DCIT, CHENNAI V. Shasun Pharmaceuticals Ltd., CHENNAI

ITA 1413/CHNY/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77225 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 10-04-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 24-06-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: GURU BHASHYAM
• Assessee Lawyers: S SRIDHAR
• Keywords: Depreciation

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B B ENCH, CHENNAI . , !' # , $ % BEFORE SHRI A.MOHAN ALANKAMONY ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./I.T.A.NO. 1413/MDS/2013 ( / ASSESSMENT YEAR : 2006-07) DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-VI(2), AAYAKAR BHAVAN, NEW BLOCK, 7 TH FLOOR, CHENNAI-600 034. VS M/S. SHASUN PHARMACEUTICALS LTD. (FORMERLY M/S. SHASUN CHEMICALS & DRUGS LTD.) BATRA CENTRE, 28, SARDAR PATEL ROAD, GUINDY, CHENNAI-600 032. PAN:AAACS5031L ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. GURU BHASHYAM, JCIT /RESPONDENT BY : MR. S.SRIDHAR, ADVOCATE / DATE OF HEARING : 10 TH APRIL , 2014 ! /DATE OF PRONOUNCEMENT : 25 TH APRIL, 2014 & / O R D E R PER CHALLA NAGENDRA PRASAD, JM: THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER O F THE COMMISSIONER OF INCOME TAX (APPEALS)-VI, CHENNA I DATED 19.02.2013 FOR THE ASSESSMENT YEAR 2006-07. THE ONLY GRIEVANCE OF THE REVENUE IN THIS APPEAL IS T HAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DIREC TING THE ITA NO.1413/MDS/2013 2 ASSESSING OFFICER TO ALLOW DEPRECIATION ON FIXED AS SETS WORTH OF ` 1,50,96,529/- . 2. THE ASSESSING OFFICER WHILE COMPLETING ASSESSMEN T DISALLOWED DEPRECIATION OF ` 4,45,74,725/- ON CERTAIN FIXED ASSETS ON THE GROUND THAT ASSESSEE HAS NOT PRODUCED ORIGINAL BILLS, INVOICES AND ACQUISITION OF ASSETS IN SPITE OF GIVING SEVERAL OPPORTUNITIES TO THE ASSESSEE. IN THE COUR SE OF APPEAL PROCEEDINGS, THE ASSESSEE COULD PRODUCE INVO ICES FOR AN AMOUNT OF ` 18,09,95,972/- IN SUPPORT OF PURCHASE OF FIXED ASSETS BY THE ASSESSEE AND THEREFORE COMMISSIONER O F INCOME TAX (APPEALS) DIRECTED THE ASSESSING OFFICER TO ALLOW DEPRECIATION ON THESE ASSETS. FURTHER, THE COMMISSI ONER OF INCOME TAX (APPEALS) ALLOWED CLAIM OF THE ASSESSEE FOR DEPRECIATION ON FIXED ASSETS WORTH ` 1,50,96,529/- STATING THAT ASSESSEE HAS MADE PAYMENTS THROUGH BANKING CHANNELS TO THE SUPPLIERS. COMMISSIONER OF INCOME TAX (APPEALS) WAS OF THE OPINION THAT MANY OF THE ASSETS PURCHASED CAN B E RELATED TO THE PAYMENTS AND DIRECTED THE ASSESSING OFFICER TO ACCEPT ITA NO.1413/MDS/2013 3 THE EVIDENCES FOR PURCHASE OF FIXED ASSETS AND ALLO W DEPRECIATION. 3. DEPARTMENTAL REPRESENTATIVE SUBMITS THAT ASSESSE E NEVER PRODUCED BILLS AND VOUCHERS IN SUPPORT OF ACQ UISITION OF FIXED ASSETS TO THE EXTENT OF ` 1,50,96,529/- EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE COMMISSIONER OF INC OME TAX (APPEALS). THE BANK STATEMENTS FURNISHED BY THE ASS ESSEE ARE NOT CONCLUSIVE PROOF THAT THESE PAYMENTS RELATE TO THE FIXED ASSETS ACQUIRED BY THE ASSESSEE AND IN THE AB SENCE OF ANY BILLS, VOUCHERS AND CONFIRMATION FROM PARTIES D EPRECIATION CANNOT BE ALLOWED. 4. COUNSEL FOR THE ASSESSEE PLACES RELIANCE ON THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) AND THE BAN K STATEMENTS AND SUBMITS THAT THOUGH INVOICES WERE NO T FURNISHED, ASSESSEE MADE PAYMENTS TO SUPPLIERS THRO UGH BANKING CHANNELS AND PAYMENTS ARE DEFINITELY RELATE D TO PURCHASES OF ASSETS AND THEREFORE, DEPRECIATION IS TO BE ALLOWED. ITA NO.1413/MDS/2013 4 5. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHOR ITIES. THE ASSESSING OFFICER DENIED DEPRECIATION FOR WANT OF BILLS, VOUCHERS AND CONFIRMATION FROM SUPPLIERS FOR FIXED ASSETS ACQUIRED BY THE ASSESSEE. THE COMMISSIONER OF INCOM E TAX (APPEALS) BASED ON THE BANK STATEMENTS WHERE PAYMEN TS WERE ROUTED THROUGH BANKING CHANNELS WAS OF THE VIE W THAT CLAIM OF THE ASSESSEE CAN BE ACCEPTED AS THE PAYMEN TS WERE MADE TO SUPPLIERS. THIS, IN OUR VIEW, IS NOT ACCEPT ABLE. FIRST OF ALL, THE ASSESSEE DID NOT PRODUCE ANY INVOICES AND BILLS EITHER BEFORE ASSESSING OFFICER OR COMMISSIONER OF INCOME TAX (APPEALS). THE ASSESSEE COULD HAVE PRODUCED DUPLICA TE BILLS OR CONFIRMATIONS FROM SUPPLIERS STATING THAT ASSESS EE PURCHASED CERTAIN MACHINERY, FIXED ASSETS ON VARIOU S DATES FOR WHICH PAYMENTS WERE MADE. THE ASSESSEE ALSO DID NOT FURNISH ANY STATEMENT CORRELATING PAYMENTS MADE WIT H REFERENCE TO INVOICES WHICH ARE NOT AVAILABLE WITH IT, AS THE ASSESSEE SAID TO HAVE MADE PAYMENTS FOR THE ASSETS FOR WHICH BILLS AND INVOICES ARE AVAILABLE AND THEREFOR E, IN THE ABSENCE OF ANY SUCH BILLS, VOUCHERS AND CONFIRMATIO NS OR DUPLICATE BILLS, THE SUBMISSION THAT ASSESSEE MADE PAYMENTS ITA NO.1413/MDS/2013 5 THROUGH BANKING CHANNELS AND THEREFORE ASSESSEE ACQ UIRED FIXED ASSETS AND THUS DEPRECIATION IS ALLOWABLE IS NOT CORRECT. IN THE CIRCUMSTANCES, WE ARE OF THE CONSIDERED VIEW THAT ASSESSING OFFICER HAS RIGHTLY DISALLOWED DEPRECIATI ON ON FIXED ASSETS OF ` 1,50,96,529/-. WE THEREFORE, REVERSE THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) ON THIS IS SUE AND RESTORE THAT OF THE ASSESSING OFFICER. 6. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY, THE 2 5 TH DAY OF APRIL, 2014 AT CHENNAI. SD/- SD/- ( A.MOHAN ALANKAMONY ) ( CHALLA NAGEN DRA PRASAD ) ' . #!$ # ( %& '() * ) ACCOUNTANT MEMBER / *+ JUDICIAL MEMBER/ ( *+ %( /CHENNAI, ,* /DATED, 25 TH APRIL, 2014 SOMU *- ./0/ /COPY TO: 1. APPELLANT 2. /RESPONDENT 3. 123 /CIT(A) 4. 1 /CIT 5. /4' 5 /DR 6. '67 /GF .