DCIT, Circle - 3(1), Kolkata , Kolkata V. M/s. Dozco Infratech Pvt. Limited , Kolkata

ITA 1438/KOL/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4536 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 04-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHRUBA JYOTI RAY JCITSRDR
• Assessee Lawyers: A K TIBREWAL
• Keywords: Depreciation; Transfer pricing
• Section: 143(3); 14A; 154

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH VIRTUAL COURT A KOLKATA BEFORE SHRI J.SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI S.S.GODARA, JUDICIAL MEMBER ITA NO.1438/KOL/2018 ASSESSMENT YEAR: 2010-11 DY. COMMISSIONER OF INCOME TAX, CIRCLE-3(1), AAYKAR BHAWAN, 4 TH FLOOR, ROOM NO. 19, KOLKTA-69 / V/S . M/S DOZCO INFRATECH PVT. LTD., 6, WATERLOO STREET, 3 RD FLOOR, KOLKATA-69 [ PAN NO.AACCD 3819 M ] /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI DHRUBAJYOTI RAY, JCIT-SR-DR /BY RESPONDENT SHRI A.K.TIBREWAL, FCA /DATE OF HEARING 01-10-2020 /DATE OF PRONOUNCEMENT 21-10-2020 /O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2010-11 ARISES AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS)-7, KOLKATAS O RDER DATED 28.03.2018 PASSED IN CASE NO.232/CIT(A)-7/KOL/WARD.3(1)/17-18 INVOLVI NG PROCEEDINGS 143(3) R.W.S. 263 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . HEARD BOTH THE PARTIES. CASE FILE(S) PERUSED. 2. WITH THE CONSENT OF BOTH THE LEARNED REPRESENTAT IVE(S) AND IN VIEW OF THE REVENUES AVERMENTS IN ITS CONDONATION PETITION / A FFIDAVIT DATED 04.07.2018, WE ITA NO.1438/KOL/2018 ASSESSMENT YEAR 2010-11 DCIT, CIR-3(1), KOL. VS. M/S DOZCO INFRATEC H PVT. LTD. P AGE 2 CONDONE THE FIFTEEN DAYS DELAY IN FILING OF THE CA SE. THE CASE IS NOW TAKEN UP FOR ADJUDICATION ON MERITS. 3. THE REVENUES SOLE SUBSTANTIVE GRIEVANCE RAISED IN THE INSTANT APPEAL CHALLENGES CORRECTNESS OF THE CIT(A)S ACTION PARTL Y REVERSING THE ASSESSING OFFICERS ACTION DISALLOWING THE ASSESSEES DEPRECIATION CLAI M @ 30% ON EXCAVATORS, BULL DOZERS AND WHEEL LOADERS AS UNDER:- I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE A ND THE SUBMISSIONS MADE BY THE APPELLANT. I AM GUIDED IN THIS CASE BY THE JUDG MENT OF THE JURISDICTIONAL TRIBUNAL IN THE CASE OF BOTHRA SHIPPING SERVICES V. ACIT IN ITA. NOS. 58- 59/KO1/2013 AND C.O. NOS. 25&26/KOL/2013 , WHICH DECISION HAS FOLLOWED THE EARLIER DECISION OF THE HON'BLE KOLKATA ITAT IN THE CASE OF SAME ASSESSEE WHICH WAS LATER UPHELD BY THE HON'BLE CALCUTTA HIGH COURT IN ITS ORDER DATED 5 TH SEPTEMBER, 2016 IN ITAT NO.144 OF 2015. IN THE JUDGMENT OF BOTHRA SHIPPING SERVICES V ACIT IN ITA. NOS. 58-59/KOI/2013 AND C.O. NOS. 25&26/KO1/2013, THE HON'BLE JURISDICTIONAL TRIBUNAL HAD LAID DOWN THE LAW THAT THE MATTER OF ALLOWANCE OF DEPRECIATION AT A L OWER OF HIGHER RATE IS A DEBATABLE MATTER/ISSUE WHICH CANNOT BE MADE SUBJECT OF A PROCEEDING AND/OR ORDER PASSED UNDER SECTION 154 OF THE INCOME TAX AC T, 1961. MOREOVER I HAVE SEEN FROM DOCUMENTS FILED BEFORE ME THAT THE APPELL ANT ASSESSEE HAD WITHDRAWN ITS PETITION FILED UNDER SECTION 154 BEFO RE PASSING OF THE ASSESSMENT ORDER DATED 06.11.2015. THE JUDICIAL DISCIPLINE BIN DS ME TO CONCUR WITH THE VIEW TAKEN BY THE HON'BLE CALCUTTA HIGH COURT IN TH E CASES OF SAIL DSP VR EMPLOYEES ASSOCIATION 1998 VS. UNION OF INDIA (2003 ) 128 TAXMAN 704 (CALCUTTA) AND UTANKA ROY VS. DIRECTOR OF INCOME TA X, INTERNATIONAL TAXATION TRANSFER PRICING, KOLKATA & ORS IN W.P NO 369 OF 20 14, JUDGMENT DATED 15TH DECEMBER, 2016 THAT ADMISSION OF THE ASSESSEE DOES NOT MAKE AN INCOME TAXABLE WHICH IS OTHERWISE NOT TAXABLE. I ALSO REFE R TO THE RECENT UNREPORTED JUDGMENT OF HON'BLE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF SAJJAN INDIA LIMITED V ADDITIONAL COMMISSIONER OF INCOME TAX, RA NGE-7(2), MUMBAI [ IT APPEAL NOS. 5550 & 5751 (MUM.) OF 2015 AND 6865. (M UM.) OF 2016 ], ORDER DATED 28.11.2017] WHEREIN THE TRIBUNAL HAS HELD AS UNDER: WE FIND MERIT IN THE CONTENTION OF THE ASSESSEE THA T ONCE TRIBUNAL HAS ADJUDICATED MATTER IN ASSESSEE'S FAVOUR THEN MERELY BECAUSE DISALLOWANCE WAS MADE IN RETURN OF INCOME VOLUNTARI LY UNDER A WRONG BELIEF, THE ASSESSEE CANNOT RESILE FROM ITS POSITIO N IS NOT ACCEPTABLE. THE MANDATE OF THE 1961 ACT IS TO TAX REAL INCOME AND N OT AN INCOME WHICH WAS NEVER THE INCOME CHARGEABLE TO TAX IN THE HANDS OF THE ASSESSEE BUT WAS DECLARED UNDER A WRONG BELIEF OR NOTION. THE MA NDATE OF THE 1961 ACT IS TO TAX REAL INCOME AND TAX CAN ONLY BE LEVIE D UNDER THE AUTHORITY OF LAW. THUS, IF AFTER VERIFICATIONS AND FOLLOWING THE RATIO OF LAW DECIDED BY THE TRIBUNAL IN THE INSTANT CASE, IF THE DISALLO WANCE FALLS BELOW THE ITA NO.1438/KOL/2018 ASSESSMENT YEAR 2010-11 DCIT, CIR-3(1), KOL. VS. M/S DOZCO INFRATEC H PVT. LTD. P AGE 3 DISALLOWANCE U/S 14A OFFERED BY THE ASSESSEE IN RET URN OF INCOME, BE IT MAY THE REVENUE CANNOT CHARGE TAX ON INCOME WHICH N EVER WAS THE INCOME OF THE ASSESSEE CHARGEABLE TO TAX WITHIN THE MANDATE AND PROVISIONS OF THE 1961 ACT AS THE TAX CAN ONLY BE L EVIED BY THE AUTHORITY OF LAW. I FIND THAT AS WAS THE CASE BEFORE THE HON'BLE MUMB AI BENCH IN THE CASE OF SAJJAN INDIA LIMITED (SUPRA) THE ISSUE IN HAND IS C OVERED IN THE FAVOUR OF THE ASSESSEE BY THE DECISION OF THE JURISDICTIONAL TRIB UNAL IN BOTHRA SHIPPING SERVICES VS. CIT IN ITA NO. 586/KOL/2010 , WHICH HAD BEEN APPROVED AND UPHELD BY THE HON'BLE CALCUTTA HIGH COURT IN ITS OR DER DATED 5TH SEPTEMBER, 2016 IN ITAT NO.144 OF 2015. A PERUSAL OF THE SAID JUDGMENTS AND OTHER JUDGMENTS REFERRED TO BY THE ASSESSEE SHOWS THAT DE PRECIATION CLAIMED BY THE ASSESSEE @ 30% ON EXCAVATORS, BULL DOZERS AND WHEEL LOADERS HAS BEEN RIGHTLY CLAIMED AND SHOULD BE ALLOWED IN FULL AS AG AINST @ 15% ALLOWED BY THE ASSESSING OFFICER. HOWEVER, THE OTHER TWO ASSETS VI Z. ROCK BREAKER AND MOTOR GRADER IN MY OPINION DOES NOT FALL WITHIN THE AMBIT OF THE EXPRESSION ' MOTOR LORRIES ' AS PROVIDED IN INCOME TAX RULES, 1962 AND ARE ALS O NOT COVERED IN THE JUDGMENTS CITED BEFORE ME AND THUS DEPRECIATION CLAIMED ON THE SAID TWO ASSETS HAD BEEN RIGHTLY REDUCED BY THE ASSESSING OF FICER TO 15% AS AGAINST THE CLAIM OF 30% MADE IN THE RETURN OF THE ASSESSEE. 4. LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY CONTENDED DURING THE COURSE OF HEARING THAT THE ASSESSING OFFICER HAD RIGHTLY D ISALLOWED THE ASSESSEES IMPUGNED HIGHER DEPRECIATION CLAIM ON THE GROUND THAT IT WAS NOT A TRANSPORTER SO AS TO BE ENTITLED FOR HIGHER RATE OF 30% DEPRECIATION ON THE ABOVE STATED MACHINERY. 5. WE FIND NO MERIT IN THE REVENUES SOLE SUBSTANTI VE GRIEVANCE. IT HAS COME ON RECORD THAT THE CIT(A) HAS GONE BY THE HON'BLE JURI SDICTIONAL HIGH COURTS DECISION (SUPRA) TO HOLD THAT ALL THE ABOVE STATED THREE CAT EGORIES OF THE CORRESPONDING PLANT AND MACHINERY ITEMS I.E. EXCAVATORS, BULL DOZERS AND WH EEL LOADERS CARRY DEPRECIATION RELIEF OF @ 30% THAN @ 15% CANVASSED AT THE REVENUE S BEHEST. LEARNED AUTHORIZED REPRESENTATIVE FURTHER PIN-POINTED THE FACT THAT TH IS TRIBUNALS DECISION IN BOTHRA SHIPPING SERVICES (SUPRA) HAD ALSO FOLLOWED CIT VS. GAYLORD CONSTRUCTION 190 TAXMANN.COM 406 (KERALA) & GUJCO CARRIERS VS. CIT 2 50 ITR 50 (GUJ) DECIDING THE SIMILAR ISSUE AGAINST THE DEPARTMENT. WE HOLD IN TH IS FACTUAL BACKDROP THAT THE CIT(A)S LOWER APPELLATE DISCUSSION GRANTING HIGHER RATE OF DEPRECIATION @ 30% IN CASE OF FOREGOING THREE CATEGORIES OF MACHINERY THE REBY TREATING THEM AKIN TO MOTOR ITA NO.1438/KOL/2018 ASSESSMENT YEAR 2010-11 DCIT, CIR-3(1), KOL. VS. M/S DOZCO INFRATEC H PVT. LTD. P AGE 4 LORRIES UNDER THE MOTOR VEHICLES ACT & RULES ; ARE LIABLE TO BE AFFIRMED. WE ORDER ACCORDINGLY. 6. THIS REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 21/10/2020 SD/- SD/- ( &) (( &) (J.SUDHAKAR REDDY) (S.S.GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER *DKP-SR.PS ) - 21/10/2020 / KOLKATA / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-DCIT, CIR-3(1), AAYKAR BHAWAN, 4 TH FLOOR, ROOM NO.19 CHOWRINGHEE SQ UARE, KOLKATA-69 2. /RESPONDENT-M/S DOZCO INFRATECH PVT. LTD., 6, WATER LOO STSREET, 3 RD FLOOR KOLKATA-69 3. , - / CONCERNED CIT 4. - - / CIT (A) 5. . ((, , , /DR, ITAT, KOLKATA 6. 2 / GUARD FILE. BY ORD ER/ , /TRUE COPY/ ,,