M/s Aspee Sons, Baddi V. DCIT, Circle, Parwanoo

ITA 1334/CHANDI/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 2554 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 23-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Depreciation; Additional depreciation
• Section: 32

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, SMC, CHANDIGARH .. , !' BEFORE SHRI N.K.SAINI, VICE PRESIDENT ./ ITA NO.1334/CHD/2018 / ASSESSMENT YEAR : 2014-15 M/S ASPEE SONS, VILLAGE KURANWALA, NEAR MANDHALA FOREST BARRIER, TEHSIL-BADDI, DISTT. SOLAN (HP) VS. THE DC IT , PARWANOO (HP). ./ PAN NO:AAQFA1827R / APPELLANT / RESPONDENT / ASSESSEE BY : SHRI PARIKSHIT AGGARWAL ! / REVENUE BY : SMT. MEENAKSHI VOHRA, SR. DR ' #$ / DATE OF HEARING : 07.03.2019 %&'($ / DATE OF PRONOUNCEMENT : 07.03.2019 #/ ORDER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 14.08.2018 OF THE CIT(A) SHIMLA. 2. THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS A PPEAL : 1. THAT ON THE FACTS, CIRCUMSTANCES AND LEGAL POSIT ION OF THE CASE, THE WORTHY CIT(A) IN ITS ORDER DATED 14.08.2018 HAS ERRED IN P ASSING THAT ORDER IN CONTRAVENTION OF THE PROVISIONS OF SECTION 250(6) O F THE INCOME TAX ACT, 1961. 2. THAT ON FACTS, CIRCUMSTANCES AND LEGAL POSITION OF THE CASE, THE WORTHY CIT(A) WAS UNJUSTIFIED IN CONFIRMING THE ACTION OF LD. AO OF MAKING ADDITION OF RS. 9,86,497/- BY THRUSTING ADDITIONAL DEPRECIATION ON THE APPELLANT OUT OF PROFIT DEDUCTIBLE U/S 80IC OF THE ACT EVEN WHEN THE APPELL ANT HAD NOT CLAIMED THE SAME ON ADDITIONS TO PLANT & MACHINERY EVEN WHEN THE BAS IC INGREDIENTS OF S. 32(L)(IIA) WERE NOT EXAMINED BY LD. AO EVEN WHEN TH E LD. AO HAS ERRED IN NOT ALLOWING THIS ADDITIONAL DEPRECIATION AS A CLAIM OF EXPENSE OUT OF TAXABLE BUSINESS INCOME, 3. THAT THE APPELLANT CRAVES LEAVE FOR ANY ADDITION, D ELETION OR AMENDMENT IN THE GROUNDS OF APPEAL ON OR BEFORE THE DISPOSAL OF THE SAME. 3. FROM THE AFORESAID GROUND, IT IS GATHERED THAT ON LY GRIEVANCE OF THE ASSESSEE RELATES TO THE CONFIRMATI ON OF ITA NO.1334/CHD/2018 A.Y. 2014-15 PAGE 2 OF 4 ADDITION OF RS. 9,86,497/- MADE BY THE AO ON ACCOUN T OF ADDITIONAL DEPRECIATION. 4. THE FACTS RELATED TO THIS ISSUE IN BRIEF ARE TH AT THE ASSESSEE FILED THE RETURN OF INCOME ON 22.09.2014 D ECLARING NIL INCOME BY CLAIMING DEDUCTION OF RS. 4,10,11,7 84/- U/S 80IC OF THE ASSESSEE. HOWEVER, THE AO MADE THE ADD ITION OF RS. 9,86,497/- BY OBSERVING IN PARA 4 OF THE ASSESS MENT ORDER DATED 18.11.2016 AS UNDER : 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED THAT THE ASSESSEE HAS MADE ADDITION TO THE TUNE OF RS.32,58. 516/- & RS.33,47,948/- TO THE BLOCK OF PLANT AND MACHINERY DURING THE PREV IOUS YEAR 2013-14 RELEVANT TO THE A.Y . 2014-15. IT IS NOTICED THAT THE ASSESSEE HAS CLAIME D AND SUO-MOTO ALLOWED NORMAL DEPRECIATION ON THE BLO CK OF PLANT & MACHINERY. HOWEVER, AS PER PROVISIONS OF SECTION 32 (L)(IIA) OF THE INCOME TAX ACT, 1961,ADDITIONAL DEPRECIATION WHICH WORKS O UT TO RS.6,51,703/- (20% OF THE RS. 32,58,516/-) & RS.3,34,794/- (10% O F THE RS.33,47,948/-) WAS REQUIRED TO BE ALLOWED AND WDV REDUCED TO THE E XTENT OF RS.9,86,497/.. BY NOT ALLOWING/REDUCING THE ADDITIO NAL DEPRECIATION THE ASSESSES HAS INCREASED ITS PROFITABILITY AND RESULT ANTLY CLAIMED EXCESS DEDUCTION U/S 80-IC TO THE TUNE OF RS.9.86.497/-. A CCORDINGLY, ON ORDER SHEET DATED 19.09.2016 THE AR OF THE ASSESSEE HAS B EEN SHOW CAUSE AS TO WHY ADDITIONAL DEPRECIATION TO THE TUNE OF RS.9,86, 497/- MAY NOT BE ALLOWED, REDUCING THE WDV TO THIS EXTENT AND ALSO T HE SAME MAY NOT BE REDUCED FROM THE ELIGIBLE PROFIT FOR THE PURPOSE OF DEDUCTION U/S 80-IC OF THE ACT. TO THIS, THE COUNSEL OF THE ASSESSEE COULD NOT FURNISH ANY PLAUSIBLE REPLY. THEREFORE, AN AMOUNT OF RS.9,86,49 7/- IS ADDED BACK TO THE TAXABLE INCOME OF THE ASSESSEE. 1 AM SATISFIED THAT THE ASSESSEE HAS WILLFULLY FURNISHED INACCURATE PARTICULARS OF INCOM E AND HAS CONCEALED TRUE & CORRECT PARTICULARS OF SUCH INCOME, THEREFOR E PENALTY PROCEEDINGS U/S 271(L)(C) OF THE INCOME TAX ACT. 1961 HAVE BEEN INITIATED SEPARATELY FOR FURNISHING INACCURATE PARTICULARS OF INCOME. (ADDITION OF RS.9,86,497/-) 5. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATT ER TO THE LD. CIT(A) WHO SUSTAINED THE ADDITION MADE BY THE A O. NOW, THE ASSESSEE IS IN APPEAL. 6. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THA T THIS ISSUE IS SQUARELY COVERED BY THE ORDER DATED 01.08. 2018 IN ITA 472/CHD/2018 FOR THE ASSESSMENT YEAR 2012-13 IN THE CASE OF M/S UNISON PHARMACEUTICALS, BADDI VS DCIT, CIRCLE, ITA NO.1334/CHD/2018 A.Y. 2014-15 PAGE 3 OF 4 PARWANOO DECIDED BY THE ITAT BENCH B CHANDIGARH. COPY OF THE SAID ORDER WAS FURNISHED WHICH IS PLACED ON RECORD. 7. IN HER RIVAL SUBMISSIONS, THE LD. SR.DR SUPPO RTED THE ORDERS OF THE AUTHORITIES BELOW. 8. I HAVE CONSIDERED THE RIVAL SUBMISSIONS OF BO TH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVA ILABLE ON RECORD. IT IS NOTICED THAT AN IDENTICAL ISSUE HAVI NG SIMILAR FACTS HAS BEEN DECIDED IN ASSESSEE'S FAVOUR IN THE CASE OF M/S UNISON PHARMACEUTICALS, BADDI VS DCIT, CIRCLE, PARWANOO (SUPRA) VIDE ORDER DATED 01.08.2018 WHEREI N THE RELEVANT FINDINGS HAVE BEEN GIVEN IN PARA 3 TO 6 WH ICH READ AS UNDER : 3. IN THIS APPEAL, AS PER THE CONTENTIO N RAISED, THE ASSESSEE IS MAINLY AGGRIEVED BY THE ACTION OF T HE CIT(A) IN UPHOLDING THE ADDITION ON ACCOUNT OF NON-CLAIM OF ADDITIONAL DEPRECIATION AND THEREBY REDUCING THE E LIGIBLE INCOME OF THE ASSESSEE U/S 80IC OF THE ACT AS THE ABOVE DISAL LOWANCES WILL GO TO ADD/REDUCE THE BUSINESS INCOME OF THE ASSESSEE, WHI CH OTHERWISE, IS ELIGIBLE FOR DEDUCTION U/S 80IC OF THE ACT. THE LD. COUNSEL FOR ASSESSEE HAS FURTHER STATED IT WILL NOT HAVE ANY EFFECT ON T HE TAX LIABILITY OF THE ASSESSEE. 4. THE LD. DR, ON THE OTHER HAND, HAS SUPPORTED THE ORDER OF THE LD. CIT(A). 5. WE HAVE CONSIDERED THE ABOVE SUBMISSIONS OF T HE LD. COUNSEL FOR ASSESSEE. SO FAR AS THE ADDITION MADE BY THE ASSESS ING OFFICER IN RESPECT OF ADDITION MADE ON ACCOUNT OF CLAIM OF LES S DEPRECIATION IS CONCERNED, WE FIND FORCE IN THE CONTENTION OF THE L D. COUNSEL FOR ASSESSEE THAT THE DISALLOWANCE WOULD ADD TO THE BUSINESS INCOME OF THE ASSESSEE, WHEREAS, THE ADDITION MA DE ON ACCOUNT OF CLAIM OF LESS DEPRECIATION WILL GO ON REDUCING THE BUSINESS INCOME OF THE ASSESSEE, WHICH OTHERWISE, ADMITTEDLY, IS ELIGI BLE FOR DEDUCTION U/S 80IC OF THE ACT. IN VIEW OF THE ABOVE, THE ABOVE ST ATED DISALLOWANCE CANNOT BE EXIGIBLE TO TAXATION SEPARATELY. 6. IN VIEW OF THE ABOVE THE ISSUES RAISED BY TH E ASSESSEE VIDE GROUND NOS. 3 8S 4 OF THE APPEAL ARE DECIDED WITH THE OBSE RVATION THAT ENHANCEMENT/ADDITION INTO THE INCOME OF THE ASSESSE E ON ACCOUNT OF THE AFORESAID DISALLOWANCES WILL NOT MAKE THE ASSES SEE LIABLE TO PAY THE ADDITIONAL TAX, RATHER IT WILL INCREASE/DECREAS E OF THE BUSINESS INCOME OF THE ASSESSEE, WHICH OTHERWISE, IS ELIGIBL E FOR DEDUCTION U/S 80IC OF THE ACT. THE AO IS DIRECTED TO FOLLOW THE A BOVE DIRECTIONS. THEREFORE, THE GROUND NOS. 3 & 4 RAISED BY THE ASSE SSEE ARE ACCORDINGLY, ALLOWED IN ABOVE TERMS. ITA NO.1334/CHD/2018 A.Y. 2014-15 PAGE 4 OF 4 9. SO, RESPECTFULLY FOLLOWING THE AFORESAID REF ERRED TO ORDER DATED 01.08.2018 IN THE CASE OF M/S UNISON PHARMACEUTICALS, BADDI VS DCIT, CIRCLE, PARWANOO IN ITA 472/CHD/2018 FOR THE ASSESSMENT YEAR 2012-13, THE ADDITION MADE BY THE AO AND SUSTAINED BY THE LD. CI T(A) IS DELETED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH MARCH,2019. SD/- ( . . / N.K. SAINI) !'/ VICE PRESIDENT POONAM &) *+ ,+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ' - / CIT 4. ' - ( )/ THE CIT(A) 5. +./ 0 , $0 , 123/4 / DR, ITAT, CHANDIGARH 6. /35# / GUARD FILE &) ' / BY ORDER, 6! / ASSISTANT REGISTRAR