Mrs. Ramilaben D.Patel, Daman V. The ACIT.,Vapi Range, Vapi

ITA 1323/AHD/2009

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9307 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 25-01-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 23-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: OM PRAKASH MEENA
• Keywords: Business income; Depreciation; Cost of acquisition
• Section: 80IB; 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENC H (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 1323/AHD/2009 (ASSESSMENT YEAR: 2006-07) MRS. RAMILABEN D. PATEL PATEL FALIA, BHIMPORE, DAMAN-396210 V/S THE ASSISTANT COMMISSIONER OF INCOME TAX VAPI RANGE, VAPI (APPELLANT) (RESPONDENT) PAN: AITPP0626N APPELLANT BY : SHRI TUSHAR P. HEMANI, AR RESPONDENT BY : SHRI OM PRAKASH MEENA, SR. D .R. ( )/ ORDER DATE OF HEARING : 25 -01-201 7 DATE OF PRONOUNCEMENT : 31 -01-2017 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A), VALSAD DATED 25.02.2009 PERTAINING TO A.Y. 2006-07. ITA NO.1323/ AHD/2009 . A.Y. 2006-07 2 2. THE ASSESSEE HAS RAISED 10 SUBSTANTIVE GROUNDS OF A PPEAL. GROUNDS NO. 1 TO 9 ARE INTER-RELATED TO ONLY ONE ISSUE RELATING TO T HE CLAIM OF DEPRECIATION AT RS. 3,80,447/- AGAINST WHICH THE DEPRECIATION DETER MINED BY THE A.O. WAS AT RS. 3,30,447/-. 3. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEE DINGS, THE A.O. NOTICED THAT THE ASSESSEE HAS CLAIMED DEPRECIATION IN RESPE CT OF MANUFACTURING UNIT, M/S. JALARAM PACKAGING AT RS. 3,80,447/-. THE A.O. NOTICED THAT THE ASSESSEE WAS NOT CLAIMING ANY DEPRECIATION ON ITS A SSETS TILL A.Y. 2001-02. THE A.O. REWORKED THE WDV AND RECOMPUTED THE DEPREC IATION AS UNDER:- A. Y, OPENING WDV ADDITION DURING THE YEAR [NET] DEDUCTION TOTAL DEPRECIATION FOR THE YEAR CLOSING WDV BEFORE AFTER 1999-00 2395734 1871343 0 4267077 812142 3454935 2000-01 3454935 3900 25005 0 3483840 655142 2828695 2001-02 2328695 4585 849467 0 3679747 603991 3075756 2002-03 3075756 10055 0 747284 2338527 416909 1921620 2003-04 1921620 16890 57344 0 1995854 353511 1642343 2004-05 1642343 4101 675500 0 2321947 374943 1947004 2005-06 1947004 701500 0 467516 2180988 419052 1761936 2006-07 1761936 0 5500 - 1770086 330504 1439582 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT( A) BUT WITHOUT ANY SUCCESS. ITA NO.1323/ AHD/2009 . A.Y. 2006-07 3 5. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE STATED THAT AN IDENTICAL ISSUE WAS CONSIDERED BY THE CO-ORDINATE BENCH IN THE CASE OF JAYESH KALIDAS PATEL IN ITA NO. 1326/AHD/2009 AND ALLOWED THE CLAIM OF DEPR ECIATION. 6. THE LD. D.R. FAIRLY CONCEDED TO THIS. 7. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE FAC TS IN ISSUE BEFORE US. WE FIND FORCE IN THE CONTENTION OF THE LD. COUNSEL. THE CO-ORDINATE BENCH (SUPRA) WAS SEIZED WITH THE FOLLOWING GROUNDS:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). V ALSAD [HEREINAFTER REFERRED TO AS 'C.I.T.(A)'], HAS ERRED IN THE FACTS AND CIRCUMSTAN CES OF THE CASE AND IN LAW IN UPHOLDING THE DEPRECIATION DETERMINED BY THE ASSESSING OFFICER ( HEREINAFTER REFERRED TO AS 'A.O.') AT RS. 7,32,371/- AS AGAINST DEPRECIATION CLAIMED IN THE R ETURN OF RS.7,76,000/-. 2. THE LD. C.I.T. (A) HAS FAILED TO FULLY APPRECIATE T HE FACT THAT THE APPELLANT HAD NOT CLAIMED DEPRECIATION FOR THE ASSESSMENT YEARS 2000-2001 TO 2001-02 AND HAD ITA NO. 1326/AHD/2009 MR. JAYESH KALIDAS PATEL VS/ ACIT AY : 2006-07 CLAI MED DEPRECIATION IN ACCORDANCE WITH THE PROVISIONS OF LAW FOR THE FIRST TIME FOR THE ASSESS MENT YEAR 2002-03 AND SUBSEQUENTLY FOR THE ASSESSMENT YEAR 2003-04, 2004-05, 2005-06 AND 2006- 07. 3. THE LD. C.I.T. (A) HAS ERRED IN LAW AND IN THE FACT S AND CIRCUMSTANCES OF THE CASE IN UPHOLDING THE ACTION OF THE A.O. APPLYING RATIO OF THE BOMBAY HIG H COURT JUDGMENT IN THE CASE OF INDIAN RAYON CORPORATION LIMITED VS. C.I.T . 261 ITR 98 DESPITE THE FACT THAT THE RATIO OF THE SAID JUDGMENT IS LIMITED TO PECULIAR FACTS OF THAT CASE AND IS NOT A PPLICABLE ON THE FACTS OF THE APPELLANT. 4. THE LD. C.I.T. (A) OUGHT TO HAVE APPRECIATED AND FO LLOWED THE ORDERS OF THE BOMBAY TRIBUNAL IN THE CASE OF PLASTIBLENDS INDIA LTD. I.T.A. NO. 4542/MUM /99 ASSESSMENT YEAR 1996-97 AND KABRA EXTRUSION TECHNIK LTD. I.T.A. NO. 1517/MUM/99 ASSES SMENT YEAR 1995-96 WHEREIN BOMBAY TRIBUNAL HAD CONSIDERED THE SCOPE AND APPLICABILITY OF THE AFORESAID BOMBAY HIGH COURT JUDGMENT IN THE CASE OF INDIAN RAYON CORPORATION LIMITED VS. C.I.T . 261 ITR 98. 5. THE LD. C.I.T. (A) HAS ERRED IN THE FACTS AND CIRCU MSTANCES OF THE CASE, WHILST UPHOLDING THE ORDER OF THE A.O. WITH REGARD TO THE CLAIM OF DEPRECIATIO N, IN NOT APPRECIATION THAT THE APPELLANT HAD CLAIMED DEPRECIATION FIRST TIME IN A.Y. 2002-03 AND THAT APPELLANT HAD NOT CLAIMED DEPRECIATION IN THE ASSESSMENT YEARS 2000-01 AND 2001-02 [BASED ON THE JUDGEMENT OF THE SUPREME COURT IN THE CASE OF C.I.T. VS. MAHENDRA MILLS 243 ITR 56(S.C.)] AND NO DEPRECIATION HAS BEEN ALL OWED U/S. 32 OF THE ACT, IN THE ASSESSMENT OF THOSE YEARS. 6. THE LD. C.I.T. (A) HAS ERRED IN LAW IN UPHOLDING TH E COMPUTATION OF DEDUCTION OF DEPRECIATION MADE BY THE A.O. BY STATING THAT RATIO OF THE BOMBA Y HIGH COURT JUDGMENT IN THE CASE OF INDIAN RAYON CORPORATION LIMITED VS. C.I.T ., 261 ITR 98 WAS APPLICABLE EVEN TO PRIOR YEAR; AN D IN COMPUTING DEPRECIATION FOR THE YEARS 2000-01 AND 20 01-02 DESPITE THE FACT THAT THE APPELLANT ITA NO.1323/ AHD/2009 . A.Y. 2006-07 4 HAD NOT CLAIMED THE SAME AND NO DEPRECIATION HAD BE EN ALLOWED U/S. 32 OF THE ACT. TO THE APPELLANT IN THOSE YEARS ON ASSESSMENT. 7. THE LD. C.I.T. (A) OUGHT TO HAVE APPRECIATED THAT T HE SUPREME COURT IN THE CASE OF C.I.T. VS. MAHENDRA MILLS (S.C ) 243 ITR 56 HAS HELD THAT: ALLOWANCE OF DEPRECIATION IS CALCULATED ON THE WRI TTEN DOWN VALUE OF THE ASSETS, WHICH WRITTEN DOWN VALUE WOULD BE THE ACTUAL COST OF ACQUISITION LESS THE AGGREGATE OF ALL THE DEPRECIATION 'ACTUALLY ALLOWED' TO THE ASSESSEE FOR THE PAST YEARS 'ACTUAL LY ALLOWED' DOES NOT MEAN 'NATIONALLY ALLOWED. 8. THE LD. C.I.T. (A) OUGHT TO HAVE APPRECIATED THAT T HE AMENDMENT TO THE INCOME TAX ACT BY INSERTION OF EXPLANATION 5 TO SECTION 32 . TO OVERCOME RATIO OF THE SUPREME COURT JUDGMENT I N THE CASE OF C.I.T. VS. MAHENDRA MILLS (S.C .) 243 ITR 56; CAME IN TO EFFECT ONLY FROM 01.04.20 02. 9. THE LD. C.I.T. (A) OUGHT TO HAVE ALLOWED THE APPELL ANT'S CLAIM FOR DEPRECIATION AS COMPUTED BY THE APPELLANT IN ITS RETURN OF INCOME ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW. THE APPELLANT CRAVES LEAVE TO ADD TO ALTER, OR AMEN D ANY OF THE GROUNDS OF APPEAL AT OR BEFORE THE TIME OF HEARING OF THE APPEAL 2. BRIEFLY STATED FACTS ARE THAT THE MANUFACTURING UNIT OF THE ASSESSEE IS LOCATED IN THE UNION TERRIT ORY OF DAMAN, WHICH IS A BACKWARD UNION TERRITORY AS SP ECIFIED IN VIIITH SCHEDULE OF THE ACT. THE ASSESSEE IS, THUS, ELIGIBLE FOR DEDUCTION U/S. 80IB OF THE A CT FOR THE INCOME DERIVED FROM ITS MANUFACTURING UN IT. THE INCOME DERIVED FROM SUCH MANUFACTURING ACTIVITY IS ELIGIBLE FOR 100% DEDUCTION U/S. 80IB FOR A PERIOD OF FIRST FIVE YEARS AND DEDUCTION AT 25% IS ALLOWED FROM 6TH TO 10TH YEAR. THE ASSESSEE IS STAT ED TO BE FULFILLING ALL THE CONDITIONS LAID DOWN U/S. 801B OF THE ACT. IT WAS FOUND BY THE ASSESSING OFFI CER THAT, BEING 7TH YEAR OF MANUFACTURING ACTIVITY, THE ASSESSEE WAS ITA NO. 1326/AHD/2009 MR. JAYESH KALIDAS PATEL VS/ ACIT AY : 2006-07 ELIGIBLE FOR DE DUCTION @ 25% U/S. 80IB IN THE YEAR UNDER REFERENCE . FROM THE SCRUTINY OF THE PROFIT AND LOSS ACCOUNT FI LED ALONG WITH THE RETURN OF INCOME, IT WAS FOUND B Y THE ASSESSING OFFICER THAT THE ASSESSEE HAD CLAIMED EXCESS DEPRECIATION ON FIXED ASSETS FOR THE YEAR UNDER CONSIDERATION. AS AGAINST THE LEGITIMATE DEPR ECIATION CLAIM OF RS.7,32,371/- CALCULATED AS PER PROVISIONS OF LAW, THE ASSESSEE HAS CLAIMED DEPRECI ATION OF RS.7,76,000/-. THIS WAS BECAUSE OF THE FACT THAT THE ASSESSEE HAS NOT CLAIMED DEPRECIATION ON THE FIXED ASSETS TILL ASSESSMENT YEAR 2001-02. THE ASSESSING OFFICER FURTHER NOTICED THAT CERTAIN ASSESSEES ARE NOT CLAIMING DEPRECIATION THOUGH THEY HAVE NOT FORGONE THEIR RIGHT TO CLAIM DEPRECIATION. THEY STARTED CLAIMING DEPRECIATION FROM THE SIXTH YEAR ON THE ORIGINAL COST OF THE ASSETS. FROM SIXTH YEAR, THE DEDUCTION U/S.80IB IS LIMITED TO 25% OF THE ELIGIBLE INCOME OF SUCH INDUSTRIAL UNDERTAKINGS. BY ADOPTING THIS MODUS OPERANDI, THEY TRIED TO REDUCE THE TAX LIABILITY FROM THE SIXTH YEAR. CONSIDERING THE ABOVE, THE ASSESSING OFFICER HAS RE-CALCULATED THE INCOME OF THE INDUSTRIAL UNDERTAKING OF THE ASSESSE E ELIGIBLE FOR DEDUCTION U/S. 80IB BY ALLOWING CORRECT DEPRECIATION FOR THE YEAR UNDER CONSIDERATI ON AND THE EXCESS DEPRECIATION CLAIMED OF RS.43,629/- WAS WITHDRAWN AND ADDED BACK TO THE INC OME OF THE ASSESSEE. THE ASSESSING OFFICER ITA NO.1323/ AHD/2009 . A.Y. 2006-07 5 RECALCULATED THE DEDUCTION U/S. 80IB AFTER ENHANCEM ENT OF INCOME DUE TO PORTION OF DISALLOWANCE FROM DEPRECIATION CLAIM. 3. MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AU THORITY WHO AFTER CONSIDERING THE VARIOUS SUBMISSIONS MADE BY THE ASSESSEE, CONFIRMED THE ORD ER OF THE ASSESSING OFFICER. 3.1 BEFORE US, LD. AUTHORIZED REPRESENTATIVE RELIED UPON THE DECISION OF ITAT, RAJKOT BENCH IN THE CAS E OF KANDLA PORT TRUST VS. ACIT, REPORTED IN [2007] 1 04 ITD 1 (RAJKOT). IN LIGHT OF ABOVE DECISION OF IT AT, RAJKOT BENCH, THE AUTHORIZED REPRESENTATIVE SUBMITT ED THAT THE CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS.43,629/- IN RESPECT OF ALLEGED E XCESS DEPRECIATION. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 4. HAVING CONSIDERED THE RIVAL SUBMISSIONS AND MATE RIAL ON RECORD, WE FIND THAT THE CONTROVERSY BEFORE US IS WHETHER THE DEPRECIATION IS ALLOWABLE ON WRIT TEN DOWN VALUE ('WDV' IN SHORT) WORKED OUT AFTER DEDUCTING, FROM ACTUAL COST, DEPRECIATION 'ACTUALLY ALLOWED' OR DEPRECIATION WORKED OUT 'ARTIFICIALLY' , I.E., NOTIONAL DEPRECIATION IN RESPECT OF ALL THE Y EARS EVEN THOUGH NO DEPRECIATION HAS BEEN CLAIMED O R ALLOWED. WE FIND THAT SIMILAR ISSUE AROSE BEFORE TH E CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF KANDLA PORT TRUST VS. ACIT, REPORTED IN [2007] 104 ITD 1 (RAJKOT), WHEREIN IT HAS BEEN HELD THAT THE DEPRECIATION IS ALLOWABLE ON WDV DERIVED AFTER REDU CING DEPRECIATION 'ACTUALLY ALLOWED' FROM ACTUAL COST AND IT CANNOT BE STRETCHED TO MEAN DEPRECIATIO N 'NOTIONALLY ALLOWED'. IN THE PRESENT CASE, THE ASSESSEE IS A PROPRIETOR OF M/S. JALARAM PLASTIC IN DUSTRIES, WHICH IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF PLASTIC BAGS. ASSESSEE STARTED MAN UFACTURING ACTIVITIES IN THE ASSESSMENT YEAR 2000-01 AND STARTED CLAIMING DEPRECIATION FROM ASSE SSMENT YEAR 2002-03. IT IS UNDISPUTED FACT THAT THE INCOME DERIVED FROM MANUFACTURING ACTIVITIES OF THE ASSESSEE IS ELIGIBLE FOR 100% DEDUCTION U/S 80IB FOR A ITA NO. 1326/AHD/2009 MR. JAYESH KALIDAS PATEL VS/ ACIT AY : 2006-07 PERIOD OF FIRST FIVE YEARS AND DEDUCTION AT 25% IS ALLOWED FROM 6TH TO 1 0TH YEAR. IN THE YEAR UNDER CONSIDERATION, THE ASSESSEE CLAIMED DEPRECIATION OF RS.7,76,000/- AND THE ASSESSING OFFICER ADJUSTED NOTIONAL DEPRECIATION RIGHT FROM THE VERY BEGINNING, I.E. AY 2000-01, EVEN THOUGH NO DEPRECIATION WAS CLAIMED BY THE ASSESSEE IN SUCH INITIAL YEARS, AND DISALLOW ED THE DIFFERENTIAL DEPRECIATION OF RS.43,629/- (RS.7,26,000 - RS.7,32,371). IN THIS REGARD, WE FIN D THAT THE DECISION OF ITAT IN THE CASE OF KANDLA P ORT TRUST (SUPRA) IS SQUARELY APPLICABLE TO THE ASSESSE E'S CASE, WHICH READS AS UNDER:- 'SUB-CL. (B) OF S. 43(6) STATES THAT THE WDV OF ANY ASSET ACQUIRED BEFORE THE PREVIOUS YEAR SHALL BE THE ACTUAL COST OF THE ASSET LESS DEPRECIATION ACTU ALLY ALLOWED IN RESPECT OF THAT ASSET UNDER THE 1961 ACT OR UNDER INDIAN IT ACT , 1922 OR ANY OTHER LAW PREVAILING BEFORE COMING IN TO FORCE OF THAT ACT WHERE THE DEPRECIATION ALLOWED SHALL NOT INCLUD E DEPRECIATION ALLOWED UNDER THE ACT OF 1922 WHICH WERE NOT DEDUCTIBLE IN DETERMINING THE WDV. I T MAY BE NOTED THAT THE CL. (B) OF S. 43(6) CLEARLY SPEAKS OF DEPRECIATION ACTUALLY ALLOWED AND NOT THE DEPRECIATION ALLOWABLE. THE KEY WORD IN CL. (B) OF S. 43(6) IS 'ACTUALLY'. IT IS THE ANTITHESIS OF THAT WHICH IS MERELY SPECULATIVE, THEORETICAL ITA NO.1323/ AHD/2009 . A.Y. 2006-07 6 OR IMAGINARY. THE CONNOTATION OF THE PHRASE 'ACTUAL LY ALLOWED' IS THUS LIMITED TO DEPRECIATION ACTUALLY TAKEN INTO ACCOUNT OR GRANTED AND GIVEN EF FECT TO, I.E., DEBITED BY THE AO AGAINST THE INCOME OF THE BUSINESS WHILE COMPUTING THE TAXABLE INCOME OF THE ASSESSEE. IT CANNOT BE STRETCHED TO MEAN 'NOTIONALLY ALLOWED' OR MERELY AL LOWABLE ON A NOTIONAL BASIS OR PROVIDED IN BOOKS OF ACCOUNT BY HAVING AN ACCOUNTING ENTRY. THE QUESTION OF ALLOWING DEPRECIATION ARISES, ONLY WHEN FOR THE PURPOSE OF ASSESSING INCOME-TAX T HE PROFITS AND GAINS OF THE BUSINESS ARE TO BE COMPUTED. IF NO INCOME-TAX IS PAYABLE, WHETHER ON A CCOUNT OF EXEMPTION OR OTHERWISE, PROFITS AND GAINS OF THE BUSINESS ARE NOT REQUIRED TO BE CO MPUTED AND THERE IS NO OCCASION FOR ALLOWING DEPRECIATION. THUS, THERE IS A CLEAR DISTINCTION BE TWEEN DEPRECIATION ACTUALLY ALLOWED AND DEPRECIATION WHICH WOULD HAVE BEEN ALLOWED IF THE P ROFITS AND GAINS OF THE BUSINESS HAD TO BE COMPUTED FOR ASSESSMENT OF INCOME-TAX, AND UNDER S. 43(6) THE WDV IS CALCULATED AFTER DEDUCTION FROM THE ORIGINAL COST, ONLY THAT DEPRECIATION THAT HAS ACTUALLY BEEN ALLOWED IN THE COMPUTATION OF THE PROFITS AND GAINS OF THE BUSINESS DURING THE PROCEEDINGS FOR ASSESSMENT OF INCOME-TAX IN EARLIER YEARS. THE WORD 'ACTUALLY' USED IN S. 43(6) WAS NOT REDUNDANT AND MUST BE GIVEN ITS FULL EFFECT. DEPRECIATION DEEMED TO HAVE BEEN ALLOWED OR WHICH MIGHT HAVE BEEN ALLOWED IF THE PROFITS AND GAINS OF BUSINESS HAD BEEN ASSESSED TO INCOME-TAX IN PREVIOUS YEAR IS CERTAINLY NOT DEPRECIATION 'ACTUALLY ALLOWED' AND CANNOT BE DEDUC TED FROM THE ORIGINAL COST. THE WDV DURING THE PREVIOUS YEAR IN QUESTION WOULD BE THE ORIGINAL COST LESS NIL, I.E., THE ORIGINAL COST. THE ONLY DEPRECIATION ALLOWED UNDER THE IT ACT IS THE DEPRECIATION ALLOWED BY ANY ITO WHEN COMPUT ING ITS PROFITS AND GAINS OF BUSINESS FOR ASSESSMENT PURPOS ES. 'ACTUALLY ALLOWED' MEANS ALLOWED BY AN IT AUTHORITY; DEPRECIATION CLAIMED BY THE ASSESSEE ITS ELF IN ITS OWN ACCOUNT IS NOT DEPRECIATION ALLOWED TO IT. THE LANGUAGE USED IN S. 43(6) IS VERY CLEAR. SO LONG AS THERE IS NO AMBIGUITY IN THE STATUTORY LANGUAGE, RESORT TO ANY INTERPRETATIVE PR OCESS TO UNFOLD THE LEGISLATIVE INTENT BECOMES IMPERMISSIBLE. THE SUPPOSED INTENTION OF THE LEGISL ATURE CANNOT THEN BE APPEALED TO WHITTLE DOWN THE STATUTORY LANGUAGE WHICH IS OTHERWISE UNAMBIGUO US. IF THE INTENDMENT IS NOT IN THE WORDS, IT IS NOWHERE ELSE. THE NEED FOR INTERPRETATION ARISES WHEN THE WORDS USED IN THE STATUTE ARE, ON THEIR OWN TERMS, AMBIVALENT AND DO NOT MANIFEST THE INTENTION OF THE LEGISLATURE. WHEN WORDS ACQUIRE A PARTICULAR MEANING OR SENSE BECAUSE OF TH EIR AUTHORITATIVE CONSTRUCTION BY SUPERIOR COURTS, THEY ARE PRESUMED TO HAVE BEEN USED IN THE SAME SENSE WHEN USED IN A SUBSEQUENT LEGISLATION IN THE SAME OR SIMILAR CONTEXT. IT IS S ETTLED LAW THAT THE EXPRESSIONS USED IN A TAXING STATUTE WOULD ORDINARILY BE UNDERSTOOD IN THE SENSE IN WHICH IT IS HARMONIOUS WITH THE OBJECT OF THE STATUTE TO EFFECTUATE THE LEGISLATIVE INTENTION . IT FOLLOWS, THEREFORE, THAT EVEN IN THE CASE OF ASSETS ACQUIRED BEFORE THE PREVIOUS YEAR, WHERE IN THE PAST, NO DEPRECIATION WAS COMPUTED, ACTUALLY ALLOWED OR CARRIED FORWARD, FOR NO FAULT O F THE ASSESSEE THE WDV SHALL UNDER CL. (B) OF S. 43(6) , BE THE ACTUAL COST OF THE ASSETS TO THE ASSESSEE. -- MADEVA UPENDRA SINAI VS. UNION OF INDIA ITA NO.1323/ AHD/2009 . A.Y. 2006-07 7 & ORS . (1975) 98 ITR 209 ( SC), RAMPUR DISTILLERY & CHEMICAL WORKS LTD. VS. CI T (1965) 55 ITR 338 ( ALL), CIT VS. COIMBATORE MOTOR TRANSPORT CO-OPERATI VE SOCIETY FOR EX-SERVICEMEN (1968) 70 ITR 165 ( MAD) AND G.C. ASSOCIATES VS. DY. CIT (2003) 80 TTJ (PUNE) 539 RELIED ON.' 4. NOTHING CONTRARY WAS BROUGHT TO OUR KNOWLEDGE ON BEHALF OF THE REVENUE. FACTS BEING SIMILAR, SO FOLLOWING THE SAME REASONING, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN DISALLOWING THE SUM OF RS.43, 629/- OUT OF THE DEPRECIATION CLAIM OF RS.7,76,000/- MADE BY THE ASSESSEE. THE ASSESSING OFFICER IS DIRECTED ACCORDINGLY. 8. A PERUSAL OF THE ABOVE ORDER OF THE CO-ORDINATE BEN CH SHOWS THAT THE CO- ORDINATE BENCH HAD CONSIDERED IDENTICAL SET OF FACT S, THEREFORE, RESPECTFULLY FOLLOWING THE FINDINGS OF THE CO-ORDINATE BENCH (SU PRA), WE DIRECT THE A.O. TO ALLOW THE CLAIM OF DEPRECIATION MADE BY THE ASSE SSEE AT RS. 3,80,447/-. GROUNDS NO. 1 TO 9 ARE ACCORDINGLY ALLOWED. 9. GROUND NO. 10 RELATES TO THE RE-COMPUTATION OF DEDU CTION U/S. 80IB OF THE ACT BY THE A.O. 10. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEE DINGS AND ON PERUSING THE CLAIM OF DEDUCTION U/S. 80IB, THE A.O. NOTICED THAT THE BUSINESS INCOME WORKED OUT FOR AVAILING BENEFIT U/S. 80IB IS INCLUS IVE OF INCOME FROM SALE OF SCRAP AMOUNTING TO RS. 4,194/- AND SUNDRY BALANCE W RITTEN BACK OF RS. 32,158/-. 11. THE ASSESSEE WAS ASKED TO JUSTIFY ITS CLAIM. THE AS SESSEE FILED A DETAILED REPLY IN SUPPORT OF ITS CLAIM WHICH DID NOT FIND AN Y FAVOUR WITH THE A.O. WHO PROCEEDED BY INCLUDING THE INCOME FROM SALE OF SCRA P AND SUNDRY BALANCES WRITTEN BACK AND RE-COMPUTED THE DEDUCTION U/S. 80I B OF THE ACT. ITA NO.1323/ AHD/2009 . A.Y. 2006-07 8 12. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT( A) BUT WITHOUT ANY SUCCESS. 13. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE STATED THAT INSOFAR AS THE ISSUE RELATING TO THE INCOME FROM SALE OF SCRAP IS CONCER NED, THE SAME IS DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE B Y THE HONBLE HIGH COURT OF GUJARAT IN THE CASE OF HARJIVANDAS JHUTHABHAI ZA VERI IN 258 ITR 785 AND ALSO BY THE DECISION OF THE CO-ORDINATE BENCH IN TH E CASE OF MIRA INDUSTRIES IN 87 ITD 475. IT IS THE SAY OF THE LD. COUNSEL THA T INSOFAR AS THE SUNDRY BALANCES WRITTEN BACK IS CONCERNED, THE LIABILITIES HAVE BEEN ALLOWED IN EARLIER YEARS WHICH HAVE GONE TO REDUCE THE CLAIM O F DEDUCTION U/S. 80IB OF THE ACT AND SINCE THOSE LIABILITIES HAVE NOW BEEN W RITTEN BACK, THE SAME SHOULD BE CONSIDERED AS PART OF THE INCOME ELIGIBLE FOR THE CLAIM. 14. PER CONTRA, THE LD. D.R. STRONGLY SUPPORTED THE ORD ERS OF THE AUTHORITIES BELOW. 15. WE HAVE CAREFULLY CONSIDERED THE ORDERS OF THE AUTH ORITIES BELOW AND HAVE GONE THROUGH THE JUDICIAL DECISIONS RELIED UPON THE LD. D.R. 16. IT IS TRUE THAT THE INCOME FROM SALE OF SCRAP WAS C ONSIDERED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF HARJIVANDA S JHUTHABHAI ZAVERI (SUPRA) AND ALSO BY THE CO-ORDINATE BENCH IN THE CA SE OF MIRA INDUSTIES (SUPRA). SINCE, THIS ISSUE HAS BEEN DECIDED IN FAVO UR OF THE ASSESSEE AND ITA NO.1323/ AHD/2009 . A.Y. 2006-07 9 AGAINST THE REVENUE BY THE HONBLE JURISDICTIONAL H IGH COURT OF GUJARAT, WE HAVE NO HESITATION IN DIRECTING THE A.O. TO INCLUDI NG INCOME FROM SALE OF SCRAP AS PART OF THE INCOME ELIGIBLE FOR DEDUCTION U/S. 80IB OF THE ACT. 17. THE SUNDRY BALANCES WRITTEN BACK ARE NOTHING BUT TH E LIABILITIES ALLOWED IN EARLIER YEARS. SINCE IN THE EARLIER YEARS, THE SAME HAVE GONE TO REDUCE THE PROFIT OF THE ASSESSEE AND SINCE NOW THEY HAVE BEEN WRITTEN BACK THE SAME SHOULD THE PART OF THE ELIGIBLE INCOME FOR THE CLAI M OF DEDUCTION U/S. 80IB OF THE ACT. WE, ACCORDINGLY, DIRECT THE A.O. TO ALL OW THE CLAIM OF DEDUCTION U/S. 80IB OF THE ACT FOR THE INCOME FROM SALE OF SC RAP AND FOR THE SUNDRY BALANCES WRITTEN BACK. GROUND NO. 10 IS ACCORDINGLY ALLOWED. 18. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 31 - 01- 20 17 SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 31 /01/2017 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,AHME DABAD