DCIT, Tiruppur V. R.Geetha, Tiruppur

ITA 166/CHNY/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90482 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2015
• Appeal Filed By: Department
• Bench Allotted: D
• Assessment Year: 2005-2006
• Appeal Filed On: 21-01-2015
• Court: TRIBUNAL
• Department Lawyers: N MADHAVANJCIT
• Assessee Lawyers: VIJAYA KUMAR C A
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI ... , . , , BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.166 /MDS./2015 ( !' #' / ASSESSMENT YEAR :2005-06) DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2, 121, SIXTY FEET ROAD, TIRUPUR 641 602 VS. SMT R.GEETHA , NO.207/86,MANGALAM ROAD, KARUVAMPALAYAM, TIRUPUR 641 604. PAN ACZPG 3469 J ( / APPELLANT ) ( / RESPONDENT ) $% & ' / APPELLANT BY : MR.N.MADHAVAN,JCIT, D.R ()$% & ' / RESPONDENT BY : MR.VIJAYA KUMAR C.A * + & ,- / DATE OF HEARING : 23.04.2015 .# & ,- /DATE OF PRONOUNCEMENT : 19.06.2015 / O R D E R PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE REVENUE, AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-II, COIMB ATORE DATED ITA NO.166 /MDS/2015 2 31.10.2014 IN ITA NO.160/13-14 PASSED UNDER SEC.14 3(3) READ WITH SECTION SEC. 250 OF THE ACT. 2. THE REVENUE HAS RAISED FOUR ELABORATE GROUNDS I N ITS APPEAL; HOWEVER THE CRUX OF THE ISSUE IS THAT THE REVENUE I S AGGRIEVED BY THE ORDER OF THE LD. CIT (A), WHO HAD ERRED IN ALLOWING THE CLAIM OF HIGHER RATE OF DEPRECIATION ON WIND MILL. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSES SEE IS AN INDIVIDUAL, ENGAGED IN THE BUSINESS OF PRODUCING WI ND ENERGY GENERATION AND ALSO PARTNER IN VARIOUS FIRMS, FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2005-06 ON 14.12.2005 DECLARING HER TOTAL INCOME AS ` 7,28,970/-. INITIALLY THE RETURN WAS PROCESSED U/S. 143(1) OF THE ACT. SUBSEQUENTLY IT WAS NOTED BY THE LD. A SSESSING OFFICER THAT THE ASSESSEE HAD CLAIMED DEPRECIATION ON HER W INDMILL @ 80% ON THE COST OF ASSET. IT WAS FURTHER NOTICED THAT SHE HAD NOT EXERCISED THE OPTION AS PRESCRIBED UNDER RULE 5 OF THE IT RUL ES. THEREFORE, NOTICE WAS ISSUED U/S.148 OF THE ACT AND ASSESSMENT WAS COMPLETED U/S. 143(3) R.W.S 147 OF THE ACT ON 21.03.2013 WHER EIN THE LD. ITA NO.166 /MDS/2015 3 ASSESSING OFFICER DISALLOWED THE CLAIM OF HIGHER DE PRECIATION 80% TO THE ASSESSEE BECAUSE SHE HAS NOT EXERCISED THE OPTI ON BEFORE THE DUE DATE OF FILING OF HER RETURN I.E ON 31.10.2006 SIC. 31.10.2005. ON APPEAL, THE LD. CIT (A) ALLOWED THE CLAIM OF THE AS SESSEE BY OBSERVING AS FOLLOWS:- 6. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF T HE APPELLANT AND THE MATERIALS AVAILABLE ON RECORD. A PERUSAL OF THE DE TAILS FILED WOULD INDICATE THAT THE ASSESSEE HAS PRODUCED A COPY OF THE LOCAL DELIVERY BOOK MAINTAINED BY THE CHARTERED ACCOUNTANT CONFIRMING T HAT THE ASSESSEE HAS FILED HER OPTION FOR CLAIMING OF DEPRECIATION ON WI ND MILLS ON 2/5/2005. THEREFORE, ON FACTS IT IS CLEAR THAT THE ASSESSEE H AS FILED THE OPTION BEFORE THE DUE DATE OF FILING THE RETURN. FURTHER THE TWO CASE LAWS CITED BY THE APPELLANT I.E. (I) CIT VS. WEB COMMERCE (INDIA) (P) LTD. AND (II) CIT VS. COIMBATORE ELECTRICALS (P) LTD. BOTH BY HONBLE DEL HI HIGH COURT INDICATE THAT THE COURTS HAVE HELD THAT FILING OF NON-STATUT ORY FORMS ARE ONLY DIRECTORY AND NOT MANDATORY AND THE ASSESSEE IS FREE TO FILE SUCH REPORTS BEFORE THE FRAMING OF THE ASSESSMENT. 6.1. IN A RECENT JUDGMENT, THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. BEST CORPORATION P LTD IN APPEAL NO.772/2014 HA S HELD THAT: ITA NO.166 /MDS/2015 4 IN THE ABOVE SAID DECISION, THIS COURT FOLLOWING TH E DECISION OF THE BOMBAY HIGH COURT REPORTED IN 229 ITR 772 (CIT V. V IJAYA HIRASA KALAMKAR(HUF), HELD AS FOLLOWS : 20. A READING OF THE ABOVE SAID DECISION OF THE BOMBAY HIGH COURT MAKES IT CLEAR THAT IF THE ASSESSEE EXERCISED THE O PTION IN TERMS OF SECOND PROVISO TO RULE 5(1A) OF THE IT RULES AT THE TIME O F FURNISHING OF RETURN OF INCOME, IT WILL SUFFICE AND NO SEPARATE LETTER OR R EQUEST OR INTIMATION WITH REGARD TO OF EXERCISE OF OPTION IS REQUIRED. SINCE THE RETURNS ARE FILED IN ACCORDANCE WITH S.139(1) OF THE IT ACT AND THE FORM PRESCRIBED THEREIN MAKE A PROVISION FOR EXERCISING AN OPTION IN RESPEC T OF THE CLAIM OF DEPRECIATION, NO SEPARATE PROCEDURE IS REQUIRED, AS CONTENDED BY THE DEPARTMENT. WE ARE IN AGREEMENT WITH THE REASONING OF THE TRIBUNAL. 6.2. IN VIEW OF THE BINDING DECISION OF THE JURISD ICTIONAL HIGH COURT ALSO THE ASSESSEES CLAIM IS ALLOWED. 4. AT THE OUTSET, THE LD. A.R. POINTED OUT THAT TH E ASSESSEE HAD EXERCISED THE OPTION BEFORE THE LD. ASSESSING OFFIC ER VIDE HER LETTER DATED 29.4.2005 WHICH WAS RECEIVED BY THE DEPARTMEN T ON 2.5.2005. THE COPY OF THE LETTER WRITTEN BY THE ASSESSEE IS P RODUCED BEFORE US. THE LD. A.R. ALSO RELIED ON THE DECISION OF THE CAS E IN M/S.NIRANI SUGARS LTD. VS. ACIT IN ITA NOS.1242/BANG./2013 & 1 63/PNJ/2014, ORDER DATED 19 TH FEBRUARY, 2015 TO SUPPORT THE CLAIM OF THE ASSESSE E. LD. D.R ON THE OTHER HAND RELIED ON THE ORDER OF TH E LD. ASSESSING OFFICER. ITA NO.166 /MDS/2015 5 5. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PE RUSED THE MATERIALS AVAILABLE ON RECORD. THE LD. CIT (A) HAS ALLOWED THE APPEAL FOLLOWING THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. VIJAYA HIRASA KALAMKAR (HUF). F URTHER, THE CASE M/S.NIRANI SUGARS LTD. VS. CIT CITED BY THE LD. A.R ALSO SUPPORTS THE CASE OF THE ASSESSEE WHEREIN THE DECISION OF THE CH ENNAI BENCH OF THE TRIBUNAL IN THE CASE K.RAVI V/S. ACIT REPORTED IN 2ITR(TRIB)752 IS FOLLOWED. THE RELEVANT PARA IS REPRODUCED HEREIN BE LOW FOR REFERENCE:- 6. IN THE CASE IN HAND, THERE IS NO DISPUTE REGARD ING ENTITLEMENT OF THE ASSESSEE TO HIGHER RATE OF DEPRECIATION ON WIND MIL L AS PER APPENDIX I, BUT THE ASSESSING OFFICER HAS DISALLOWED THE CLAIM ON T HE GROUND THAT THE ASSESSEE IN THE EARLIER YEAR, I.E., THE ASSESSMENT YEAR 2005-06 DID NOT EXERCISE OPTION WITHIN THE DUE DATE OF FILING OF RE TURN AS PER SECTION 139(1) OF THE INCOME-TAX ACT. THUS ON THE MERITS THERE IS NO DISPUTE ABOUT THE ENTITLEMENT OF THE ASSESSEE AT 80 PER CENT. OF DEPR ECIATION ON WIND MILL BUT DUE TO TECHNICAL DEFECT IN VIEW OF THE ASSESSING OF FICER THE ASSESSEE WAS DENIED THE SAID CLAIM. WHEN THERE IS NO SPECIFIC FO RM OR METHOD PRESCRIBED FOR EXERCISING THE SAID OPTION AS PER THE SECOND PR OVISO TO RULE 5(1A), THEN THE CLAIM MADE IN THE RETURN OF INCOME AS WELL AS R EFLECTED FROM THE BOOKS ITA NO.166 /MDS/2015 6 OF ACCOUNT AND AUDIT REPORT IS MORE THAN SUFFICIENT FOR EXERCISING THE OPTION AS REQUIRED UNDER THE SECOND PROVISO TO RULE 5(1A). IT IS AN UNDISPUTED FACT THAT THE ASSESSEE EXERCISED THE OPTION FOR THE ASSE SSMENT YEAR 2005-06 BUT THE RETURN WAS FILED AFTER THE DUE DATE OF FILING R ETURN AS PER SECTION 139(1) OF THE INCOME-TAX ACT. IT MAY BE AN ISSUE OF EXERCI SING THE OPTION AFTER DUE DATE FOR THE ASSESSMENT YEAR 2005-06 BUT IT CANNOT BE AN ISSUE IN DISPUTE FOR THE SUBSEQUENT YEAR. AS PER THE THIRD PROVISO T O RULE 5(1A) WHEN AN OPTION ONCE EXERCISED SHALL BE FINAL AND SHALL APPL Y TO ALL THE SUBSEQUENT ASSESSMENT YEARS ; THEN FOR THE SUBSEQUENT YEARS, T HERE IS NO REQUIREMENT OF EXERCISING ANY SEPARATE OPTION. ONCE THE ASSESSE E HAS EXERCISED HIS OPTION FOR THE ASSESSMENT YEAR 2005-06, THAT MAY BE BELATED FOR THAT ASSESSMENT YEAR BUT ONCE IT IS EXERCISED THEN THERE IS NO REQUIREMENT FOR FURTHER EXERCISING THE OPTION IN THE SUBSEQUENT YEA R. EVEN OTHERWISE THE OPTION EXERCISED FOR THE ASSESSMENT YEAR 2005- 06 B ECOMES FINAL AND APPLICABLE TO THE ASSESSMENT YEAR 2006-07, WHICH IS UNDER CONSIDERATION AND THE SAME IS WELL WITHIN TIME FOR THIS YEAR. 7. IN VIEW OF THE ABOVE DISCUSSION, WE HOLD THAT T HE ASSESSEE, FOR THE YEAR UNDER CONSIDERATION, HAS SATISFIED THE REQUIREMENT OF THE SECOND PROVISO TO RULE 5(1A) AND THEREFORE, IS ENTITLED TO DEPRECIATI ON ON WIND MILL AS PER APPENDIX I. THE LOWER AUTHORITIES HAVE NOT TAKEN A CORRECT VIEW ON THIS ISSUE. THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE QUA THIS ISSUE. ITA NO.166 /MDS/2015 7 SINCE THE ASSESSEE HAD CLAIMED HIGHER DEPRECIATION IN HER RETURN OF INCOME, THE DECISION OF THE CASE CITED BY THE LD. A .R. IS SQUARELY APPLICABLE TO THE CASE OF THE ASSESSEE. FURTHER, T HE DECISION OF THE HONBLE BOMBAY HIGH COURT ALSO SUPPORTS THE CLAIM O F THE ASSESSEE. THEREFORE WE DO NOT HAVE ANY HESITATION TO CONFIRM THE ORDER OF THE LD. CIT (A). HENCE, THE APPEAL OF REVENUE IS DEVOI D OF MERITS AND DESERVES TO BE DISMISSED. IT IS ORDERED ACCORDINGLY . 6. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. ORDER PRONOUNCED ON 19 TH JUNE, 2015 AT CHENNAI. SD/- SD/- ( . . . ) ( N.R.S.GANESAN ) ( . '#$ %' ) (A.MOHAN ALANKAMONY) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 19 TH JUNE, 2015. K S SUNDARAM. & (,/0 1 0#, /COPY TO: 1. $% /APPELLANT 2. ()$% /RESPONDENT 3. * 2, ( ) /CIT(A) 4. * 2, /CIT 5. 05 (,6! /DR 6. ' 7+ /GF