MR. SHRIRANG NATHURAM DOKHALE, DOMBIVLI V. THE COMM OF INCOME TAX (APPEAL), NFAC, DELHI

ITA 149/MUM/2023

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Mr. Shrirang Nathuram Dokhale, a medical professional, appealed against the order of the Commissioner of Income Tax (Appeals) - NFAC, which confirmed the disallowance of excess depreciation claimed on Color Doppler machines used in his practice. The machines were integrated with computer hardware and software, leading the assessee to claim a higher depreciation rate of 60%. However, the Assessing Officer (A.O.) and the CIT(A) maintained that these machines fall under the category of 'plant and machinery' with a prescribed depreciation rate of 40%. The Tribunal, after reviewing the specifics of the case and the applicable tax rules, upheld the lower authorities' decisions, dismissing the appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 130135 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 15-03-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 15-01-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: SACHIN BHINARDE
• Keywords: Depreciation
• Section: 32; 143(3); 250; 143(2)

Judgement Text

P a g e | 1 ITA No.149/Mum/2023 Mr. Shrirang Nathuram Dokhale Vs. The CIT(A) NFAC IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI ABY T VARKEY, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA No. 149/Mum/2023 (A.Y.2014-15) Mr. Shrirang Nathuram Dokhale, C-148 Kasturi Plaza, Manpada Road Dombivli (East) Dombivli – 421201 Vs. The Commissioner of Income Tax (Appeals)- NFAC स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AASPD5020F Appellant .. Respondent Appellant by : Sachin Bhinarde Respondent by : Bharat Andhale Date of Hearing 16.03.2023 Date of Pronouncement 28.03.2023 आदेश / O R D E R Per Amarjit Singh (AM): The present appeal filed by the assesse is directed against the order passed by the NFAC, Delhi dated 22.11.2022 for A.Y. 2014-15. The assesse has raised the following grounds before us: “1. The Order under section 250 of the Income Tax Act, 1961 bearing order no ITBA/NFAC/S/250/2022-23/1047564381(1) dated 22.11.2022 passed by the Commissioner of Income Tax and the learned Asst. Commissioner of Income Tax, Circle-3, Kalyan has erred in passing an order under section 143(3) of the Income Tax Act, 1961 dated 17.10.2016 are bad in law. 2. On the facts and in the circumstances of the case and in law the learned the Commissioner of Income Tax (Appeal), NFAC, has erred in passing an order having Order No./DIN ITBA/NFAC/S/250/2022- 23/1047564381(1) under section 250 of the Income Tax Act, 1961 dated 22.11.2022 and the learned Asst. Commissioner of Income Tax, Circle-3, Kalyan has erred in passing an order under section 143(3) of the Income Tax Act, 1961 dated 17 10 2016 has where the Assessee has taken one view with which the Commissioner of Income Tax has not agreed. P a g e | 2 ITA No.149/Mum/2023 Mr. Shrirang Nathuram Dokhale Vs. The CIT(A) NFAC 3. On the facts and in the circumstances of the case and in law the learned Commissioner of Income Tax (Appeal), NFAC and the learned Asst. Commissioner of Income Tax has erred is holding that the deduction claimed under section 32 of the Act for the depreciation charged at 60% on Class of assets as Computers and software is incorrect. 4. On the facts and in the circumstances of the case and in law the learned Commissioner of Income (Appeal), NFAC and the learned Asst. Commissioner of Income Tax has erred in disallowing the part of the amount claimed as a deduction under section 32 for depreciation. 5. The assessee craves leave to add, alter, amend, modify, delete all or any of the grounds of appeal.” 2. The fact in brief is that return of income declaring total income of Rs.32,29,000/- was filed on 30.09.2014. The case was subject to scrutiny assessment and notice u/s 143(2) of the Act was issued on 04.09.2015. The assessee is an individual and engaged in the medical profession. During the course of assessment the A.O noticed that assesse has claimed depreciation@ 60% on the color Doppler Machines namely, USG M/c- AKOLA_ Alpha -6 Colour and USG M/c- SLS-US- BAL-Voluson- E 6, with WDV of 11,38,685.79/- and 20,01,284/- totalling to Rs.31,39,969.79/-. Therefore, assesee has claimed depreciation @ 60% on these machines at Rs.18,83,982/-. In this regard, the assessee was asked to show cause as to why depreciation should not be allowed @ 40%. In response the assessee submitted that this is ultra sound machine loaded with computer hardware and various software. It is also submitted that the said machine cannot give result without computer application. The assessee also stated that he has been treating this machine constantly as computer due to its feature application and utility and the said machine is integrated with computer and software along with inbuilt data storage. Therefore, submitted that depreciation @ 60% should be allowed on the said machine. However, the A.O has not agreed with the submission of the assesee. The A.O stated that Color Doppler has been specifically and categorically categrorized under the category of plant and machinery, P a g e | 3 ITA No.149/Mum/2023 Mr. Shrirang Nathuram Dokhale Vs. The CIT(A) NFAC Color Doppler as 5 th item under a sub-heading Life Saving Medical Equipment for which allowable depreciation was 40%. Therefore, A.O has restricted the depreciation to the extent of allowable rate of 40% as against depreciation claimed by the assessee @ 60%. Accordingly, excess claim of depreciation of Rs.6,27,994/- was disallowed and added to the total income of the assessee. 3. The assessee filed the appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee. 4. Heard both the sides and perused the material on record. Without reiterating the facts as elaborated above we have perused the order of ld. CIT(A) holding that since a rate of depreciation at 40% has been specifically provided in law for Color Doppler, therefore there is no scope for any other interpretation of treating the said asset as computer. In this regard, we have perused the Appendix I to the rule 5 of I.T. Rule 1962 wherein part A of the tangible assets under the head Machinery & Plant in respect of Life Saving Medical Equipments has been categorically listed that Color Doppler Medical Equipments to be provided depreciation @ 40% only. Therefore, in view of the specific provision laid in the I.T. Rule as referred above, we don’t find any infirmity in the decision of ld. CIT(A), therefore, all the ground of appeal of the assessee stand dismissed. 5. In the result, the appeal of the assesse stand dismissed. Order pronounced in the open court on 28.03.2023 Sd/- Sd/- (Aby T Varkey) (Amarjit Singh) Judicial Member Accountant Member Place: Mumbai Date 28.03.2023 Rohit: PS P a g e | 4 ITA No.149/Mum/2023 Mr. Shrirang Nathuram Dokhale Vs. The CIT(A) NFAC आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant 2. प्रत्यथी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. सत्यावपि प्रवि //True Copy// आदेशानुसार/ BY ORDER, उि/सहायक िंजीकार (Dy./Asstt. Registrar) आयकर अिीिीय अतिकरण/ ITAT, Bench, Mumbai.