Bhagyalaxmi Dairy Farms Pvt. Ltd., Pune V. Deputy Commissioner of Income-tax,

ITA 1506/PUN/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7251 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 21-09-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 19-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVDESH KUMAR
• Keywords: Unexplained expenditure; Depreciation; Income from undisclosed sources; Deemed to accrue or arise in india; Documents seized
• Section: 69C; 143(3); 133A; 153A; 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE , , , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI , AM . / I TA NO S . 1505 TO 1507/PUN/2015 / ASSESSMENT YEAR S : 2007 - 08 TO 2009 - 10 BHAGYALAXMI DAIRY FARMS PVT. LTD. A - 602, KUMAR PURAM, MUKUND NAGAR, PUNE - 411 037 / APPELLANT PAN : AACCB6817F / V/S. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 1(1), PUNE / RESPONDENT A PPELLANT BY : SHRI SUHAS P. BORA R ESPONDENT BY : SHRI A V DESH KUMAR / DATE OF HEARING : 21.09.2017 / DATE OF PRONOUNCEMENT : 31 .1 0.2017 / ORDER PER SUSHMA CHOWLA , JM ALL THE THREE APPEAL S FILED BY THE SAME ASSESSEE ARE AGAINST CONSOLIDATED ORDER OF CIT(A) - 1 3 , PUNE DATED 14.09.2015 RELATING TO ASSESSMENT YEAR S 2007 - 08 TO 2009 - 10 AGAINST RESPECTIVE OR DER S PASSED UNDER SECTION 143(3) R.W.S 153A OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2 ITA NOS.1505 TO 1507/PUN/2015 BHAGYALAXMI DAIRY FARMS PVT. LTD 2. ALL THE THREE APPEALS RELATING TO THE SAME ASSESSEE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 3. THE ASSESSEE IN ITA NO.1505/PUN/2015, RELATING TO ASSESSMENT YEAR 2007 - 08 HAS RAISED THE FOLLOWI NG GROUNDS OF APPEAL: - 1. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION MADE BY THE AO OF RS.10 , 00 , 000/ - U/S. 69C ON ACCOUNT OF UNEXPLAINED EXPENSES NOT RECORDED IN THE BOOKS IGNORING THE FACT THAT THE SAID ISSUE OF UNEXPLAINED EXPENDITURE WAS COVERED IN THE APPLICATION BEFORE SETTLEMENT COMMISSION. 2. THE LEARNED CIT(A) FAILED TO CONSIDER THAT AS THE ISSUE INVOLVED WAS COVERED BY SETTLEMENT COMMISSION, THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED EXPENDITURE AND SEIZED PAPERS WOULD AMOUNT TO DOUBLE ADDITION WHICH WAS NOT PERMISSIBLE AND JUSTIFIED IN LAW. 3. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.10 , 00 , 000/ - ON ACCOUNT OF UNEXPLAINED EXPENDITURE ON THE GROUND THAT THE SAID ORDER OF SETTLEMENT COMMISSION HAD NO CLEAR EVIDENCE OF SAME AMOUNT BEING CONSIDERED BY IT. 4. THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THE CONTENTION OF THE APPELLANT ON THE MERITS THAT NOTING ON SEIZED PAPER CLEARLY INDICATED THE NATURE OF PAYMENT AND IT WAS APPEARING ON THE DEBIT SIDE. 5. THE LEARNED CIT(A) WHILE CONFIRMING THE ADDITION MADE BY THE AO, ERRED IN NOT APPRECIATING THE FOLLOWING FACTORS : A ) T HE NATURE OF EXPENSES AND THE PURPOSE WAS CLEARLY STATED ON THE SEIZED PAPERS. B ) THE SAID ISSUE WAS TAKEN UP BY THE GROUP COMPANY IN THEIR APPLICATION FILED BY THEM BEFORE INCOME TAX SETTLEMENT COMMISSION. C ) HONBLE SETTLEMENT COMMISSION HAS CONSIDERED THE I SSUE AND ACCORDINGLY THE ADDITION AL OFFER WAS MADE AND ACCEPTED BY THE GROUP COMPANY. 4. THE ISSUE WHICH IS RAISED BY THE ASSESSEE IS AGAINST THE ADDITION OF RS.10 LAKHS MADE UNDER SECTION 69C OF THE ACT ON ACCOUNT OF UNEXPLAINED EXPENSES WHICH WERE NOT RECORDED IN THE BOOKS OF ACCOUNT. 3 ITA NOS.1505 TO 1507/PUN/2015 BHAGYALAXMI DAIRY FARMS PVT. LTD 5. BRIEFLY, IN THE FACTS OF THE CASE, SEARCH ACTION UNDER SECTION 132 OF THE ACT WAS CONDUCTED IN THE PARAG GROUP OF CASES ON 04.02.2011. THE ASSESSEE WAS ISSUED NOTICE UNDER SECTION 153A OF THE ACT AND IN RESPONSE THERETO, THE ASSESSEE FURNISHED THE RETURN OF INCOME DECLARING LOSS OF RS.58,28,628/ - AS AGAINST NIL RETURN OF INCOME ORIGINALLY FILED. PARAG GROUP WAS ENGAGED IN TRADING AND MANUFACTURING OF MILK PRODUCTS, WHEREIN M/S. PARAG MILK FOODS PVT. LTD. WAS FLAGSHIP CONCERN. THE ASSESSEE WAS SISTER CONC ERN OF M/S. PARAG MILK FOODS PVT. LTD. SOME OF THE GROUP CONCERNS OF PARAG GROUP AS WELL AS BUSINESS ASSOCIATES WERE ALSO COVERED UNDER SURVEY ACTION UNDER SECTION 133A OF THE ACT. DURING THE COURSE OF SURVEY, VARIOUS L OOSE PAPERS , COMPUTER PRINTOUTS, HA ND WRITTEN CHITS, COMPUTER DATA, ETC. SUPPORTING THE PRACTICES ADOPTED BY THE CONCERN OF UNDISCLOSED AND UNACCOUNTED INCOME WERE SEIZED FROM THE BUSINESS AS WELL AS RESIDENTIAL PREMISES. ALL THESE DOCUMENTS WERE CONFRONTED TO SHRI DEVENDRA PRAKASH SHAH, S MT. PRITI SHAH, SMT. NETRA PRITAM SHAH AND THE EMPLOYEES AND CONCERNED OFFICIALS DURING THE COURSE OF SEARCH AS WELL AS POST SEARCH ENQUIRIES . AT DIFFERENT PLACES, CASH WAS ALSO FOUND AND PART OF WHICH WAS SEIZED. PARAG GROUP DURING THE COURSE OF SEARCH, MADE TOTAL DISCLOSURE OF RS.20.87 CRORES, OUT OF WHICH RS.11.91 CRORES WAS DISCLOSED ON ACCOUNT OF INFLATED PURCHASES FROM THE ASSESSEE BOOKED BY M/S. PARAG MILK FOODS PVT. LTD. IN THE RESPECTIVE YEARS. HOWEVER, WHILE FILING THE RETURN OF INCOME IN RESPONSE TO NOTICE ISSUED UNDER SECTION 153A OF THE ACT, SUM OF RS.11.91 CRORES DISCLOSED ON ACCOUNT OF INFLATED PURCHASES, WAS NOT OFFERED AS UNDISCLOSED INCOME IN THE RESPECTIVE YEAR S. SUBSEQUENTLY, PARAG GROUP PREFERRED PETITION BEFORE THE SETTLEMENT COMMISSION FOR SETTLEMENT OF THE CASE. THE ASSESSING OFFICER NOTES THAT DURING COMPLETION OF ASSESSMENT PROCEEDINGS, THE SAME WAS PENDING TILL THE DATE OF PASSING THE ASSESSMENT ORDER. THE 4 ITA NOS.1505 TO 1507/PUN/2015 BHAGYALAXMI DAIRY FARMS PVT. LTD ASSESSING OFFICER ALSO NOTED THAT THE ASSESSEE THOUGH , WAS ONE OF THE CASES OF PARAG GROUP BUT DURING SEARCH ACTION, NO DISCLOSURE WAS MADE ON ACCOUNT OF INCRIMINATING DOCUMENTS SEIZED/IMPOUNDED. THE FIRST PART WHICH WAS MADE WAS ON ACCOUNT OF CASH CREDITS UNDER SECTION 68 OF THE ACT AT RS.1.5 CRORES WHICH IS NOT AN ISSUE RAISED BEFORE US. 6. THE SECOND ADDITION WHICH WAS M ADE IN THE HANDS OF ASSESSEE WAS ON ACCOUNT OF UNEXPLAINED EXPENDITURE UNDER SECTION 69C OF THE ACT AT RS.10 LAKHS. THE BUNDL E 2 WAS SEIZED AND PAGE 128 OF THE SAID BUNDLE CONTAINED EXPENDITURE INCURRED BY THE ASSESSEE AT RS.10 LAKHS TOWARDS ELECTION EXPENSES, NOT RECORDED IN REGULAR BOOKS OF ACCOUNT. ACCORDINGLY, THE ASSESSEE WAS ASKED TO GIVE EXPLANATION AS TO WHY THE SAME SH OULD NOT BE TREATED AS ITS DEEMED INCOME. THE ASSESSEE POINTED OUT THAT THIS ISSUE WAS TAKEN UP BY PARAG MILK FOODS PVT. LTD. IN THE SETTLEMENT PETITION BEFORE THE SETTLEMENT COMMISSION. HENCE, THE SAME WAS NOT TO BE ADDED IN ITS HANDS, BUT SINCE THE DEC ISION OF THE SETTLEMENT COMMISSION WAS STILL PENDING AND HENCE, THE SAME WAS ADDED AS INCOME OF THE ASSESSEE ON ACCOUNT OF UNEXPLAINED EXPENDITURE UNDER SECTION 69C OF THE ACT. 7. BEFORE THE CIT(A), THE ASSESSEE EXPLAINED THAT THE ISSUE WAS COVERED VIDE P ARA 10.4 OF THE ORDER OF THE SETTLEMENT COMMISSION . THE SUBMISSIONS OF THE ASSESSEE ARE REPRODUCED UNDER PARA 3.3.2 AT PAGES 9 AND 10 OF THE APPELLATE ORDER. THE CIT(A) WAS OF THE VIEW THAT THOUGH THE ASSESSEE HAD STATED THAT THE AMOUNT WAS COVERED IN TH E SETTLEMENT COMMISSION BUT THE ASSESSEE HAS NOT FURNISHED ANY MATERIAL IN THIS REGARD THAT SUM OF RS.10 LAKHS WAS PART OF TOTAL UNEXPLAINED EXPENDITURE OF RS.18.50 CRORES. IN THE ABSENCE OF 5 ITA NOS.1505 TO 1507/PUN/2015 BHAGYALAXMI DAIRY FARMS PVT. LTD ANY MENTION OF RS.10 LAKHS, THE PLEA OF ASSESSEE WAS NOT ACCEPTE D. THE CIT(A) FURTHER OBSERVED THAT THERE WAS NO ORDER UNDER SECTION 245D(4) OF THE ACT IN THE CASE OF ASSESSEE AND HENCE, NO MERIT IN THE PLEA OF ASSESSEE. 8. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 9. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE REFERRED TO THE WRITTEN SUBMISSIONS FILED BEFORE THE CIT(A) AND POINTED OUT THAT THE SAID SUM OF RS.10 LAKHS WAS PART OF UNEXPLAINED EXPENDITURE OF RS.18.50 CRORES, WHICH WAS DECLARED IN THE SETTLEMENT PETITION BY PARAG GROUP BEFORE THE INCOME TAX SETTLEMENT COMMISSION. AN ALTERNATE PLEA WAS ALSO MADE THAT EVEN ON MERITS, THERE WAS NO JUSTIFICATION FOR MAKING THE ADDITION. REFERENCE WAS MADE TO THE SEIZED DOCUMENT I.E. PAGE 306 OF THE PAPER BOOK - 3 AND IT WAS POINTED OUT THAT THE NOTINGS ON THE SEIZED PAPER INDICATED THAT THE AMOUNT OF RS.10 LAKHS WAS GIVEN TO THE COMPANY AS IT IS WRITTEN UNDER THE SI DE NAV WHICH WAS WRITTEN IN MARATHI LANGUAGE, WHICH MEANS DEBIT SIDE. IN THE CIRCUMSTANCES, NO ADDITI ON WAS JUSTIFIED IN THE HANDS OF ASSESSEE. 10. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND, RELIED ON THE ORDERS OF AUTHORITIES BELOW. 11. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ADDITION WHICH IS AG ITATED IN ASSESSMENT YEAR 2007 - 08 IS ON ACCOUNT OF ALLEGED UNEXPLAINED EXPENDITURE OF RS.10 LAKHS NOTED ON THE SEIZED DOCUMENT. THE COPY OF THE SEIZED DOCUMENT IS PLACED AT PAGES 7 AND 8 OF THE PAPER BOOK. THE PERUSAL OF THE DOCUMENT IN MARATHI LANGUAGE REFLECTS THAT ON THE LEFT SIDE, THERE 6 ITA NOS.1505 TO 1507/PUN/2015 BHAGYALAXMI DAIRY FARMS PVT. LTD IS MENTION OF TARIK I.E. DATE AND JAMA I.E. CREDIT AND ON THE OTHER SIDE, THE MENTION OF TARIK I.E. DATE AND NAV I.E. DEBIT ON 02.02.2007, THERE IS MENTION OF RS.10 LAKHS (BHAGYALAXMI) AND ON THE CREDIT SIDE, T HERE IS ALSO MENTION OF RS.10 LAKHS AND NAME IS PARAG. THE TOP OF PAGE TALKS OF PARAG DAIRY. THERE ARE OTHER NOTINGS ON THE SAID PAGES AND WE ARE NOT CONCERNED WITH THE SAME. THE ASSESSEE HAS ALSO FILED ENGLISH TRANSLATION OF SEIZED PAGE 306 OF PAPER BO OK - 3, WHERE THE DOCUMENT RELATES TO PARAG DAIRY AND IT NOTES DEBIT OF RS.10 LAKHS TO BHAGYALAXMI. IN OTHER WORDS, THE ASSESSEE HAS RECEIVED RS.10 LAKHS AND IT CANNOT BE SAID THAT THERE IS NOTING OF UNEXPLAINED EXPENDITURE OF RS.10 LAKHS ON THE SAID DOCUME NT. THE SAID DOCUMENT ADMITTEDLY, WAS FOUND FROM THE POSSESSION OF PARAG GROUP AND THE PRESUMPTION UNDER SECTION 132(4A) OF THE ACT IS NOT AGAINST THE ASSESSEE. ONCE IT IS A DEBIT IN THE ACCOUNT OF PARAG DAIRY AND THE ASSESSEE HAS RECEIVED THE SAID AMOUN T FROM PARAG DAIRY, THE SAME COULD NOT BE TREATED AS UNEXPLAINED EXPENDITURE IT ITS HAND JUSTIFYING THE ADDITION UNDER SECTION 69C OF THE ACT. WE FIND NO MERIT IN THE SAID ADDITION AND HENCE, THE SAME IS DELETED. SINCE, WE HAVE DECIDED THIS ISSUE ON MERITS OF THE CASE, WE ARE NOT GOING INTO THE PLEA OF ASSESSEE VIS - - VIS DECLARATION MADE BEFORE THE SETTLEMENT COMMISSION. THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS ALLOWED. 12. THE ASSESSEE IN ITA NO.1506/PUN/2015 AND 1507/PUN/2015 , RELATING TO AS SESSMENT YEAR S 2008 - 09 AND 2009 - 10 HAS RAISED THE ISSUE OF CLAIM OF DEPRECIATION ON ETP PLANT. THE ASSESSEE IN BOTH THE APPEALS HAS RAISED SIMILAR ISSUE. HOWEVER, IN ORDER TO ADJUDICATE THE ISSUE, REFERENCE IS BEING MADE TO THE FACTS AND ISSUES IN ITA NO .1506/PUN/2015. 7 ITA NOS.1505 TO 1507/PUN/2015 BHAGYALAXMI DAIRY FARMS PVT. LTD 13. THE ASSESSEE IN ITA NO.1506/PUN/2015 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION MADE BY THE AO OF RS.13 , 38 , 203/ - U/S. 32 ON ACCOUNT OF EXCESS CLAIM OF DEPRECIATION ON ETP TANK ON THE GROUND THAT THERE IS NO ASSET LIKE ETP PLANT UNDER THE BLOCK OF PLANT AND MACHINERY ON WHICH DEPRECIATION IS ALLOWED @ 80%, AS THERE IS NO SUCH RATE IN THE SCHEDULE PROVIDED FOR ET P PLANT. THE SAME IS NOT JUSTIFIED IN LAW. 2. THE LEARNED CIT(A) FAILED TO CONSIDER THAT SIMILAR ISSUE WAS ALSO RAISED IN THE HANDS OF HOLDING COMPANY M/S. PARAG MILK AND MILK PRODUCTS PVT. LTD. IN THE A.Y. 2008 - 09 AND THE DEPRECIATION @ 80% ON THE ETP PL ANT WAS ALLOWED IN ASSESSMENT U/S.143(3) OF THE ACT. 3. THE LEARNED CIT(A) WHILE CONFIRMING THE ADDITION MADE BY THE AO, ERRED IN NOT APPRECIATING THE FACT THAT NO EVIDENCES OR INCRIMINATING MATERIAL WERE FOUND DURING THE COURSE OF SEARCH THAT THE APPELLANT HAS MADE EXCESS CLAIM OF DEPRECIATION ON ETP PLANT. 4. THE LEARNED CIT(A) WHILE CONFIRMING THE ADDITION MADE BY THE AO, ERRED IN HOLDING THAT A SSESSMENT ORDER PASSED U/S. 143(3) R.W.S. 153(A) IS NOT BAD IN LAW. 14. BRIEF FACTS RELATING TO THE ISSUE ARE THAT WHILE COMPLETING ASSESSMENT FOR THE RELEVANT ASSESSMENT YEAR UNDER SECTION 153A R.W.S. 143(3) OF THE ACT, THE ASSESSING OFFICER VERIFIED THE DEPRECIATION CHART AND OBSERVED THAT THE ASSESSEE HAD CLAIMED DEPRECIATION @ 80% ON ETP TANK. THE A SSESSEE WAS ASKED TO JUSTIFY ITS CLAIM. THE ASSESSEE EXPLAINED THAT IT WAS ENTITLED TO CLAIM THE DEPRECIATION @ 100% THOUGH IT HAD ONLY CLAIMED @ 80%, IN VIEW OF POINT NO.3 (IX)(C) AND 3(IX)(H) OF THE SCHEDULE TO THE INCOME TAX ACT. THE ASSESSEE ALSO EXP LAINED THAT IN THE CASE OF PARAG GROUP, THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDER UNDER SECTION 143(3) OF THE ACT HAD ALLOWED DEPRECIATION ON ETP AT 80%. THE ASSESSING OFFICER HOWEVER, REJECTED THE PLEA OF ASSESSEE AS THERE WAS NO SUCH ASSE T ETP TANK UNDER THE BLOCK OF PLANT & MACHINERY, ON WHICH DEPRECIATION WAS ALLOWABLE AT 80%. THE CLAIM OF THE 8 ITA NOS.1505 TO 1507/PUN/2015 BHAGYALAXMI DAIRY FARMS PVT. LTD ASSESSEE THAT IT WAS WATER POLLUTION CONTROL EQUIPMENT WAS REJECTED AND DEPRECIATION @ 15% WAS ALLOWED. 15. THE CIT(A) UPHELD THE ORDER OF ASSESSING OFFICER. 16. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 17. THE FIRST ISSUE WHICH IS RAISED BY THE ASSESSEE BEFORE US IS THAT IT WAS THE ASSESSMENT COMPLETED UNDER SECTION 153A R.W.S. 143(3) OF THE ACT AND IN THE ABSENCE OF ANY INCR IMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH, THE SAID CLAIM OF DEPRECIATION ON ETP PLANT COULD NOT BE REJECTED. RELIANCE WAS PLACED ON DIFFERENT DECISIONS IN THIS REGARD . ON MERITS, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE REFERRED TO DIFFERENT DOCUMENTS I.E. ACCOUNT EXTRACT OF ETP PLANT IN THE BOOKS OF ACCOUNT WHICH IS PLACED AT PAGES 40 AND 41 OF THE PAPER BOOK. HE FURTHER REFERRED TO THE CERTIFICATE FROM THE MAHARASHTRA POLLUTION CONTROL BOARD PLACED AT PAGES 28 TO 32 OF THE PAP ER BOOK. HE FURTHER REFERRED TO THE PROCESS FLOW CHART AT PAGES 26 AND 27 OF THE PAPER BOOK AND ALSO THE COPIES OF BILL OF VENDORS AT PAGES 33 TO 81 OF THE PAPER BOOK. THE ASSESSEE EXPLAINED THAT SINCE MILK AND MILK PRODUCTS ARE PERISHABLE COMMODITIES, F OOD SAFETY AND HYGIENE W ERE OF PRIMARY IMPORTANCE. HENCE, POTABLE QUALITY WATER WAS USED AT EVERY STAGE OF PRODUCTION RIGHT FROM THE CLEANING OF TANKERS IN WHICH THE MILK WAS COLLECTED AND TRANSPORTED TO THE DAIRY. THE WATER USED FOR WASHING WAS COLLECTE D AND PASSED THROUGH EFFLUENT (WASTE WATER). HE FURTHER STRESSED THAT SUCH TREATMENT PLANT WAS A STATUTORY REQUIREMENT AND IT WAS THE RESPONSIBILITY OF ASSESSEE TO TREAT THE WASTE WATER AND MAKE IT OF HIGH QUALITY BEFORE IT IS DISPOSED OF. HE FURTHER POI NTED OUT THAT 9 ITA NOS.1505 TO 1507/PUN/2015 BHAGYALAXMI DAIRY FARMS PVT. LTD EFFLUENT WAS THE SYSTEM IN WHICH CONTAMINATED WATER WAS CLEANED AND TREATED , TO ACHIEVE THE POLLUTION CONTROL BOARD SPECIFIED NORMS, BEFORE ITS DISPOSAL. HE ALSO EXPLAINED THE PASSAGE AS PER THE FLOW CHART AND POINTED OUT THAT THE ASSESSEE W AS ENTITLED TO THE HIGHER CLAIM OF DEPRECIATION AT 80% WHICH HAS ALREADY BEEN ALLOWED IN THE HANDS OF PARAG GROUP BY THE CIT(A) IN ASSESSMENT YEAR 2008 - 09 AND BY THE ASSESSING OFFICER IN ASSESSMENT YEAR 2003 - 04. 18. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND, RELIED ON THE ORDERS OF AUTHORITIES BELOW. 19. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE WHICH IS RAISED BEFORE US IS THE CLAIM OF ASSESSEE OF HIGHER RATE OF DEPRECIATION IN RESPECT OF ETP P LANT. THE ASSESSING OFFICER HAD TREATED IT AS PART OF PLANT & MACHINERY AND ALLOWED DEPRECIATION AT 15%. THE ASSESSEE ON THE OTHER HAND, IN THE RETURN OF INCOME HAD CLAIMED DEPRECIATION AT 80%. THOUGH DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASS ESSEE CLAIMED DEPRECIATION AT 100% BUT DURING THE COURSE OF HEARING BEFORE US, THE CLAIM WAS MADE AT 80%. THE ASSESSEE REFERRED TO APPENDIX 1 AND 2 OF THE INCOME TAX RULES WHICH PROVIDES THE TABLE OF RATES AT WHICH DEPRECIATION IS ADMISSIBLE. THE CLAIM OF THE ASSESSEE WAS UNDER PART III, PLANT & MACHINERY, POINT NO.8(IX)(C) I.E. WASTE HEAT RECOVERY EQUIPMENT AND (A) I.E. ECONOMIZER A ND FOOD WATER HEATER. THE ASSESSEE HAS STRESSED THAT AS IT WAS INVOLVED IN DAIRY AND MILK PRODUCTS INDUSTRY, WATER WAS USED AT VARIOUS STAGES OF PRODUCTION. SINCE MILK AND MILK PRODUCTS WERE PERISHABLE COMMODITIES, FOOD SAFETY AND HYGIENE WAS PRIMARY IMP ORTANCE. HENCE, POTABLE QUALITY WATER WAS USED AT EVERY STAGE OF PRODUCTION FOR CLEANING THE EQUIPMENT, TANKS IN WHICH THE MILK WAS COLLECTED AND TRANSPORTED TO THE 10 ITA NOS.1505 TO 1507/PUN/2015 BHAGYALAXMI DAIRY FARMS PVT. LTD DAIRIES. THE WATER WHICH WAS USED FOR THIS WASHING WAS THEN COLLECTED AND PASSED ON TO TH E EFFLUENT (WASTE ) WATER TREATMENT PLANT, WHICH WAS NECESSARY ; SINCE IT WAS FIRST STATUTORY REQUIREMENT AND SECONDLY, IT WAS THE MORAL RESPONSIBILITY OF THE ASSESSEE TO MAKE WASTE WATER AS HIGH QUALITY WATER BEFORE IT IS DISPOSED OF IN NATURE. UNDER THE E FFLUENT TREATMENT PLANT, WASTE / CONTAMINATED WATER WAS CLEANED AND TREATED TO ACHIEVE THE POLLUTION CONTROL BOARDS SPECIFIED NORMS BEFORE IT IS DISPOSED OF. THE ASSESSEE HAS FILED PROCESS FLOW CHART OF ETP PLANT AT PAGES 68 AND 69 OF THE PAPER BOOK - 1 WH ICH SHOWS THE FLOW OF WASTE WATER FOR TREATMENT THROUGH DIFFERENT STAGES. THE ASSESSEE HAS ALSO FILED WRITTEN NOTE ON THE JUSTIFICATION AND UTILITY OF ETP PLANT FOR MILK INDUSTRY EXPLAINING VARIOUS STAGES OF WASTE WATER TREATMENT. FURTHER, THE ASSESSEE H AS ALSO ENCLOSED CERTIFICATE FROM THE MAHARASHTRA POLLUTION CONTROL BOARD AT PAGES 70 TO 74 OF THE PAPER BOOK. IN THE TOTALITY OF THE ABOVE SAID EVIDENCES AND EXPLANATION OF THE ASSESSEE, WE FIND MERIT IN THE PLEA OF ASSESSEE THAT THE ASSESSEE IS ENTITLED TO CLAIM THE DEPRECIATION @ 80% ON THE ETP PLANT WHICH FALLS IN THE CATEGORY OF PART III, POINT (IX) C. (A) BEING ENERGY SAVING DEVICE USING WATER HEATER. ANOTHER POINT TO BE NOTED THAT SIMILAR ETP PLANT IS ALLOWED HIGHER DEPRECIATION IN THE CASE OF PARA G GROUP, COPY OF THE ORDER IS PLACED ON RECORD. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO ALLOW DEPRECIATION @ 80% IN THE HANDS OF ASSESSEE. AS WE HAVE DECIDED THIS ISSUE ON MERITS IN FAVOUR OF THE ASSESSEE, WE ARE NOT ADJUDICATING THE SECOND PLEA RAISED BY THE ASSESSEE THAT IN THE ABSENCE OF ANY INCRIMINATING MATERIAL, NO DISALLOWANCE CAN BE MADE ON ACCOUNT OF DEPRECIATION CLAIMED IN THE RETURN OF INCOME. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, ALLOWED. 11 ITA NOS.1505 TO 1507/PUN/2015 BHAGYALAXMI DAIRY FARMS PVT. LTD 20. THE FACTS AND ISSUES IN ITA NO.1507/PUN/2015 ARE IDENTICAL TO THE FACTS AND ISSUES IN ITA NO.1506/PUN/2015 AND OUR DECISION IN ITA NO.1506/PUN/2015 SHALL APPLY MUTATIS AND MUTANDIS TO ITA NO.1507/PUN/2015. 21. IN THE RESULT, ALL THE APPEALS OF ASSESSEE AR E ALLOWED. ORDER PRO NOUNCED ON THIS 31 ST DAY OF OCTO BER , 201 7 . SD/ - SD/ - (ANIL CHATURVEDI) ( SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 31 ST OCTO BER , 2017 . GCVSR / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS) - 13, PUNE 4. THE PR. CIT (CENTRAL) , PUNE. 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / BY ORDER, // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE