The ACIT, Circle-4(1), Visakhapatnam V. M/s Srivastha Power Projects Ltd., Visakhapatnam

ITA 146/VIZ/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0616 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2003-2004
• Appeal Filed On: 04-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C V S MURTHY
• Assessee Lawyers: SUBRATA SARKAR
• Keywords: Depreciation
• Section: 139

Judgement Text

ITA NO.146/VIZAG/2010 SRIVASTHA POWER PROJECTS LTD., PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO. 146/VIZAG/2010 ASSESSMENT YEAR: 2003-04 ACIT CIRCLE-4(1), VISAKHAPATNAM SRIVASTHA POWER PROJECTS LTD PANDURANGAPURAM (APPELLANT) VS. (RESPONDENT) PAN NO: AABCV 0045 N APPELLANT BY: SHRI C.V.S. MURTHY, CA RESPONDENT BY: SHRI SUBRATA SARKAR, CIT(DR) ORDER PER SHRI B. R. BASKARAN, ACCOUNTANT MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 9-12- 2009 PASSED BY LEARNED CIT (A) VISAKHAPATNAM AND IT RELATES TO THE ASSESSMENT YEAR 2003-04. 2. THE DISALLOWANCE OF DEPRECIATION OF RS.8.75 CROR ES MADE BY THE ASSESSING OFFICER BY INVOKING THE PROVISIONS OF RUL E 5(1A) OF THE INCOME TAX ACT RULES, HAVING BEEN DELETED BY LEARNED CIT (A), THE REVENUE IS IN APPEAL BEFORE US. 3. THE FACTS RELATING TO THE ISSUE ARE STATED IN BR IEF. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF GENERATION OF POWER. IT FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2003-04 ON 11-11-2003, I.E. BEFORE THE DUE DATE FOR FILING THE RETURN AS PRESCR IBED U/S 139 (1) OF THE ACT. IT IS RELEVANT TO MENTION HERE THAT AS PER RU LE 5(1A) OF THE INCOME TAX RULES, IN THE CASE OF ASSETS OF AN UNDERTAKING ENGA GED IN GENERATION OR GENERATION AND DISTRIBUTION OF POWER, DEPRECIATION SHALL BE ALLOWED UNDER ITA NO.146/VIZAG/2010 SRIVASTHA POWER PROJECTS LTD., PAGE 2 OF 3 STRAIGHT LINE METHOD AT THE RATES SPECIFIED IN APPE NDIX IA OF THE INCOME TAX RULES. HOWEVER, UNDER SECOND PROVISO TO RULE 5(1A) , IT IS PROVIDED THAT THE ASSESSEE MAY OPT FOR DEDUCTION OF DEPRECIATION UNDE R WDV METHOD AT THE RATES SPECIFIED APPENDIX I OF THE INCOME TAX RULES, IF SUCH OPTION IS EXERCISED BEFORE THE DUE DATE FOR FILING RETURN OF INCOME U/S 139(1) OF THE ACT. IN THE ASSESSEES CASE, THE DIFFERENCE BETWEE N DEPRECIATION CALCULATED AS PER APPENDIX IA UNDER STRAIGHT LINE METHOD AND T HE DEPRECIATION CALCULATED UNDER WDV METHOD AS PER APPENDIX I WAS R S.8.75 CRORES, I.E. THE DEPRECIATION CALCULATED UNDER WDV METHOD WAS MO RE BY RS.8.75 CRORES. THE ASSESSEE CLAIMED DEPRECIATION UNDER WD V METHOD AS PER THE RATES SPECIFIED IN APPENDIX I OF THE RULES. HOWEVE R, IT DID NOT FILE ANY SPECIFIC LETTER FOR EXERCISING THE OPTION, STATED A BOVE. HENCE, THE ASSESSING OFFICER ALLOWED DEDUCTION OF DEPRECIATION ONLY TO T HE EXTENT OF DEPRECIATION CALCULATED UNDER STRAIGHT LINE METHOD AND IT HAS RE SULTED IN AN ADDITION OF RS.8.75 CRORES. SINCE THE LEARNED CIT (A) DELETED THE SAID ADDITION, THE REVENUE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE PARTIES AND CAREFULLY PERUSED THE RECORD. THE UNDISPUTED FACT IS THAT THE ASSESSEE HAD FILED THE RETURN OF INCOME ON 11- 11-2003, I.E. BEFORE THE DUE DATE OF FILING THE RET URN OF INCOME AS PRESCRIBED U/S 139(1) OF THE ACT. THE LEARNED AUTHO RISED REPRESENTATIVE RELIED UPON FOLLOWING CASE LAW WHEREIN IT HAS BEEN HELD THAT THE RETURN OF INCOME FILED BEFORE THE DUE DATE SHALL AMOUNT TO EX ERCISE OF OPTION AS REQUIRED UNDER SECOND PROVISO TO RULE 5(1A), SINCE THERE IS NO SPECIFIC FORM OR METHOD PRESCRIBED FOR EXERCISING THE OPTION. A) CIT V JINDAL STEEL & POWER LTD., (2009) 29(1) IT CL 160 (P&H) B) K.K.S.K. LEATHER PROCESSORS (P) LTD. VS. ITO (20 10) 130 TTJ (CHENNAI) 184. IN THE INSTANT CASE ALSO, THE ASSESSEE HAS FILED IT S RETURN OF INCOME BEFORE THE DUE DATE AS PRESCRIBED UNDER SECTION 139(1) OF THE ACT. HENCE, ITA NO.146/VIZAG/2010 SRIVASTHA POWER PROJECTS LTD., PAGE 3 OF 3 CONSISTENT WITH VIEW TAKEN IN THE CASE LAW, CITED A BOVE, WE UPHOLD THE DECISION REACHED BY LEARNED CIT(A). 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. PRONOUNCED IN THE OPEN COURT ON 1.7.2010. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER VISAKHAPATNAM, DATE: 1 ST JULY, 2010 COPY TO 1 THE ACIT, CIRCLE-4(1), 3 RD FLOOR, DIRECT TAXES BUILDING, DOUBLE ROAD, MVP COLONY, VISAKHAPATNAM-17 2 M/S SRIVASTHA POWER PROJECTS LTD., PLOT NO.41, PA NDURANGAPURAM, VISAKHAPATNAM 3 4. THE CIT II VISAKHAPATNAM THE CIT(A), VISAKHAPATNAM. 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM