ACIT, New Delhi V. M/s. SBL Pvt. Ltd, New Delhi

ITA 1513/DEL/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 8287 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 23-06-2009
• Assessment Year: 2006-2007
• Appeal Filed On: 16-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Keywords: Depreciation
• Section: 251

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `G : NEW DELHI) BEFORE HONBLE SR. VICE PRESIDENT SHRI R.P. GARG A ND HONBLE JUDICIAL MEMBER, SHRI RAJPAL YADAV ITA NO.1513/DEL./2009 (ASSESSMENT YEAR : 2006-07) ACIT, CIRCLE 17, VS. M/S SB PACKAGING LTD., NEW DELHI. INDIA ENCLAVE, PASCHIM VIHAR, NEW DELHI. (PAN/GIR NO.AABCS3731Q) (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI T. VASANTHAN, SR. DR ORDER PER R.P. GARG, SR.VP THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORDER OF THE CIT(A) FOR THE ASSESSMENT YEAR 2006-07 AGAINST THE ALLOWANCE ON T HE ADDITON OF RS.28,53,085 MADE BY THE ASSESSING OFFICER ON ACCOUNT OF PANT AND MACHIN ERY. 2. THE ASSESSING OFFICER OBSERVED THAT THE BUSINESS OF THE ASSESSEE HAS GONE THROUGH A SUBSTANTIAL DOWNFALL WHICH IS REFLECTED BY THE SA LE TURNOVER AND HAS DECREASED FROM RS.8,32,92,504 TO RS.6,69,54,450. THE SCRAP GENERA TED FROM 289 TONS AS AGAINST 535 TONS IN FINISHED PRODUCTS IN FINANCIAL YEAR 2005-06 AND THE INSPECTORS REPORT STATING THAT MOST OF THE MACHINES WERE NOT IN USE AND THAT ONLY ONE U NIT WAS IN PROGRESS ONLY IN WHICH POLY-PRINTING FOR THE COMPANY M/S PROCTER & GAMBLE LTD., GOA UNDER THE BRAND NAME WHISPER WAS GOING ON. HE, THEREFORE, DISALLOWED TH E CLAIM OF THE ASSESSEE IN ABSENCE OF USE OF THE PLANT AND MACHINERY BY FOLLOWING THE DEC ISIONS IN THE CASE OF DINESH KUMAR GULAB CHAND AGGARWAL VS. CIT (2004) 267 ITR 768; CI T VS. ORIENTAL COAL CO. LTD. (1994) 2006 ITR 682 AND 76 TAXMAN 240 (CAL.); AND L IQUIDATORS OF PAISA LTD. VS. CIT (1945) 251 ITR 265 (SC). THE COMMISSIONER OF INCOM E-TAX (APPEALS) ALLOWED THE CLAIM OF THE ASSESSEE BY OBSERVING AS UNDER: ITA NO.1513/DEL./2009 (A.Y. : 2006-07) 2 ONCE THE PLANT AND MACHINERY HAS BEEN UTILIZED DUR ING THE YEAR, DEPRECIATION CANNOT BE DISALLOWED ON ADHOC BASIS FOR LESS THAN O PTIMUM UTILIZATION OF MACHINERY DUE TO NON-AVAILABILITY OF PURCHASE ORDER S. ALSO, THE INSPECTORS REPORT IS DATED 22.08.2008 AND THE FINANCIAL YEAR UNDER CO NSIDERATION IS THE PERIOD 01.04.2005 TO 31.03.2006. MOREOVER, THE INSPECTOR S REPORT STATES THAT MOST OF THE MACHINES ARE NOT IN USE; HE HAS NOT POINTED WHICH S PECIFIC MACHINES WERE NOT IN USE. ACCORDINGLY, THE CLAIM OF DEPRECIATION WAS CO RRECT AND ASSESSING OFFICER IS DIRECTED DELETE THE ADDITION OF RS.28,53,085 WHICH IS 10% OF TOTAL DEPRECIATION CLAIMED AT RS.2,85,30,855. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE. WE, TH EREFORE, HEARD THE LD.DR AND CONSIDERED THE RECORD. IN VIEW OF THE CLEAR FINDIN G OF THE COMMISSIONER OF INCOME-TAX (APPEALS) THAT THE COMPANY WAS RUNNING, MANUFACTURI NG AND THE SALE OF PACKAGING OF VARIOUS PRODUCTS HAD TAKEN PLACE DURING IN WHICH TH E MACHINERY AS UTILILSED AND, THEREFORE, THE DEPRECIATION CANNOT BE DISALLOWED ON ADHOC BASIS FOR LESS THAN THE OPTIMUM UTILIZATION OF MACHINERY DO TO NON-AVAILABILITY OF PURCHASE ORDERS. THE INSPECTORS REPORT BEING NOT SPECIFIC IS TO WHICH MACHINERY WERE NOT T O USE. THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS), IN OUR OPINION, IS JUST AN D PROPER AND DOES NOT CALL FOR ANY INTERFERENCE IN THIS REGARD. 4. IN THE RESULT, THE APPEAL IS DISMISSED. 5. ORDER PRONOUNCED IN OPEN COURT ON 23.06.2009. (RAJPAL YADAV) (R.P. GARG) JUDICIAL MEMBER SR. VICE PRESIDENT DATED: JUNE 23, 2009. *SKB* COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A)-X, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. AR/ITAT ITA NO.1513/DEL./2009 (A.Y. : 2006-07) 3