ACIT, Cir-2(1), Hyderabad V. M/s. Krishna Sai Exports Pvt. Ltd, Hyderabad

ITA 1332/HYD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61943 (ITAT-HYDERABAD)
• Duration Of Justice: 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 15-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMISHA SRIVASTAVA GUPTA
• Assessee Lawyers: SESHAGIRI RAO
• Keywords: Depreciation; Additional depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER AND SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO.1332/HYD/2011 : ASSESSMENT YEAR 2008 -09 ASSTT . COMMISSIONER OF INCOME - TAX, CIRCLE 2(1), HYDERABAD (APPELLANT) V/S M/S. KRISHNA SAI EXPORTS (P)LTD., HYDERABAD ( PAN - AACCK 4118 N ) (RESPONDENT) APPELLANT BY : SMT. AMISHA SRIVASTAVA GUPTA RESPONDENT BY : SHRI SESHAGIRI RAO DATE OF HEARING 4.7.2012 DATE OF PRONOUNCEMENT O R D E R PER D.KARUNAKARA RAO, ACCOUNTANT MEMBER: THIS APPEAL BY THE REVENUE FOR ASSESSMENT YEAR 20 08-09 IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME-TAX(APPEALS)-I, HYDERABAD DATED 9.5.2011 FOR THE ASSESSMENT YEAR 20 08-09. 2. EFFECTIVE GROUNDS OF THE REVENUE IN THIS APPEAL READ AS FOLLOWS- 1. THE LEARNED CIT(A) ERRED IN ALLOWING OF ADDITIONAL DEPRECIATION BY HOLDING THAT EXTRACTION OF GRANITE FROM MINES, SALE OF GRANITE BLOCKS AMOUNT TO MANUFACTURING/PRODUCTION, THEREFORE ASSES SEE FIRM ELIGIBLE FOR ADDITIONAL DEPRECIATION. 2. THE CIT(A) HAS TOTALLY IGNORED THE MATERIAL FACTS A ND RELEVANT LEGAL PROVISION. A COGNATE SECTION 35E USES BOTH THE TERM S EXTRACTION AND PRODUCTION WHICH WOULD MEAN THAT M ERE EXTRACTION CANNOT BE PRODUCTION. 3. THE AO HAS CLEARLY BROUGHT OUT FACTS WHICH WOULD NO T ESTABLISH THAT WHAT TOOK PLACE IN ASSESSEES CASE WAS SIMPLY EXTRA CTION, NOT PRODUCTION. THE AO'S ACTION IS FURTHER CORROBORATED BY MADRAS H.C. DECISION IN THE CASE OF GOMATESH GRANITES 118 TAXMA N 141(MAD) AND THE CIT(A) HAS TOTALLY IGNORED IT. ITA NO.1332/HYD/2011 M/S. KRISHNA SAI EXPORTS (P)LTD., HYDERABAD 2 THUS, THE GRIEVANCE OF THE REVENUE IN THIS APPEAL I S AGAINST THE ACTION OF THE CIT(A) IN ALLOWING THE CLAIM OF THE ASSESSEE FO R ADDITIONAL DEPRECIATION UNDER S.32(1)(IIA) OF THE ACT, TREATIN G THE ACTIVITY OF QUARRYING AND EXTRACTION OF GRANITE BLOCKS, AS AN A CTIVITY OF PRODUCTION ENTITLING THE ASSESSEE TO ADDITIONAL DEPRECIATION. 3. AT THE OUTSET, THE LEARNED COUNSEL FOR THE A SSESSEE SUBMITTED THAT THE ISSUE INVOLVED IN THIS APPEAL IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE VISAKHAPATNAM BENCH DECISION OF THE TRIBUNAL DATED 23.6.2011 IN ASSESSEES OWN CASE(ITA NO.493/VIZAG/2 010) FOR THE ASSESSMENT YEAR 2007-08. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON T HE OTHER HAND, STRONGLY SUPPORTED THE ORDER OF THE ASSESSING OFFIC ER, REITERATING THE CONTENTIONS URGED IN THE GROUNDS OF THIS APPEAL. 5. WE HEARD BOTH SIDES AND PERUSED THE ORDERS OF T HE LOWER AUTHORITIES AND OTHER MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE IMPUGNED ORDER OF THE CIT(A) IN ALLOWING ADDITIONAL DEPRECIATION, AS CLAIMED BY THE ASSESSEE, IS BASED ON THE DECISION O F THE FIRST APPELLATE AUTHORITY, VIZ. CIT(A) VIJAYAWADA, IN ASSESSEES OW N CASE FOR THE ASSESSMENT YEAR 2007-08. IT HAS BEEN BROUGHT TO OU R NOTICE, AS NOTED ABOVE, THAT THE SAID DECISION OF THE CIT(A) IN FOR THE ASSESSMENT YEAR 2007-08 HAS BEEN CONFIRMED BY THE VISAKHAPATNAM BEN CH DECISION OF THE TRIBUNAL IN ITA NO.493/VIZAG/2010, VIDE ORDER DATED 23.6.2011, COPY OF WHICH IS FURNISHED BEFORE US. THE TRIBUNAL, AFTER CONSIDERING THE ISSUE WHETHER THE MINING AND EXTRACTION ACTIVITIES OF THE ASSESSEE WOULD AMOUNT TO PRODUCTION IN THE LIGHT OF THE EARLIER DE CISION OF THE TRIBUNAL IN THE CASE OF SOUTHERN ROCKS & MINERALS(P)LTD. IN ITA NOS.604, 605/V/2004 DATED 31.3.2008, AND OTHER CASE LAW ON THE POINT, U PHELD THE VIEW TAKEN BY THE CIT(A) FOR THAT YEAR AND DISMISSED THE APPEA L OF THE REVENUE. IN ITA NO.1332/HYD/2011 M/S. KRISHNA SAI EXPORTS (P)LTD., HYDERABAD 3 THE CIRCUMSTANCES AND FACTS AND CIRCUMSTANCES OF TH E CASE FOR THE YEAR UNDER APPEAL, BEING IDENTICAL TO THE ONES CONSIDERE D BY THE TRIBUNAL FOR THE PRECEDING YEAR, RESPECTFULLY FOLLOWING THE DECI SION OF THE COORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE, WE FI ND NO INFIRMITY IN THE IMPUGNED ORDER OF THE CIT(A), WHICH IS ACCORDINGLY UPHELD AND THE GROUNDS OF THE REVENUE IN THIS APPEAL ARE DISMISSED. 6. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 6TH JULY, 20 12 SD/- SD /- (ASHA VIJAYARAGHAVAN) (D.KARUNAKARA RAO) JUDICIAL MEMBER. ACCOUNTANT MEMBER. DT/- 6 TH JULY, 2012 COPY FORWARDED TO: 1. 2. M/S. KRISHNA SAI EXPORTS (P)LTD., PLOT NO.271 MLA COLONY, ROAD NO.12, BANJARA HILLS, HYDERABAD ASSTT. COMMISSIONER OF INCOME-TAX, CIRCLE 2(1), HYD ERABAD 3 . COMMISSIONER OF INCOME - TAX(APPEALS) - I HYDERABAD 4 . COMMISSIONER OF INCOME - TAX I , HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE ITAT, HYDERABAD B.V.S.