ACIT, Dhule V. M/s DREAM CONSTRUCTIONS, Nandurbar

ITA 1555/PUN/2013

• Counselvise Citation: 155524514 RSA 2013
• Duration Of Justice: 1 year(s) 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-12-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 05-08-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 143(3); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.1555/PN/2013 (ASSESSMENT YEAR 2009-10) ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 3(1), DHULE. . APPELLANT VS. M/S DREAM CONSTRUCTIONS, NEAR TELEPHONE EXCHANGE, KHODAI MATA MANDIR ROAD, NANDURBAR 425 412. PAN : AAEFD8999D . RESPONDENT DEPARTMENT BY : SHRI RAJESH DAMOR ASSESSEE BY : SHRI NIKHIL PATHAK DATE OF HEARING : 08-12-2014 DATE OF PRONOUNCEMENT : 15-12-2014 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEAL BY THE REVENUE IS DIRECTED AGA INST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I, NASHIK DATED 15.05.2013 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 27.12.2011 PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) PERTAINING TO THE ASSESSMENT YEAR 2009-10. 2. IN THIS APPEAL, REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THE LD. CIT(A) HAS ERRED IN FACT IN CIRCUMSTANC ES AND IN LAW, IN ALLOWING THE GROUND OF ASSESSEE IN RESPECT OF THE D ISALLOWANCE OF RS.40,48,605/- MADE BY THE ASSESSING OFFICER BY RES TRICTING THE DEPRECIATION TO 25 % AS AGAINST 50% CLAIMED BY THE ASSESSEE AS T HE ASSET WAS PUT TO USE FOR LESS THAN 180 DAYS. 2. THE LD. CIT (A) HAS ERRED IN HOLDING THAT THE AS SESSEE'S CLAIM OF DEPRECIATION IS CORRECT AS THE VEHICLES WERE ACQ UIRED BETWEEN 01.01.2009 & 30.03.2009 IN VIEW NOTIFICATION NO. 10/2009 F. NO. 142/1/09/TPL DT. 19.01.2009 TO 31.03.2009, THEREFORE ASSESSEE IS ELI GIBLE FOR SPECIAL RATE OF DEPRECIATION OF 50%, THROUGH THESE VEHICLES WERE US ED FOR LESS THAN 180 DAYS. ITA NO.1555/PN/2013 3. THE LD. CIT (A) HAS ERRED, IN ALLOWING THE GROUN D OF ASSESSEE IN RESPECT OF DISALLOWANCE OF RS. 1,50,183/- MADE B Y THE ASSESSING OFFICER BY DISALLOWING THE DEPRECIATION CLAIMED AS THE ASSESSE E FAILED TO SUBSTANTIATE THAT THE ASSET WERE PUT TO USE IN THE CURRENT FINAN CIAL YEAR. 4. THE LD. CIT (A) HAS ERRED IN FACTS IN CIRCUMSTAN CES AND IN LAW IN HOLDING THAT THE ASSESSEE'S CLAIM OF DEPRECIATIO N IS CORRECT AS THE ASSESSEE HAS PURCHASED AND PUT TO USE THE ASSETS AFTER 01.10 .2008 AND HENCE THE CLAIM OF DEPRECIATION @ 7.5% IS ALLOWABLE. 3. THE FIRST ISSUE IN THIS APPEAL IS WITH REGARD TO THE DEPRECIATION ALLOWABLE ON COMMERCIAL VEHICLES PURCHASED BY THE ASSESSEE DU RING THE PERIOD 01.01.2009 TO 30.03.2009. IN THIS CONTEXT, THE REL EVANT FACTS ARE THAT IN TERMS OF CBDT NOTIFICATION NO.10 OF 2009 DATED 19.01.2009 COMMERCIAL VEHICLES ACQUIRED ON OR AFTER 01.01.2009 BUT BEFORE 01.04.20 09 AND PUT TO USE BEFORE 01.04.2009 WERE ENTITLED FOR DEPRECIATION @ 50%. T HE DEPRECIATION ON SUCH COMMERCIAL VEHICLES, BEING TRUCK (TRIPPER) AND TRAN SIT MIXER WITH CHASIS AMOUNTED TO RS.80,97,209/-. THE ASSESSING OFFICER ALLOWED THE DEPRECIATION @ 50% BUT APPLIED THE PROVISIONS OF 2 ND PROVISO BELOW SECTION 32(1) OF THE ACT AND RESTRICTED THE ALLOWANCE OF DEPRECIATION TO FIF TY PERCENT OF THE NORMAL CLAIM, AS THE ASSETS WERE PUT TO USE FOR A PERIOD O F LESS THAN 180 DAYS IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. ACCORDINGLY, DEPRECIATION AMOUNTING TO RS.40,48,605 /- WAS DISALLOWED. THE CIT(A) HAS SINCE ALLOWED THE CLAIM OF THE ASSESSEE, AGAINST WHICH REVENUE IS IN APPEAL BEFORE US. 4. AFTER HEARING THE RIVAL STANDS, IT IS NOTEWORTHY THAT THE CIT(A) HAS ERRED IN ALLOWING ASSESSEES CLAIM BY MERELY RESORTING TO THE NOTIFICATION OF THE CBDT DATED 19.01.2009 (SUPRA). NO DOUBT, NEW COMME RCIAL VEHICLES ACQUIRED ON OR AFTER 01.01.2009 AND BEFORE 01.04.20 09 ARE ELIGIBLE FOR DEPRECIATION @ 50% IN TERMS OF THE CBDT NOTIFICATIO N DATED 19.01.2009 (SUPRA). SO HOWEVER, THE SAID NOTIFICATION DOES NO T DISABLE THE APPLICABILITY OF 2 ND PROVISO TO SECTION 32(1) OF THE ACT WHICH PRESCRIB ES THAT WHERE THE ASSET IS ITA NO.1555/PN/2013 PUT TO USE FOR A PERIOD OF LESS THAN 180 DAYS IN TH E PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ALLOWA NCE OF DEPRECIATION IN RESPECT OF SUCH ASSET SHALL BE RESTRICTED TO FIFTY PERCENT OF THE AMOUNT OTHERWISE ALLOWABLE. THEREFORE, IN OUR VIEW, THE A SSESSING OFFICER MADE NO MISTAKE IN SCALING DOWN THE ASSESSEES CLAIM FOR DE PRECIATION IN VIEW OF THE 2 ND PROVISO TO SECTION 32(1) OF THE ACT, WHICH HAS BEE N ERRONEOUSLY ALLOWED BY THE CIT(A). THE ORDER OF THE CIT(A) ON THIS ASPECT IS SET-ASIDE AND THAT OF THE ASSESSING OFFICER IS RESTORED. THUS, REVENUE SUCCE EDS ON THE GROUND OF APPEAL NO.1. 5. THE SECOND GROUND IN THIS APPEAL RELATES TO ASSE SSEES CLAIM FOR DEPRECIATION AMOUNTING TO RS.1,50,183/- ON VIBRATOR Y COMPACTOR WHICH WAS CLAIMED TO HAVE BEEN PURCHASED ON 30.03.2009. THE ASSESSING OFFICER DISALLOWED THE CLAIM ON THE GROUND THAT ASSESSEE HA D PURCHASED THE ASSET ON 30.03.2009 AND THERE WAS NO MATERIAL TO SUBSTANTIAT E THAT THE SAME WAS PUT TO USE WITHIN PREVIOUS YEAR RELEVANT TO THE INSTANT AS SESSMENT YEAR. THE CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE ON THE GROUND THA T ASSESSEE HAD DEMONSTRATED THAT THE ASSET WAS PUT TO USE IMMEDIAT ELY ON ITS PURCHASE ON 30.03.2009. AGAINST SUCH A DECISION OF THE CIT(A), REVENUE IS IN APPEAL BEFORE US. 6. ON THIS ASPECT, WE HAVE HEARD THE RIVAL PARTIES AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. OSTENSIBLY, THE CIT(A) D OES GIVE A FINDING THAT ASSESSEE HAS SUCCEEDED IN DEMONSTRATING THAT THE AS SET WAS PUT TO USE IMMEDIATELY UPON PURCHASE, I.E. BEFORE 31.03.2009. SO HOWEVER, THE AFORESAID FINDING OF THE CIT(A) IS QUITE BALD AND I S DEVOID OF ANY FACTUAL SUPPORT. IN-FACT, NO MATERIAL HAS BEEN REFERRED TO BY THE CIT(A) IN ORDER TO ARRIVE AT SUCH A FINDING. THEREFORE, WE ARE UNABLE TO SUSTAIN SUCH A FINDING OF THE CIT(A). ACCORDINGLY, ON THIS ASPECT, THE ORDER OF THE CIT(A) IS SET-ASIDE ITA NO.1555/PN/2013 AND THAT OF THE ASSESSING OFFICER IS RESTORED. THU S, ON THIS ASPECT, REVENUE ALSO SUCCEEDS. 7. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH DECEMBER, 2014. SD/- SD/- (SUSHMA CHOWLA) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 15 TH DECEMBER, 2014. SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-I, NASHIK; 4) THE CIT-I, NASHIK; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE