JCIT (OSD), Circle-1(1)(2), Ahmedabad V. Chiripal Industries Ltd., Ahmedabad

ITA 1478/AHD/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 6834 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 17-03-2020
• Assessment Year: 2006-2007
• Appeal Filed On: 05-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S SHUKLA
• Keywords: Depreciation; Additional evidence; Revised return; Set aside
• Section: 133(6); 251; 32

Judgement Text

, A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD (CONDUCTED THROUGH VIRTUAL COURT) BEFORE SHRI RAJPAL YADAV, VICE-PRESIDENT AND SHRI AMARJIT SINH, ACCOUNTANT MEMBER ITA NO.1478/AHD/2018 / ASSTT.YEAR : 2006-07 JCIT (OSD)CIRCLE - 1(1)(2) AHMEDABAD. VS. CHIRIPAL INDUSTRIES LD. SURVEY NO.199/200/1 & 200/1 & 2 SAIJPUR GOPALPUR PIRANA ROAD PIPLEJ, AHMEDABAD. PAN : AAACC 8513 B ( APPLICANT ) ( RESPONENT ) REVENUE BY : SHRI S.S. SHUKLA, SR.DR ASSESSEE BY : SHRI GAURAV NAHTA, AR / DATE OF HEARING : 14/12/2020 / DATE OF PRONOUNCEMENT: 28/01/2021 !'/ O R D E R PER RAJPAL YADAV, VICE-PRESIDENT: REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST OR DER OF THE LD.CIT(A)-1, AHMEDABAD PASSED FOR THE ASSTT.YEAR 20 06-07. 2. REVENUE HAS TAKEN TWO GROUNDS OF APPEAL, BUT ITS GRIEVANCE REVOLVES AROUND A SINGLE ISSUE WHEREBY IT HAS PLEAD ED THAT THE LD.CIT(A) HAS ERRED IN DELETING DISALLOWANCE OF RS. 4,54,45,709/- WHICH WAS DISALLOWED BY THE AO OUT OF EXCESS CLAIM OF DEPRECIATION ON BOILERS. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE CO MPANY AT THE RELEVANT TIME ENGAGED IN MANUFACTURING AND TRADING IN YARN, FABRICS AND GARMENT. IT HAS FILED ITS RETURN OF INCOME ON 27.12.2006 DECLARING ITA NO.1478/AHD/2018 2 TOTAL INCOME AT RS.2,92,30,230/-. THE ASSESSEE HAS REVISED THIS RETURN ON 4.1.2008 WHEREBY IT HAS CLAIMED DEPRECIATION ON PLANT & MACHINERY AT 80% INSTEAD OF 15% ORIGINALLY CLAIMED. COGNIZANCE OF THIS REVISED RETURN WAS NOT TAKEN BY THE AO. HE HA S PASSED ASSESSMENT ORDER ON 30.12.2008 DETERMINING TAXABLE INCOME AT RS.3,14,59,505/-. THE ASSESSEE WENT BEFORE THE LD. FIRST APPELLATE AUTHORITY, WHO TOOK COGNIZANCE OF THE REVISED RETUR N AND HELD THAT THE AO OUGHT TO HAVE DECIDED THE ISSUE OF DEPRECIATION AFTER TAKING INTO CONSIDERATION REVISED RETURN FILED BY THE ASSESSEE. ULTIMATELY, MATTER CAME UP BEFORE THE TRIBUNAL, WHO REMITTED THE MATTE R BACK TO THE FILE OF AO WITH DIRECTION TO RE-ADJUDICATE THE ISSUE WIT H REGARD TO THE CLAIM OF DEPRECIATION AFTER TAKING INTO CONSIDERATI ON REVISED RETURN FILED BY THE ASSESSEE. IN PURSUANCE OF THE ITATS ORDER, THE LD.AO HAS RE-ADJUDICATED THE ISSUE AND DECIDED EXCESS CLAIM O F DEPRECIATION. THE DISCUSSION MADE BY THE AO READ AS UNDER: DEPRECIATION ON BOILER AS PER THE DIRECTIONS OF THE HON'BLE IT AT, AS STAT ED ABOVE, THE ASSESSEE VIDE LETTER DATED 04/06/2015 WAS REQUESTED TO FURNISH EVIDENCE AND EXPLANATION FOR CLAIMING DEPRECIATION AT 80% ON BOILERS MADE IN THE REVISED RETURN OF INCOME. IN RE SPONSE THERETO, THE ASSESSEE VIDE LETTER DATED FURNISHED EVIDENCE IN RE SPECT OF FILING OF THE REVISED RETURN OF INCOME ALONGWITH THE CLAIM OF DEPRECIATION AT 80% ON BOILERS. HOWEVER, THE ASSESSEE FAILED TO FUR NISH ANY EXPLANATION AND JUSTIFICATION FOR CLAIMING DEPRECIA TION AT 80% ON BOILERS. A PERUSAL OF THE CLAIM OF DEPRECIATION M ADE BY THE ASSESSEE IN THE REVISED RETURN OF INCOME DATED 04/01/2008, I T IS SEEN THAT THE ASSESSEE HAS CLAIMED DEPRECIATION AT 80% ON CVL BOI LER, STEM TURBINE AMOUNTING TO RS.6,71,83,690/-. AS PER SR. N O. 8(A)(D) OF NEW APPENDIX-1 OF INCOME-TAX RULES, 1962, THE DEPRECIAT ION AT 80% IS ALLOWABLE TO BOILER HAVING HIGH EFFICIENCY BOILERS [THERMAL EFFICIENCY HIGHER THAN 75 PER CENT IN CASE OF COAL FIRED AND 8 0 PER CENT IN CASE OF OIL/GAS FIRED BOILERS]. THE ASSESSEE FAILED TO F URNISH ANY EVIDENCE TO PROVE THAT THE BOILERS ON WHICH 80% DEPRECIATION CLAIMED IS OF HIGH EFFICIENCY BOILERS INSPITE OF AMPLE OPPORTUNIT IES AFFORDED DURING ITA NO.1478/AHD/2018 3 THE COURSE OF SET-ASIDE ASSESSMENT PROCEEDINGS. WHE N A CLAIM FOR HIGHER DEPRECIATION IS MADE, THE ASSESSEE HAS TO PR OVE THAT SUCH PLANT & MACHINERY, IN FACT, FALL WITHIN THE AMBIT O F RULE-5(L) READ WITH NEW APPENDIX-1 OF 1. T. RULES. DURING THE COUR SE OF APPELLATE PROCEEDINGS AS WELL AS IN THE COURSE OF SET-ASIDE P ROCEEDINGS THE ASSESSEE COULD ONLY PRODUCE EVIDENCE IN RESPECT OF FILING REVISED RETURN OF INCOME WHERE IT MADE THE CLAIM OF DEPRECI ATION AT 80%. IT FAILED TO PRODUCE ANY EVIDENCE TO PROVE THAT BOILER ON WHICH 80% DEPRECIATION CLAIMED IN THE REVISED RETURN IS, IN F ACT, AN HIGH EFFICIENCY BOILER, THE TYPE OF BOILER WHETHER IT IS COAL FIRED OR OTHERS ARE NOT MENTIONED. AS SUCH, THE CLAIM OF THE ASSESS EE FOR HIGHER DEPRECIATION AT 80% ON BOILERS IS NOT ALLOWABLE AND ACCORDINGLY, THE CLAIM OF THE ASSESSEE IS REJECTED. ACCORDINGLY, AN AMOUNT OF RS. 4,54,45,709/- IS DISALLOWED AFTER CONSIDERING: REGU LAR DEPRECIATION AT 15% & 7.5% ON BOILER, THE WORKING OF WHICH IS GI VEN AS UNDER; DEP. ON CVL BOILER BEFORE 30/09/2005 DEP. ON CVL BOILER AFTER 30/09/2005 TOTAL DEP. @ 80% DEP. @ 40% TOTAL ALLOWABLE DEP. @ 15% & 7.5% DISALLOWAN CE [53438305 LESS 7992596] 66412071 771619 67183690 53129657 308648 53438305 7992596 45445709 15% 7.5% TOTAL 7969448 23148 7992596 4. DISSATISFIED WITH THE FINDING OF THE AO, THE ASS ESSEE WENT IN APPEAL BEFORE THE LD.CIT(A). IT APPEARS THAT INSTE AD OF FILING A FORMAL APPLICATION FOR PERMISSION TO LEAD ADDITIONAL EVIDE NCE, AS PROVIDED IN RULE 46A OF THE INCOME TAX RULES, 1962, THE ASSESSE E HAS FILED WRITTEN SUBMISSIONS WHICH WERE FORWARDED TO THE AO, AND AFTER CONSIDERING THE REMAND REPORT SUBMITTED BY THE AO, THE LD.CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE. WE DEEM IT APPR OPRIATE O TAKE NOTE OF THE RELEVANT FINDING RECORDED BY THE LD.CIT(A): 3.5. NOW COMING TO THE MERITS OF THE CASE I HAVE G ONE THROUGH THE SUBMISSION AND THE PAPER BOOK FILED BY>THE APPELLAN T, THE ONLY DISPUTE IN THE MATTER IS REGARDING THE RATE OF CLAI M OF DEPRECIATION. APPELLANT HAS CLAMED DEPRECIATION @ 80% ON BOILER W HEREAS THE AO ITA NO.1478/AHD/2018 4 HAS ALLOWED THE DEPRECIATION @ 15%. AO IS NOT DISPU TING THE GENUINENESS OF THE TRANSACTION AS HE HAS NOT DISALL OWED THE ENTIRE DEPRECIATION. THE ONLY ISSUE IS ABOUT THE RATE OF D EPRECIATION. I HAVE GONE THROUGH THE COPIES OF BILLS SUBMITTED BY THE A PPELLANT, IT CAN BE SEEN FROM THE BILLS THAT THE BOILER PURCHASED BY TH E APPELLANT IS BFBC BOILER (BUBBLING FLUIDIZED BED COMBUSTION) WHI CH ACCORDING TO THE APPELLANT IS SPECIFICALLY MENTIONED IN THE A CT THAT DEPRECIATION WILL BE ALLOWED @ 80%. THE RELEVANT PART OF THE ACT IS AS UNDER: ENERGY SAVING DEVICES, BEING A. SPECIALIZED BOILERS AND FURNACES: (A) IGNIFLUID/FLUIDIZED BED BOILERS - (B) FLAMELESS FURNACES AND CONTINUOUS PUSHER TYPE F URNACES (C) FLUIDIZED BED TYPE HEAT TREATMENT FURNACES (D) HIGH EFFICIENCY BOILERS (THERMAL EFFICIENCY HIG HER THAN 75 PER CENT IN CASE OF COAL FIRED AND PER CENT IN CASE OF OIL/GAS FIRED BOILERS) THE ACT IS SPECIFICALLY ALLOWING DEPRECIATION @ 80% TO FLUIDIZED BED BOILERS WHICH HAS BEEN PURCHASED BY THE APPELLANT. THE DETAILS OF THE BOILER PURCHASED ARE CLEARLY MENTIONED IN THE BILL. FURTHER, IT CAN BE SEEN FROM THE DETAILS SUBMITTED THAT THE CLAIM OF D EPRECIATION HAS BEEN ALLOWED BY THE AO IN NEXT YEARS AND NO DISALLO WANCE HAS BEEN MADE IN THE COMING YEARS. IT IS ALSO SUBMITTED THAT THE BOILER IS BEING USED FOR THE POWER PLANT IN WHICH DEPRECIATION HAS BEEN ALLOWED (5) 80% BY THE DEPARTMENT IN SUBSEQUENT YEARS. FURTHER, THE AO HAS MADE THE ADDITION BY READING THE WRONG CLAUSE OF TH E DEPRECIATION RULES. HE HAS MADE THE ADDITION AS UNDER:- 'AS PER SR. NO. 8(A)(D) OF NEW APPENOIX-1 OF INCOME -TAX RULES, 1962, THE DEPRECIATION AT 80% IS ALLOWABLE T O BOILER HAVING HIGH EFFICIENCY BOILERS [THERMAL EFFICIENCY HIGHER THAN 75 PER CENT IN CASE OF COAL FIRED AND 80 PER CENT I N CASE OF OIL/GAS FIRED BOILERS]. THE ASSESSEE FAILED TO FURN ISH ANY EVIDENCE TO PROVE THAT THE BOILERS ON WHICH 80% DEP RECIATION CLAIMED IS OF HIGH EFFICIENCY BOILERS INSPITE OF AM PLE OPPORTUNITIES AFFORDED DURING THE COURSES OF SET-AS IDE ASSESSMENT PROCEEDINGS.' WHEREAS, AS PER THE APPELLANT THEY ARE IN THE CLAUS E A, FLUIDIZED BED BOILERS AND THE BILL A/SO MENTIONS THAT THE BOILER PURCHASED IS BFBC BOILER AND IS ELIGIBLE FOR 80% DEPRECIATION. ITA NO.1478/AHD/2018 5 3.6. FURTHER, THE AQ HAS STATED IN THE REMAND REPOR T THAT THE APPELLANT HAS FAILED TO JUSTIFY ITS CLAIM IN 11 YEA RS, IN RESPONSE APPELLANT SUBMITTED ALL THE NECESSARY EVIDENCES INC LUDING THE COPIES OF BILLS AS WELL AS ENGINEERS CERTIFICATE IN SUPPOR T OF ITS CLAIM, THEREFORE THE AO IS NOT CORRECT IN STATING THAT APP ELLANT HAS FAILED TO JUSTIFY ITS CLAIM AS ALL THE NECESSARY DETAILS HAVE BEEN DULY SUBMITTED TO THE AO. FURTHER, THE AO STATED THAT ASSESSEE HAS MERELY FURNISHED COPIES OF PURCHASE BILLS, IN THIS RESPONSE APPELLAN T HAS SUBMITTED THAT TO PROVE THE PURCHASES THE BILLS ARE THE MOST IMPORTANT PIECE OF EVIDENCE WHICH HAVE BEEN DULY SUBMITTED AND THE AO HAS NOT ASKED FOR ANY FURTHER DOCUMENTS. I FIND THAT THE APPELLAN T IS CORRECT IN STATING THAT BILLS ARE AN IMPORTANT PIECE OF EVIDEN CE AND FURTHER TO SUPPORT THEIR CONTENTION THEY HAVE ALSO SUBMITTED E NGINEERS CERTIFICATE. FURTHER, THE PAYMENTS HAVE ALSO BEEN MADE THROUGH B ANKING CHANNEL AND THERE IS NO DOUBT ABOUT THE GENUINENESS OF THE PARTIES HORN WHOM PURCHASES HAVE BEEN DONE. MOST IMPORTANTLY, TH E GENUINENESS OF THE PURCHASE WAS NEVER DOUBTED IN THE ASSESSMENT ORDERS PASSED BY THE A.O. IT WAS A MATTER RELATED TO THE AMOUNT O F THE DEPRECIATION TO BE GIVEN WHICH WAS TO BE VERIFIED AND THE A.O. I N THE REMAND REPORT HAS NOT CONCENTRATED ON THIS ASPECT AND STAR TED LOOKING FOR THE GENUINENESS OF THE PURCHASE WHICH WAS NOT THE I SSUE TO BE REMANDED AND REPORTED. 3.7. AO HAS FURTHER STATED IN THE REMAND REPORT THA T HE HAS ISSUED NOTICE U/S 133(6) TO BOTH THE PARTIES FROM WHOM PUR CHASES WERE DONE, HOWEVER NO RESPONSE HAS BEEN RECEIVED FROM TH EM. THE APPELLANT SUBMITTED THAT NOTICES HAVE BEEN DULY SER VED AND AS THE MATTER IS MORE THAN 11 YEARS OLD THEREFORE IT MIGHT BE POSSIBLE THAT THESE PARTIES HAVE DESTROYED THE RECORDS AS ACCORDI NG TO /AW ONLY 6 YEARS DETAILS ARE REQUIRED TO BE KEPT. APPELLANT AL SO STALED THE AO SHOULD HAVE INFORMED THE APPELLANT ABOUT NON RECEIP T OF REPLY FROM THESE PARTIES. IN ITS SUPPORT APPELLANT ALSO FILED THE BALANCE SHEET AND MEMORANDUM OF THESE PARTIES FROM THE MCA WEBSIT E TO SUPPORT ITS CLAIM. I THEREFORE FIND THAT THE APPELLANT HAS DUTY SUBMITTED VALID REASON FOR NON RECEIPT OF REPLY AS THE MATTER WAS 1 1 YEARS OLD. FURTHER, THERE IS NO ISSUE REGARDING THE GENUINENES S OF THE PARTIES, THEREFORE WHETHER REPLY IS RECEIVED OR NOT WILL NOT HOLD MUCH IMPORTANCE IN THIS CASE AS THE AO HAS FOUND THE BIL LS TO BE GENUINE AND NO DISALLOWANCE OF COMPLETE DEPRECIATION HAS BE EN MADE. THE ISSUE IS ONLY WITH REGARDS TO THE RATE OF DEPRECIAT ION. FURTHER, THE MEMORANDUM OF THESE PARTIES ALSO STATE THAT THESE C OMPANIES ARE ITA NO.1478/AHD/2018 6 EXISTING AND ARE INVOLVED IN THE MANUFACTURING OF B OILERS AND RELATED PRODUCTS, THEREFORE THE GENUINENESS OF THE TRANSACT ION IS IN NO DOUBT AO HAS FURTHER STATED THAT CERTIFICATE ISSUED BY A CHARTER ENGINEER IS DATED 24.01.2017 AND IS CERTIFYING THE EVENT WHICH HAS TAKEN PLACE 11 YEARS AGO. APPELLANT HAS SUBMITTED THAT THE CERT IFICATE WAS ONLY ADDITIONAL EVIDENCE AND DATE OF ISSUE OF CERTIFICAT E HAS NO RELEVANCE. I HAVE GONE THROUGH THE CERTIFICATE AND FIND THAT T HE CERTIFICATE HAS NO RELEVANCE AS IT HAS BEEN ISSUED SO LATE. 3.8. AFTER GOING THROUGH THE ABOVE SUBMISSIONS I AM INCLINED TO ACCEPT THE CONTENTION OF THE APPELLANT THAT THE ONL Y DISPUTE IS REGARDING THE ALLOWABILITY OF RATE OF DEPRECIATION WHETHER @ 80% OR@15% AS THE GENUINENESS OF BILLS HAS NOT BEEN DOU BTED BY AO AND HE HAS ALLOWED DEPRECIATION @15% IN THE ORIGINAL AS SESSMENT. THE BILLS OF ADDITION SUBMITTED CLEARLY MENTIONS THAT I T IS BFBC BOILER ON WHICH 80% DEPRECIATION IS ALLOWABLE AS PER THE ACT. THE SAME BOILER IS BEING USED IN THE POWER PLANT ON WHICH DEDUCTION IS ALSO BEING CLAIMED U/S 80/6 AND DEPRECIATION HAS ALSO BEEN CLA IMED IN NEXT YEAR WHICH HAS NOT BEEN DISALLOWED. FURTHER, NO DISALLOW ANCE ON DEPRECIATION ON BOILER ALSO HAS BEEN DONE IN NEXT Y EARS BY THE AOS. ALSO THE AO HAS MADE THE ADDITION UNDER WRONG CLAUS E AS IT WAS BFBC BOILER WHEREAS THE AO HAS MADE THE ADDITION ST ATING THAT IT IS NOT A HIGH EFFICIENCY BOILER. IN VIEW OF THE ABOVE FACTS AND THE DISCUSSION, IT IS HELD THAT THE APPELLANT IS ENTITL ED TO THE DEPRECIATION @ 80% ON BFBC BOILER INSTALLED DURING THE YEAR UNDE R APPEAL. THE AO IS DIRECTED TO DELETE THE ADDITION ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION RS.4,54,45,709/-. THE GROUND OF THE AP PEAL IS ALLOWED. 5. THE LD.DR ON THE OTHER HAND SUBMITTED THAT IN TH E SECOND ROUND OF ASSESSMENT PROCEEDINGS, THE ASSESSEE NEVER PRODU CED MATERIAL INDICATING THE FACT THAT PLANT & MACHINERY ON WHICH DEPRECIATION HAS BEEN CLAIMED AT THE RATE OF 80% DOES QUALIFY FOR SU CH CLAIM. THE AO HAS REPEATEDLY ASKED THE ASSESSEE TO PRODUCE EVIDEN CE IN RESPECT OF THE FILING OF THE REVISED RETURN OF INCOME, WHERE IT HA S CLAIMED DEPRECIATION AT THE RATE OF 80%. ACCORDING TO THE AO, THIS RATE OF DEPRECIATION IS APPLICABLE ON HIGH EFFICIENCY BOILE RS AND THE ASSESSEE FAILED TO PROVE THAT ITS BOILER WAS OF THAT CATEGOR Y. WHILE IMPUGNING THE ORDER OF THE LD.CIT(A), THE LD.DR FURTHER CONTE NDED THAT THE ITA NO.1478/AHD/2018 7 LD.CIT(A) HAS IGNORED THIS NON-VERIFICATION OF THE DETAILS UNDER THE GARB OF ARGUMENTS THAT 11 YEARS HAVE PASSED, BUT TH ESE 11 YEARS HAVE NOT BEEN PASSED DUE TO THE MISTAKE OF THE AO, RATHE R IT IS THE ASSESSEE WHO FAILED TO COLLECT EVIDENCE AND SUBMITTED BEFORE THE AO. CERTIFICATE OF CHARTERED ENGINEER CONSIDERED BY THE LD.CIT(A) IS DATED 24.1.2017 WHEREAS THE ASSESSMENT ORDER WAS PASSED O N 31.7.2015. THIS CERTIFICATE WAS NOT PRODUCED BEFORE THE AO, AN D IT COULD ONLY BE PLACED ON THE RECORD WITH THE HELP OF RULE 46A OF T HE INCOME TAX RULES AND NOT IN ANY OTHER MANNER. THE LD.CIT(A) H AS ERRED IN TAKING COGNIZANCE OF THE CERTIFICATE. 6. ON THE OTHER HAND, THE LD.COUSNEL FOR THE ASSESS EE RELIED UPON THE ORDER OF THE LD.CIT(A). HE SUBMITTED THAT ORIG INALLY REVISED RETURN WAS FILED WELL IN TIME, BUT ITS COGNIZANCE WAS NOT TAKEN BY THE AO. IT WAS A PATENT ERROR AT THE END OF AO AND ON THE DIRE CTION FROM THE HIGHER APPELLATE AUTHORITY, THE LD.AO HAS CONSIDERE D THE CLAIM OF THE ASSESSEE, BUT REJECTED IT. HE FURTHER CONTENDED TH AT INCOME TAX RULES AN APPENDIX IS BEING ANNEXED WHEREIN THE RATE OF DE PRECIATION ADMISSIBLE UNDER SECTION 32 OF THE ACT IS BEING PRO VIDED. THE DETAILS OF SPECIALIZED BOILERS AND FURNACE HAVE BEEN CATEGO RIZED UNDER SERIAL NO.(A) TO (D) AS NOTICED BY THE LD.CIT(A) ON PAGE N O.3 OF THE IMPUGNED ORDER. THE LD.AO HAS CONSIDERED THE CLAIM OF THE A SSESSEE UNDER SERIAL NO.(D) WHEREAS ITS CLAIM FALL AT SERIAL NO.(A). TH E ASSESSEE HAS SUBMITTED A CERTIFICATE OF CHARTERED ENGINEER EXHIB ITING THE FACT THAT IGNIFLUID/FLUIDIZED BED BOILERS WAS INSTALLED BY TH E ASSESSEE. HE FURTHER MADE REFERENCE TO THE COPIES OF BILLS PLACE D ON PAGE NO.39 TO 53 OF THE PAPER BOOK. ACCORDINGLY, MAJOR BILLS HAV E BEEN PLACED ON ITA NO.1478/AHD/2018 8 RECORD. IN THESE INVOICES, IT HAS BEEN OBSERVED TH AT IGNIFLUID BOILER WAS SOLD TO THE ASSESSEE. 7. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. A SHORT CONTROVERSY BEFORE US IS , WHETHER THE ASSESSEE HAS INSTALLED ENERGY SAVING DEVICE BEING A SPECIALIZED BOILER AND FURNACE ON WHICH IT CAN CLAIM DEPRECIATION AT T HE RATE OF 80%. AS FAR AS RATE OF DEPRECIATION IS CONCERNED, THERE IS NO DISPUTE. DISPUTE RELATES TO THE FACT WHETHER THE ASSESSEE HAS INSTAL LED AN ENERGY SAVING DEVICE IN THE SHAPE OF A BOILER. RULE HAS PRESCRIB ED THE FOLLOWING SPECIALIZED BOILERS: A. SPECIALIZED BOILERS AND FURNACES: (A) IGNIFLUID/FLUIDIZED BED BOILERS - (B) FLAMELESS FURNACES AND CONTINUOUS PUSHER TYPE F URNACES (C) FLUIDIZED BED TYPE HEAT TREATMENT FURNACES (D) HIGH EFFICIENCY BOILERS (THERMAL EFFICIENCY HIG HER THAN 75 PER CENT IN CASE OF COAL FIRED AND PER CENT IN CASE OF OIL/GAS FIRED BOILERS) 8. ACCORDING TO THE ASSESSEE, IT HAS INSTALLED A BO ILER AS SHOWN AT SERIAL (A), AND THEREFORE, IT IS ENTITLED TO HIGHER RATE OF DEPRECIATION. WE HAVE TAKEN COGNIZANCE OF THE FINDING RECORDED BY THE AO EXTRACTED (SUPRA). A PERUSAL OF THE ABOVE FINDING WOULD INDICATE THAT THE AO HAS GRANTED AMPLE OPPORTUNITY AND SPECIFICAL LY DIRECTED THE ASSESSEE TO PRODUCE EVIDENCE EXHIBITING THE FACT TH AT THE BOILER INSTALLED BY IT, IS OF HIGHER EFFICIENCY ON WHICH D EPRECIATION AT THE RATE OF 80% CAN BE CLAIMED. ACCORDING TO THE FINDING OF THE AO, NO SUCH EVIDENCE WAS PRODUCED. RULE 46A OF THE INCOME TAX RULES PROVIDES A MECHANISM FOR AN ASSESSEE FOR PRODUCING ADDITIONA L EVIDENCE BEFORE THE LD.CIT(A). THIS RULE READ AS UNDER: ITA NO.1478/AHD/2018 9 46A. (1) THE APPELLANT SHALL NOT BE ENTITLED TO PR ODUCE BEFORE THE [DEPUTY COMMISSIONER (APPEALS)] [OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS)], ANY EVIDENCE, WHETHER ORAL OR DOCUMENTARY, OTHER THAN THE EVIDENCE PRODUC ED BY HIM DURING THE COURSE OF PROCEEDINGS BEFORE THE [A SSESSING OFFICER], EXCEPT IN THE FOLLOWING CIRCUMSTANCES, NA MELY : (A) WHERE THE [ASSESSING OFFICER] HAS REFUSED TO ADMIT EVIDENCE WHICH OUGHT TO HAVE BEEN ADMITTED ; OR (B) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAU SE FROM PRODUCING THE EVIDENCE WHICH HE WAS CALLED UPO N TO PRODUCE BY THE [ASSESSING OFFICER] ; OR (C) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAU SE FROM PRODUCING BEFORE THE [ASSESSING OFFICER] ANY EVIDENCE WHICH IS RELEVANT TO ANY GROUND OF APPEAL ; OR (D) WHERE THE [ASSESSING OFFICER] HAS MADE THE ORDER APPEALED AGAINST WITHOUT GIVING SUFFICIENT OPPORTUN ITY TO THE APPELLANT TO ADDUCE EVIDENCE RELEVANT TO ANY GR OUND OF APPEAL. (2) NO EVIDENCE SHALL BE ADMITTED UNDER SUB-RULE (1 ) UNLESS THE [DEPUTY COMMISSIONER (APPEALS)] [OR, AS THE C ASE MAY BE, THE COMMISSIONER (APPEALS)] RECORDS IN WRITING THE REASONS FOR ITS ADMISSION. (3) THE [DEPUTY COMMISSIONER (APPEALS)] [OR, AS T HE CASE MAY BE, THE COMMISSIONER (APPEALS)] SHALL NOT TAKE INTO ACCOUNT ANY EVIDENCE PRODUCED UNDER SUB-RULE (1) UN LESS THE [ASSESSING OFFICER] HAS BEEN ALLOWED A REASONABLE OPPORTUNITY (A) TO EXAMINE THE EVIDENCE OR DOCUMENT OR TO CROSS-EXA MINE THE WITNESS PRODUCED BY THE APPELLANT, OR (B) TO PRODUCE ANY EVIDENCE OR DOCUMENT OR ANY WITNESS IN REBUTTAL OF THE ADDITIONAL EVIDENCE PRODUCED BY THE APPELLANT. (4) NOTHING CONTAINED IN THIS RULE SHALL AFFECT THE POWER OF THE [DEPUTY COMMISSIONER (APPEALS)] [OR, AS THE CASE M AY BE, THE COMMISSIONER (APPEALS)] TO DIRECT THE PRODUCTIO N OF ANY DOCUMENT, OR THE EXAMINATION OF ANY WITNESS, TO ENA BLE HIM TO DISPOSE OF THE APPEAL, OR FOR ANY OTHER SUBSTANTIAL CAUSE INCLUDING THE ENHANCEMENT OF THE ASSESSMENT OR PENA LTY ITA NO.1478/AHD/2018 10 (WHETHER ON HIS OWN MOTION OR ON THE REQUEST OF THE [ASSESSING OFFICER]) UNDER CLAUSE (A) OF SUB-SE CTION (1) OF SECTION 251 OR THE IMPOSITION OF PENALTY UNDER SECT ION 271.] 9. A PERUSAL OF THE ABOVE RULE WOULD INDICATE THAT IT HAS PROHIBITED ANY APPELLANT TO PRODUCE ANY EVIDENCE UNLESS CONDIT IONS ENUMERATED IN CLAUSE (A) TO (D) EXIST. THE LD.CIT(A) ON ITS S ATISFACTION ABOUT AVAILABILITY OF ANY OF THE CONDITIONS ENUMERATED IN CLAUSE (A) TO (D) IN SUBSECTION (1) OF RULE 46A WOULD NOT ADMIT EVIDENCE WITHOUT GIVING ANY OPPORTUNITY OF HEARING TO THE AO. AFTER HEARIN G THE AO, HE WOULD RECORD IN WRITING THE REASONS FOR ADMISSION OF EVID ENCE. 10. AFTER ADMISSION OF THE EVIDENCE HE WILL AGAIN G IVE AN OPPORTUNITY TO THE AO FOR REBUTTING THAT EVIDENCE O N MERIT. NO DOUBT, UNDER CLAUSE (4), THE LD.COMMISSIONER CAN HIMSELF D IRECT FOR PRODUCTION OF ANY EVIDENCE BY ANY OF THE PARTIES, W HICH CAN HELP HIM TO DECIDE THE APPEAL JUDICIOUSLY. THE PROCEDURE CO NTEMPLATED IN THE ABOVE RULE HAS NOT BEEN FOLLOWED BY THE LD.CIT(A). HE SIMPLY TOOK WRITTEN SUBMISSION FILED BY THE ASSESSEE, AND SENT THEM FOR COMMENTS OF THE AO. THE LD.CIT(A) HAS MADE REFERENCE TO THE CERTIFICATE OF CHARTERED ENGINEER IN SUPPORT OF HIS REASON THAT BO ILER WAS INSTALLED. COPY OF THAT CERTIFICATE IS AVAILABLE ON PAGE NO.54 OF THE PAPER BOOK, WHICH READS AS UNDER: CERTIFICATE TO WHOM SO EVER IT MAY CONCERN SUB: EFFICIENCY CERTIFICATE OF BOILER THIS IS TO CERTIFY THAT M/S. CHIRIPAL INDUSTRIES LI MITED, REGISTERED OFFICE AT 199, 200/1 & 2, SAIJPUR-GOPALP UR PIRANA ROAD, PIPLEJ, AHMEDABAD-382405, HAVE INSTALLED THE BFBC BOILER (BUBBLING FLUIDIZED BED COMBUSTION) IN THE Y EAR 2005-06 AND IT IS SPECIALIZED BOILER WHICH IS OF THE CATEGO RY OF FLUIDIZED ITA NO.1478/AHD/2018 11 BED BOILER AND BEING COVERED UNDER THE INCOME TAX A CT UNDER ENERGY SAVING DEVICES ON WHICH 80% DEPRECIATION RAT E SHOULD BE APPLIED. PLACE : AHMEDABAD SD/- DATE : 24/01/2017 S.K. PATEL. (CHARTERED ENGINEER) 11. A PERUSAL OF THE CERTIFICATE WOULD INDICATE THA T IT IS DATED 24.1.2017 ISSUED AFTER THE ASSESSMENT ORDER. THIS CHARTERED ENGINEER HAS NO WHERE SPECIFIED THAT SUCH BFBC BOILER WAS IN STALLED UNDER HIS SUPERVISION OR HE HAS INSPECTED THE BOILER. HE SIM PLY STATED THAT THIS CONCERN HAS INSTALLED A BOILER BUT NO MENTION ON WH AT BASIS HE OBSERVED SO; HAD HE EVER VISITED THE PREMISES OF TH E ASSESSEE ? THEREFORE, IT WAS NECESSARY FOR THE AO TO EXAMINE S UCH TYPE OF PERSON, BUT HE WAS NOT PRODUCED BEFORE THE AO EVEN IN THE REMAND PROCEEDINGS. OTHER EVIDENCES SUBMITTED BY THE ASSE SSEE ARE COPIES OF INVOICES VIDE WHICH PARTS OF THE BOILERS HAVE BEEN PURCHASED. THE LD.AO HAS ISSUED NOTICE UNDER SECTION 133(6) OF THE INCOME TAX ACT AND DIRECTED THIS PERSON TO FURNISH INFORMATION, BU T THESE WERE NOT RESPONDED. WE HAVE PERUSED THESE BILLS, AND PARTIC ULARLY EXAMINED COPY OF INVOICE PLACED AT PAGE NO.41O THE PAPER BOO K. THE DATE ON THE BILL IS NOT DISCERNIBLE COMPLETELY. UNDER THE HEAD PARTICULARS IT READS LIKE THIS PARTICULARS WEIGHT (KG) AMOUNT SUPPLY OF 23 TFH BFEC BOILER MUD DRUM 33.84.92 530000.00 BANK TUBES 4884.98 640000.00 SUPPORTING STRUCTURE 729.64 65000.00 1235000.00 ITA NO.1478/AHD/2018 12 SIMILARLY IN OTHER BILLS, THERE ARE SUPPLIES OF PAR TS VIZ. AIR DUCTING, SUPPORTING STRUCTURE, BED COIL ETC. ALL THESE ITEM S HAVE BEEN PURCHASED ON DIFFERENT DATES, NAMELY, FIRST INVOICE ON PAGE NO.41 IS DATED 17.8.2004, BUT ANOTHER INVOICE ON PAGE NO.47 IS DATED 23.2.2005. IT IS NOT DISCERNIBLE ACTUALLY HOW THESE COMPONENTS HAVE BEEN USED, AND WHEN THEY WERE INSTALLED. THESE ARE DETAILS, W HICH HAVE BEEN FURNISHED IN A VERY CASUAL MANNER, AND HAVE BEEN AC CEPTED BY THE LD.CIT(A) WITHOUT ANY PROPER VERIFICATION. THEREFO RE, WE ARE OF THE VIEW THAT IN SPITE OF SECOND ROUND OF LITIGATION, T HE ASSESSEE COULD NOT PRODUCE COMPLETE DETAILS IN SUPPORT OF ITS CLAIM. THE FINDING OF THE LD.CIT(A) IS NOT BASED ON CORRECT APPRECIATION OF T HE MATERIAL FACTS, RATHER THE LD.CIT(A) HAS MISCONSTRUED PARTIAL AND I NCOMPLETE DOCUMENTS AVAILABLE ON THE RECORD. WE DO NOT HAVE ANY HESITATION IN SETTING ASIDE THIS FINDING. ON ANALYSIS OF THE REC ORD, WE ARE OF THE FIRM VIEW THAT ASSESSEE FAILED TO PROVE THE INSTALLATION OF HIGH EFFICIENCY BOILER ON WHICH DEPRECIATION AT THE RATE OF 80% COU LD BE CLAIMED. THEREFORE, WE ALLOW THE APPEAL OF THE REVENUE, AND SET ASIDE THE FINDING OF THE LD.CIT(A) AND CONFIRM THE DISALLOWAN CE OF RS.4,54,45,709/-. IN OTHER WORDS, ORDER OF THE AO IS RESTORED ON THIS ISSUE. 12. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 28 TH JANUARY, 2021 AT AHMEDABAD. S D / - (AMARJIT SINGH) ACCOUNTANT MEMBER S D / - (RAJPAL YADAV) VICE-PRESIDENT AHMEDABAD; DATED 28/01/2021