS THEREFORE OF THE VIEW THAT THE BENEFIT OF 40% DEPRECIATION ALLOWANCE WAS ONLY AVAI LABLE TO INDUSTRIES WHICH WERE MANUFACTURING EXCLUSIVE PLASTIC PRODUCTS AND THAT THE ASSESSEE WAS NOT ELIGIBLE FOR DEPRECIATION ALLOWANC E AT 40% BECAUSE IT DID NOT ANSWER THE DESCRIPTION OF PLASTIC GOODS IND USTRY. HE ACCORDINGLY RESTRICTED THE DEPRECIATION TO RS. 27,28,526/- AND DISALLOWED THE EXCESS DEPRECIATION. AGGRIEVED BY THE ORDER OF A.O, ASSESS EE CARRIED THE MATTER BEFORE CIT(A). CIT(A) FOLLOWING THE DECISION OF HON BLE TRIBUNAL FOR A.Y. 01-02 IN THE ASSESSEES OWN CASE ALLOWED THE A PPEAL OF THE ASSESSEE BY HOLDING AS UNDER:- 3.2. I HAVE CONSIDERED THE MATTER. ITAT, AHMEDABAD IN APPELLANT'S CASE FOR A.Y.2001-02 HELD THAT DEPRECIATION @ 40% ON MOULDS IS TO BE ALLOWED IN VI EW OF DECISIONS OF ITAT BANGALORE IN THE CASE OF BPL REFRIGERATION LTD. 272 ITR 47 (BANGALORE) (80) AND KINETIC HONDA MOTORS LTD. 72 TTJ 72 (PUNE). RESPECTIVELY FOLLOWING ITAT AHMEDABAD'S DEC ISION IN APPELLANTS CASE FOR A.Y. 2001-02, DEPRECIATION IS DIRECTED TO BE ALLOWED AT THE RATE OF 40% ON MOULDS AND ADDITION OF RS.. 27,28,526/- I S CANCELLED. 6. AGGRIEVED BY THE ORDER OF CIT(A), REVENUE IS NOW IN APPEAL BEFORE US. 7. BEFORE US THE LD. D.R. RELIED ON THE ORDER OF A.O. WE HAVE HEARD THE LD. D.R. AND PERUSED THE MATERIAL ON RECORD. WE FIND TH AT CIT(A) WHILE DELETING THE ADDITION HAS NOTED THAT IN THE ASSESSE ES OWN CASE, THE HONBLE TRIBUNAL FOR A.Y. 01-02 BY FOLLOWING THE DE CISIONS OF OTHER TRIBUNAL HAD DECIDED THE ISSUE IN FAVOUR OF ASSESSE E. BEFORE US, NOTHING HAS BEEN BROUGHT ON RECORD BY REVENUE TO DEMONSTRAT E THAT THE DECISION OF TRIBUNAL IN ASSESSEES OWN CASE FOR EARLIER YEAR S WAS REVERSED BY THE ITA NO 1283/ AHD/2011 . A.Y. 2002- 03 4 HONBLE HIGH COURT. BEFORE US THE REVENUE HAS ALSO NOT PLACED ANY MATERIAL ON RECORD TO CONTROVERT THE FINDINGS OF CI T(A). IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO INTERFERE WIT H THE ORDER OF CIT(A) AND THUS DISMISS THIS GROUND OF APPEAL. 8. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 04 - 07 - 2014. SD/- SD/- (KUL BHARAT) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHM EDABAD