DCIT,CC-II , Kolkata, Kolkata V. M/s U A L Industries Ltd, Kolkata

ITA 1652/KOL/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3092 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2013
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 09-11-2012
• Court: TRIBUNAL
• Department Lawyers: L K S DEHIYA
• Keywords: Depreciation
• Section: 143(3); 80IB

Judgement Text

, C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () BEFORE . . . . . . . . , !' /AND #! $'# , ) [BEFORE SHRI K. K. GUPTA, AM & SHRI MAHAVIR SINGH, JM] '% '% '% '% / I.T.A NO. 1652/KOL/2012 $&' !() $&' !() $&' !() $&' !()/ // / ASSESSMENT YEAR: 200 9-1 0 DEPUTY COMMISSIONER OF INCOME-TAX, VS. M/S. UAL I NDUSTRIES LTD. CENTRAL CIRCLE-II, KOLKATA. (PAN:AAACU3497L) (+, /APPELLANT ) (-.+,/ RESPONDENT ) DATE OF HEARING: 18.04.2013 DATE OF PRONOUNCEMENT: 18.04.2013 FOR THE APPELLANT: SHRI L. K. S. DEHIYA, CIT( DR) FOR THE RESPONDENT: SHRI RAJEEVA KUMAR, ADVOCATE / / ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A), CENRAL-III, KOLKATA IN APPEAL NO. 97/CC-II/CIT(A)C-III/11-12/KOL DATED 22.08.2012 . ASSESSMENT WAS FRAMED BY DCIT, CC- II, KOLKATA U/S. 143(3) OF THE INCOME-TAX ACT, 196 1 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2009-10 VIDE HIS ORDER DATED 20.12. 2011. 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGA INST THE ORDER OF CIT(A) DIRECTING THE AO TO TREAT THE ITEMS OF ELECTRICAL EQUIPMENTS AS PLAN T AND MACHINRY INSTEAD OF TREATMENT GIVEN BY AO AS FURNITURE AND FIXTURE. FOR THIS, REVENUE HA S RAISED FOLLOWING GROUND NO.1: 1.LD. CIT(A) ERRED BOTH IN FACTS AS WELL AS IN LAW IN GRANTING RELIEF BY DIRECTING TO TREAT THE ITEMS OF ELECTRIC EQUIPMENT AS PLANT AND MACHINERY INSTEAD OF FURNITURE & FIXTURE, IGNORING THE SPECIFIC NOTE 5 BELOW THE DEPRECIATION TABLE IN APPENDIX-1 OF THE INCOME TAX RULES, WHEREAS IT IS SPECIALLY MENTI ONED THAT ELECTRICAL FITTINGS INCLUDING ELECTRICAL WIRING; SOCKET; SWITCHES; FITTINGS AND F ANS ARE FURNITURE AND FITTINGS. 3. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO ITAT ORDER IN ASSESSEES OWN CASE FOR AY 2006-07 IN ITA NO.2004/K OL/2009 DATED 09.08.2012, WHEREIN THIS ISSUE WAS DEALT AT PARAS 9 AND 10 AS UNDER: 9. IN REGARD TO GROUND NO.(IV) OF THE REVENUES AP PEAL, IT WAS SUBMITTED BY THE LD.DR THAT THE ISSUE WAS AGAINST THE ACTON OF THE LD. CI T(A) IN DIRECTING THE AO TO ALLOW DEPRECIATION ON ELECTRICAL NSTALLATION AS PLANT AN D MACHINERY INSTEAD OF FURNTURE AND FIXTURE. AT THE TIME OF HEARING IT WAS FAIRLY AGREE D BY BOTH THE SIDES THAT THE AO HAS 2 ITA NO.1652/K/2012 UAL IND USTRIES LTD. AY: 2009-10 DISALLOWED THE DEPRECIATION CLAIMED BY THE ASSESSEE AT 15% AND ALLOWED THE SAME AT 10% AS THE VERIFICATION TO SHOW THAT THE ELECTRICAL INSTALLATION WERE PLANT AND MACHINERY COULD NOT BE DONE. IT WAS FULLY AGREED BY BOTH THE SDES THAT THE ISSUE CAN BE RESTORED TO THE FILE OF AO FOR GRANTING THE ASSESSE E AN OPPORTUNITY TO SUBSTANTIATE ITS CASE THAT THE INSTALLATION WERE PLANT AND MACHINERY AS ALSO FOR THE VERIFICATION BY THE AO. 10. WE HAVE CONSDERED THE RIVAL SUBMISSIONS. AS BO TH THE SIDES HAVE AGREED TO RESTORE THE ISSUE TO THE FILE OF AO FOR GRANTING THE ASSESS EE ADEQUATE OPPORTUNITY TO SUBSTANTIATE ITS CASE THAT ELECTRICAL INSTALLMENTS WERE PLANT AND MACHINERY AND NOT FURNITURE AND FIXTURE AS ALSO TO GRANT THE AO AN OP PORTUNITY TO VERIFY SUCH CLAIM THIS ISSUE IS RESTORED TO THE FILE OF AO. IN THE CIRCUMS TANCES GROUND NO.(IV) OFTHE REVENUES APPEAL STANDS ALLOWED FOR STATISTICAL PURPOSES. 4. LD. COUNSEL FOR THE ASSESSEE AS WELL AS LD. CIT, DR FAIRLY CONCEDED THAT THE SIMILAR DIRECTION CAN BE GIVEN IN THIS YEAR ALSO. RESPECTF ULLY FOLLOWING THE TRIBUNALS DIRECTION IN EARLIER YEAR IN ASSESSEES OWN CASE IN ITA NO.2004/ K/2009, WE SET ASIDE THE ISSUE IN TERMS OF THE SAME. THIS ISSUE OF REVENUES APPEAL IS ALLOWE D FOR STATISTICAL PURPOSES. 5. THE NEXT ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER OF CIT(A) ALLOWING 100% DEPRECIATION ON FLY ASH HANDLING SYSTEM. FOR THIS, REVENUE HAS RAISED FOLLOWING GROUND NOS. 2 AND 2.1: 2. LD. CIT (A) ERRED BOTH IN FACTS AS WELL AS IN A LLOWING 100% DEPRECIATION ON FLY ASH HANDLING SYSTEM BY ACCEPTING THE SUBMISSION OF THE APPELLANT OF TREATING PLANT & MACHINERY USED FOR MANUFACTURNG ASBESTOS- SHEET FR OM FLY ASH (RAW MATERIAL) AS FLY ASH HANDLING SYSTEM UNDER POLLUTION CONTROL EQUIPM ENT INSTEAD OF PLANT & MACHINERY, IGNORING THE MATERIAL FACTS ON RECORD O F FLY ASH BEING USED AS RAW MATERIAL FOR MANUFACTURING OF ASBESTOS SHEET AND PLANT AND MACHINERY LABELED AS FLY ASH HANDLING SYSTEM IS NOT FOR POLLUTION CONT ROL. 2.1. LD. CIT (A) ERRED N ALLOWING ASSESSEES APPEA L BY ACCEPTING PLANT AND MACHINERY IN THE NAME OF FLY ASH HANDLING SYSTEM UNDER POLLU TION CONTTOL EQUIPMENT IN ORDER TO GET 100% DEPRECIATION, IGNORING THE MATERIAL FACT O F USE OF PLANT & MACHINERY FOR MANUFACTURING OF ASBESTOS-SHEETS. 6. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE STAT ED THAT THE ISSUE IS COVERED IN FAVOUR OF ASSESSEE AND AGAINST THE REVENUE WHEREBY HONBLE T HIRD MEMBER OF THIS TRIBUNAL IN ITA NO.2004/K/2009 HAS CONFIRMED THE ORDER OF CIT(A) VI DE PARA 10 AND 11 AS UNDER: 10. IN THIS CONTEXT IT IS RELEVANT TO MENTION THE PRINCIPLE OF INTERPRETATION CONTAINED IN THE LEGAL MAXIM GENERALIA SPECIALIBUS NON DEROGANT. A SPECIAL PROVISION NORMALLY EXCLUDES THE OPERATION OF A GENERAL PROVISION. THIS PRINCIPLE CAN BE RESORTED FOR DECIDING THE COMPETING AVERMENTS OF TWO PROVISIONS IN THE SA ME ENACTMENT, A GENERAL AND A SPECIAL PROVISION WITH SOME OVERLAPPING BETWEEN THE TWO. IN THE PRESENT CASE, THE FLY ASH HANDLING SYSTEM, EVEN THOUGH CLASSIFIED UNDER PLANT AND MACHINERY AS A GENERAL ITEM, IS STILL QUALIFIED AS A DIFFERENT CLASS UNDER THE HEAD ING AIR POLLUTION CONTROL EQUIPMENT ENTITLED FOR HIGHER AMOUNT OF DEPRECIATION. THEREFO RE, THE SPECIAL CATEGORY, UNDER WHICH AIR POLLUTION CONTROL EQUIPMENT IS PLACED, APPLIES TO THE FLY ASH HANDING SYSTEM 3 ITA NO.1652/K/2012 UAL IND USTRIES LTD. AY: 2009-10 INSTALLED BY THE ASSESSEE. ITS ELIGIBILITY FOR HIGH ER AMOUNT OF DEPRECIATION WILL NOT BE SHADOWED BY THE GENERAL RATE PROVIDED FOR PLANT AND MACHINERY. 11. L AGREE WITH THE ORDER PASSED BY THE LEARNED AC COUNTANT MEMBER AND HOLD ALONGWITH HIM THAT THE FLY ASH HANDLING SYSTEM INSTALLED BY T HE ASSESSEE IS ELIGIBLE TO BE TREATED AS AIR POLLUTION CONTROL EQUIPMENT FOR THE PURPOSE OF GRANTING DEPRECIATION AT 100%. 7. LD. SR. DR ALTHOUGH STATED THAT THE ISSUE IS COV ERED BY TRIBUNALS THIRD MEMBERS DECISION IN ASSESSEES OWN CASE BUT TO ALIVE THIS ISSUE FOR CONTESTING THE SAME SO THAT THE MATTER CAN BE RAISED BEFORE HONBLE HIGH COURT. FROM THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT THE ISSUE IS SQUARELY COVERED IN F AVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THIRD MEMBERS DECISION IN ASSESEES OWN CASE IN ITA NO. 2004/K/2009 DATED 28.01.2013. RESPECTFULLY FOLLOWING THE SAME WE DISMISS THE ISSU E OF REVENUES APPEAL. 8. THE NEXT ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER OF CIT(A) IN HOLDING THAT UNIT-1 AND UNIT-II AT TUNGADHOWA SHOULD BE TREATED AS INDEPENDENT AND SEPARATE FROM EACH OTHER FOR THE ALLOWANCE OF DEDUCTION U/S. 80IB OF T HE ACT. FOR THIS, REVENUE HAS RAISED FOLLOWING GROUND NO.3: LD. CIT(A) ERRED BOTH IN FACTS AS WELL AS IN LAW I N HOLDING THAT UNIT-1 & UNIT-II AT TUNGADHOWA SHOULD BE TREATED AS INDEPENDENT AND SEP ARATE FROM EACH OTHER AND ALLOWING DEDUCTION U/S. 80IB TO BOTH THE UNITS INDEPENDENTLY WITHOUT CONSIDERING THE MATERIAL FACT ON RECORD THAT THERE HAS BEEN ONE UNIT ONLY OPERATI NG AT THE PLACE WITHIN SAME BOUNDARY WALL UNDER THE SAME MANAGEMENT AND WITH THE SAME IN FRASTRUCTURAL FACILITY THAT HAS BEEN EXPANDED AND THUS WRONGLY BEEN HELD THE EXPANSION O F EXISTING UNIT AS UNIT-II FOR THE PURPOSE OF CLAIM OF DEDUCTION U/S. 80IB. 9. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE AS W ELL AS LD. SR. DR FAIRLY CONCEDED THAT THE ISSUE IS SQUARELY COVERED BY ASSESSEES OWN CASE FO R AY 2002-03 AND 2005-06 IN ITA NO.1783/K/2005 DATED 21.04.2006 AND ITA NO.143/K/20 09 DATED 28.04.2009 RESPECTIVELY. EVEN THE SAME DECISION WAS FOLLOWED BY TRIBUNAL IN ITA NO. 2004/K/2009 DATED 09.08.2012 FOR AY 2006-07, WHEREIN THE ISSUE WAS DECIDED AGAIN ST THE REVENUE AND IN FAVOUR OF ASSESEE VIDE PARA 4 AND 5 AS UNDER: 4. AT THE TIME OF HEARING IT WAS FAIRLY AGREED BY BOTH THE SIDES THAT GROUND NOS. (I)AND (II) WHICH WAS AGAINST THE ACTION OF THE LD. CIT(A) IN GRANTING THE ASSESSEE THE BENEFLT OF DEDUCTION U/S 801B OF THE IT ACT WAS SQUARELY COVER ED BY THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR A. YRS. 2002-03 AND 2005-06 IN ITA NO.1783/KOL/2005 DATED 21.04.2006 AND ITA NO. 143/ KOL/2009 DATED 28.04.2009 RESPECTIVELY. 5. WE HAVE CONSIDERED THE SUBMISSIONS. AS IT IS NOT ICED THAT THIS ISSUE IN GROUND NOS.(I) AND (II) OF THE REVENUES APPEAL IS SQUARELY COVERED BY THE DECISION OF THE CO- ORDNATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE REFERR ED TO (SUPRA). THE FINDINGS OF THE LD. CIT(A) ON THIS ISSUE STAND CONFIRMED. CONSEQUENTLY GROUND NOS. (I) AND (II) OFTHE REVENUES APPEAL STAND DISMISSED. 4 ITA NO.1652/K/2012 UAL IND USTRIES LTD. AY: 2009-10 RESPECTFULLY FOLLOWING THE SAME, WE DISMISS THE ISS UE OF REVENUES APPEAL 10. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. 11. ORDER PRONOUNCED IN THE OPEN COURT ON 18.04.201 3 SD/- SD/- . . . . . . . . , #! #! #! #! $'# $'# $'# $'# , (K. K. GUPTA) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( 0 0 0 0) )) ) DATED : 18TH APRIL, 2013 !12 $&34 $5! JD.(SR.P.S.) 5 ITA NO.1652/K/2012 UAL IND USTRIES LTD. AY: 2009-10 / 6 -$$7 87(9- COPY OF THE ORDER FORWARDED TO: 1 . +, / APPELLANT DCIT, CC-II, KOLKATA. 2 -.+, / RESPONDENT M/S. UAL INDUSTRIES LTD., 16, MAY FAIR ROAD, KOLKATA- 700 019. 3 . $/& ( )/ THE CIT(A), KOLKATA 4. 5. $/& / CIT KOLKATA 7!>$ -$& / DR, KOLKATA BENCHES, KOLKATA .7 -$/ TRUE COPY, /&?/ BY ORDER, # '4 /ASSTT. REGISTRAR .