M/s. Devi Polymers Pvt. Ltd., CHENNAI V. ACIT, CHENNAI

ITA 165/CHNY/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6219 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 17-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T N BETGERI
• Keywords: Depreciation; Additional depreciation

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHE NNAI . . . , ! , ' # $ BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER . / I.T.A. NO. 165/MDS/2014 / ASSESSMENT YEAR : 2007-08 M/S.DEVI POLYMERS PRIVATE LIMITED, TNK HOUSE, NO.48, ANNA SALAI, CHENNAI600 002 [PAN: AAACD 1779 J] ( !% /APPELLANT) VS ASST. COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-I(4), CHENNAI ( &'!% /RESPONDENT) / APPELLANT BY : SHRI SAROJ KUMAR PARIDA, ADV. / RESPONDENT BY : SHRI T.N.BETGERI, JCIT / DATE OF HEARING : 09-04-2014 ! / DATE OF PRONOUNCEMENT : 09-04-2014 #( / O R D E R PER VIKAS AWASTHY, J.M: THE APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)(C)-II, C HENNAI DATED 28-10-2013 RELEVANT TO THE ASSESSMENT YEAR (AY) 200 7-08. THE I.T.A. NO. 165/MDS/2014 2 APPEAL HAS BEEN FILED WITH A DELAY OF FIVE DAYS. A N AFFIDAVIT CITING REASONS FOR DELAY IN FILING OF THE APPEAL HAS BEEN FILED BY THE ASSESSEE. WE HAVE GONE THROUGH THE CONTENTS OF THE AFFIDAVIT AND ARE SATISFIED THAT THE DELAY OF FIVE DAYS IN FILING OF THE APPEAL HAS BEEN SUFFICIENTLY EXPLAINED. ACCORDINGLY, THE DELA Y IN FILING OF THE APPEAL IS CONDONED. THE APPEAL IS ADMITTED TO BE H EARD ON MERITS. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUF ACTURE AND SALE OF PLASTIC MOLDING COMPOUNDS AND COMPONENT S, WATER TANK PANELS AND HEAT EXCHANGERS. THE ASSESSEE FIL ED ITS RETURN OF INCOME FOR THE AY. 2007-08 ON 22-03-2008 DECLARING TOTAL INCOME AS ` 10,48,52,156/-. THE CASE OF THE ASSESSEE WAS SELEC TED FOR SCRUTINY AND NOTICE U/S.143(2) OF THE INCOME TAX AC T, 1961 (HEREIN AFTER REFERRED TO AS THE ACT) WAS ISSUED TO THE A SSESSEE ON 21-07-2008. IN SCRUTINY ASSESSMENT, THE ASSESSING OFFICER MADE DIS-ALLOWANCE U/S.14A VIDE ORDER DT.21-12-2009. SU BSEQUENTLY, THE ASSESSING OFFICER REVISED HIS ORDER U/S.154 AND DIS-ALLOWED ADDITIONAL DEPRECIATION OF 10% ON THE GROUND THAT A DDITIONAL DEPRECIATION U/S.32(IIA) IS ALLOWABLE ONLY IN THE Y EAR IN WHICH THE NEW PLANT & MACHINERY IS FIRST PUT TO USE. I.T.A. NO. 165/MDS/2014 3 AGGRIEVED AGAINST THE ORDER DATED 21-02-2011 PASSED U/S.154, THE ASSESSEE PREFERRED AN APPEAL BEFORE TH E CIT(APPEALS). THE CIT(APPEALS) FOLLOWING THE DECIS ION OF THE TRIBUNAL IN THE CASE OF DCIT VS. BRAKES INDIA LTD., (ITA NO.249 & 1166/MDS/2010 FOR THE AYS.2005-06 & 2006-07) DECIDE D ON 06-01-2012 DISMISSED THIS GROUND OF APPEAL OF THE A SSESSEE. AGGRIEVED AGAINST THIS ORDER OF THE CIT(APPEALS), T HE ASSESSEE HAS COME IN SECOND APPEAL BEFORE THE TRIBU NAL. 3. SHRI SAROJ KUMAR PARIDA, APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT IN THE EARLIER AY THE ASSET WAS PUT TO USE FOR LESS THAN 180 DAYS. THEREFORE, THE ASSESSEE HA D CLAIMED 50% OF THE ADDITIONAL DEPRECIATION I.E., 10% ADDITIONAL DEPRECIATION IN THE RELEVANT AY. THE ASSESSEE IS CLAIMING REMAININ G 50% OF THE DEPRECIATION IN THE AY UNDER CONSIDERATION IN ACCOR DANCE WITH THE DECISION OF THE TRIBUNAL IN THE CASE OF DCIT VS. COSMO FILMS LTD., REPORTED AS 13 ITR (TRIB) 340 (DEL); ACIT VS. SIL INVESTMENT LT D., REPORTED AS 148 TTJ (DEL) 213; AND M/S.MITC ROLLING MILLS P. LT D. VS. ACIT (ITA NO.2789/MUM/2012) DECIDED ON 13-05-2013. IN ALL THE CASES RELIED UPON, THE TRIBUNAL HAS HELD THAT T HE ASSESSEE IS I.T.A. NO. 165/MDS/2014 4 ENTITLED TO CLAIM REMAINING 50% ADDITIONAL DEPRECIA TION IN CASE THE ASSESSEE HAS CLAIMED 50% ADDITIONAL DEPRECIATION ON NEW ASSET IN THE PRECEDING AY. 4. ON THE OTHER HAND, SHRI T.N.BETGERI, APPEARING O N BEHALF OF THE REVENUE SUBMITTED THAT THE ISSUE IN APPEAL HAS BEEN ADJUDICATED AGAINST THE ASSESSEE BY THE CO-ORDINATE CHENNAI BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. BRAKES INDIA LTD., (SUPRA) DECIDED ON 06-01-2012 (SUPRA). SUBSEQUENTLY, FOLLOW ED IN THE CASE OF M/S.CRI PUMPS (P) LTD., VS. ACIT (ITA NO.1824/MDS/2010 A.Y.2007-08) DECIDED ON 04-04-2013 . 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES. WE HAVE ALSO PE RUSED THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE DECI SIONS RELIED ON BY THE REPRESENTATIVES IN SUPPORT OF THEIR CONTENTIONS . THE ADDITIONAL DEPRECIATION ON NEW PLANT & MACHINERY U/S.32(IIA) H AS BEEN ALLOWED WITH A VIEW TO GIVE BOOST TO THE MANUFACTUR ING SECTOR. BENEFIT OF SUCH ADDITIONAL DEPRECIATION IS IN ADDIT ION TO THE NORMAL DEPRECIATION WHICH IS ALLOWED TO ALL THE ASSESSEES. HOWEVER, THE BENEFIT OF ADDITIONAL DEPRECIATION IS GIVEN SUBJECT TO CERTAIN I.T.A. NO. 165/MDS/2014 5 CONDITIONS. THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. COSMO FILMS LTD., (SUPRA) AND ACIT VS. SIL INVESTMENT LTD., (SUPRA) HAS ALLOWED THE CLAIM OF ASSESSEE FOR 50% O F ADDITIONAL DEPRECIATION U/S.32(I)(IIA) IN RESPECT OF NEW PLANT & MACHINERY INSTALLED AT THE NEW ELIGIBLE INDUSTRIAL UNDERTAKIN G WHERE PLANT & MACHINERY WERE PUT TO USE FOR LESS THAN 180 DAYS IN THE YEAR OF INSTALLATION AND THE ASSESSEE HAD CLAIMED ONLY 50% OF THE ADDITIONAL DEPRECIATION AND THE BALANCE AMOUNT WAS CLAIMED IN THE NEXT YEAR. ON THE OTHER HAND, CHENNAI BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. BRAKES INDIA LTD., (SUPRA) AND M/S.CRI PUMPS (P) LTD., VS. ACIT (SUPRA) HAS TAKEN A CONTRARY VIEW. 6. THE HONBLE SUPREME COURT OF INDIA IN THE CASE O F CIT VS. VEGETABLE PRODUCTS LTD., REPORTED AS 88 ITR 192 (SC) HAS HELD THAT WHERE TWO VIEWS ARE AVAILABLE, THE VIEW IN FAV OUR OF THE ASSESSEE HAS TO BE TAKEN. ACCORDINGLY, FOLLOWING T HE VIEW TAKEN BY THE DELHI BENCH IN THE CASE OF DCIT VS. COSMO FILMS LTD., (SUPRA) AND ACIT VS. SIL INVESTMENT LTD., (SUPRA), WE ALLOW THIS GROUND OF APPEAL OF THE ASSESSEE. THE ASSESSING OF FICER IS I.T.A. NO. 165/MDS/2014 6 DIRECTED TO GRANT BENEFIT OF ADDITIONAL DEPRECIATIO N TO THE ASSESSEE TO THE EXTENT NOT CLAIMED BY THE ASSESSEE IN THE EA RLIER AY. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON WEDNESDAY, THE 09 TH APRIL, 2014 AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) (VIKAS AWAS THY) ( . . . ) ( ! ) '#$ / VICE PRESIDENT % &' / JUDICIAL MEMBER (% /CHENNAI, )& /DATED: 09 TH APRIL, 2014 TNMM &* +,-, /COPY TO: 1. APPELLANT 2. /RESPONDENT 3. ./0 /CIT(A) 4. . /CIT 5. ,12 3 /DR 6. 245 /GF