Dy. Commissioner of Income Tax, Lucknow V. M/s U.P Rajya Vidyut Utpadan Nigam Ltd., Lucknow

ITA 162/LKW/2015

• Counselvise Citation: 16223714 RSA 2015
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 24-06-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 24-03-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIVEK MISHRA
• Keywords: Depreciation; Competent authority; Capital expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER ITA NO.162 & 163/LKW/2015 ASSESSMENT YEAR:2010-11 & 2011-12 DCIT RANGE 6 LUCKNOW V. M/S U.P. RAJYA VIDYUT UTPADAN NIGAM LTD. SHAKTI BHAWAN, 14, ASHOK MARG LUCKNOW TAN/PAN:AAACU4749D (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. VIVEK MISHRA, CIT (DR) RESPONDENT BY: SHRI. RAJESH JAIN, C.A. DATE OF HEARING: 24 06 2015 DATE OF PRONOUNCEMENT: 30 06 2015 O R D E R PER SUNIL KUMAR YADAV: THESE APPEALS ARE PREFERRED BY THE REVENUE AGAINST THE RESPECTIVE ORDERS OF THE LD. CIT(A) ON COMMON GROUNDS EXCEPT THE DIFFERENCE IN QUANTUM AND FOR THE SAKE OF REFERENCE WE EXTRACT THE GROUNDS RAISED IN I.T.A. NO. 162/LKW/2015 AS UNDER:- 1. THE CIT(A), LUCKNOW HAS ERRED IN LAW AND ON FACTS OF THE CASE BY ALLOWING DEPRECIATION TO THE ASSESSEE IN THIS YEAR ON THE AMOUNT OF REPAIR & MAINTENANCE EXPENSES AT RS.1,41,61,04,590/- WHICH WAS TREATED BY THE ASSESSING OFFICER AS CAPITAL EXPENDITURE IN A.Y. 2004-05 INSTEAD OF DECIDING THE ISSUE IN A.Y. 2004-05. 2. THE CIT(A), LUCKNOW HAS ERRED IN LAW AND ON FACTS OF THE CASE IN ALLOWING DEPRECIATION TO THE ASSESSEE IN THIS YEAR WHEN THE ISSUE OF CAPITALIZATION OF REPAIR & MAINTENANCE EXPENSES AT RS.1,41,61,04,590/-, HAS ALREADY BEEN CHALLENGED BY THE ASSESSEE IN A. Y. 2004-05, BEFORE HIM AND IS YET TO BE DECIDED BY HIM. :- 2 -: 3. THE CIT(A), LUCKNOW HAS ERRED IN LAW AND ON FACTS OF THE CASE IN ALLOWING DEPRECIATION TO THE ASSESSEE ON REPAIR & MAINTENANCE EXPENSES AT RS.1,41,61,04,590/- WHEN THE ASSESSEE NEVER CLAIMED IT IN ITS RETURN. 2. DURING THE COURSE OF HEARING, THE LD. D.R. HAS INVITED OUR ATTENTION THAT IN ASSESSMENT YEAR 2004-05 THE ASSESSING OFFICER HAS CAPITALIZED THE AMOUNT OF REPAIR AND MAINTENANCE EXPENSES AT RS.1,41,61,04,590/- AND ALLOWED DEPRECIATION THEREON, AGAINST WHICH AN APPEAL WAS FILED BEFORE THE LD. CIT(A) DISPUTING THE CAPITALIZATION OF THE REPAIR AND MAINTENANCE EXPENSES. THAT APPEAL IS STILL PENDING BEFORE THE LD. CIT(A), BUT THE LD. CIT(A) IN SUCCEEDING YEARS I.E. 2010-11 AND 2011-12 HAS ALLOWED DEPRECIATION ON THE AMOUNT CAPITALIZED IN 2004-05 WHICH WAS NOT ALLOWED BY THE ASSESSING OFFICER ON THE GROUND THAT DEPRECIATION OF PREVIOUS YEAR CANNOT BE ALLOWED IN THIS CURRENT YEAR AS NO SUCH CLAIM WAS MADE IN THE RETURN OF INCOME OR COMPUTATION OF INCOME. 3. THE LD. D.R. HAS FURTHER CONTENDED THAT FIRST OF ALL THE LD. CIT(A) SHOULD HAVE ADJUDICATED THE APPEAL FOR ASSESSMENT YEAR 2004-05 AND GIVEN A SPECIFIC FINDING WHETHER REPAIR AND MAINTENANCE EXPENSES CLAIMED BY THE ASSESSEE ARE TO BE CAPITALIZED AND DEPRECIATION IS TO BE ALLOWED. IF THE LD. CIT(A) HOLDS THAT CAPITALIZATION IS PROPER AND DEPRECIATION IS TO BE ALLOWED, THEN IN SUCCEEDING YEAR DEPRECIATION CAN BE ALLOWED ON THE CAPITALIZED AMOUNT, BUT WITHOUT GIVING A SPECIFIC FINDING DEPRECIATION ALLOWED IN ASSESSMENT YEARS 2010-11 AND 2001-12 IS NOT PROPER. 4. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, HAS PLACED RELIANCE UPON THE ORDER OF THE LD. CIT(A) WITH THE SUBMISSION THAT THE LD. CIT(A) HAS RIGHTLY ALLOWED DEPRECIATION, AS IT WAS ALLOWED BY THE ASSESSING OFFICER IN ASSESSMENT YEAR 2004-05. 5. HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWER AUTHORITIES IN THE LIGHT OF THE RIVAL SUBMISSIONS, WE FIND THAT WHEN THE ASSESSING OFFICER HAS CAPITALIZED THE REPAIR AND MAINTENANCE EXPENSES IN ASSESSMENT YEAR 2004- :- 3 -: 05 AND ALLOWED DEPRECIATION AND THE SAME WAS CHALLENGED BY THE ASSESSEE BEFORE THE LD. CIT(A), THE LD. CIT(A) WITHOUT ADJUDICATING THE ISSUE IN ASSESSMENT YEAR 2004-05 SHOULD NOT HAVE ALLOWED THE DEPRECIATION ON THE CAPITALIZED AMOUNT THE IMPUGNED ASSESSMENT YEAR. THEREFORE, WE ARE OF THE VIEW THAT THE MATTER SHOULD GO BACK TO THE FILE OF THE LD. CIT(A) AND THE LD. CIT(A) SHOULD ADJUDICATE THESE APPEALS ALONG WITH THE APPEALS PENDING BEFORE HIM FOR ASSESSMENT YEAR 2004-05 IN WHICH THE ISSUE OF CAPITALIZATION OF AMOUNT OF REPAIR AND MAINTENANCE EXPENSES IS PENDING. IF THE APPEALS ARE PENDING BEFORE DIFFERENT LD. CIT(A)S, A NECESSARY ORDER BE PASSED BY THE COMPETENT AUTHORITY FOR DISPOSAL OF ALL THE APPEALS BY ONE LD. CIT(A). ACCORDINGLY THE ORDERS OF THE LD. CIT(A) ARE SET ASIDE AND THE MATTER IS RESTORED TO HIS FILE FOR ADJUDICATION OF THE IMPUGNED ISSUE ALONG WITH OTHER APPEAL PENDING BEFORE THE LD. CIT(A) FOR ASSESSMENT YEAR 2004-05. 6. IN THE RESULT, APPEALS OF THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTIONED PAGE. SD/- SD/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:30 TH JUNE, 2015 JJ:2406 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR