The DCIT, Central Circle, Vendra V. Sri Balaji Agro Oils Pvt. Ltd., Vijayawada

ITA 170/VIZ/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0624 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-07-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 12-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBRATA SARKAR
• Keywords: Depreciation
• Section: 139

Judgement Text

ITA NO.146/VIZAG/2010 SRIVASTHA POWER PROJECTS LTD., PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO.170/VIZAG/2010 ASSESSMENT YEAR: 2004-05 DCIT, CENTRAL CIRCLE VIJAYAWADA M/S. BALAJI AGRO OILS PVT LTD VIJAYAWADA (APPELLANT) VS. (RESPONDENT) PAN NO: AAACCB 9632L APPELLANT BY: SHRI SUBRATA SARKAR, DR RESPONDENT BY: SHRI G.V.N. HARI, CA ORDER PER SHRI B. R. BASKARAN, ACCOUNTANT MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 29-12- 2009 PASSED BY LEARNED CIT (A)-I, HYDERABAD AND IT RELATES TO THE ASSESSMENT YEAR 2004-05. 2. THE DISALLOWANCE OF DEPRECIATION OF RS.2.91 CROR ES MADE BY THE ASSESSING OFFICER BY INVOKING THE PROVISIONS OF RUL E 5(1A) OF THE INCOME TAX ACT RULES, HAVING BEEN DELETED BY LEARNED CIT (A), THE REVENUE IS IN APPEAL BEFORE US. 3. THE FACTS RELATING TO THE ISSUE ARE STATED IN BR IEF. THE ASSESSEE COMPANY IS ENGAGED, INTER ALIA, IN THE BUSINESS OF GENERATION OF POWER. IT FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2004-05 ON 28-10-2004, I.E. BEFORE THE DUE DATE FOR FILING THE RETURN AS P RESCRIBED U/S 139 (1) OF THE ACT. IT IS RELEVANT TO MENTION HERE THAT AS PER RU LE 5(1A) OF THE INCOME TAX RULES, IN THE CASE OF ASSETS OF AN UNDERTAKING ENGA GED IN GENERATION OR GENERATION AND DISTRIBUTION OF POWER, DEPRECIATION SHALL BE ALLOWED UNDER ITA NO.146/VIZAG/2010 SRIVASTHA POWER PROJECTS LTD., PAGE 2 OF 3 STRAIGHT LINE METHOD AT THE RATES SPECIFIED IN APPE NDIX IA OF THE INCOME TAX RULES. HOWEVER, UNDER SECOND PROVISO TO RULE 5(1A) , IT IS PROVIDED THAT THE ASSESSEE MAY OPT FOR DEDUCTION OF DEPRECIATION UNDE R WDV METHOD AT THE RATES SPECIFIED APPENDIX I OF THE INCOME TAX RULES, IF SUCH OPTION IS EXERCISED BEFORE THE DUE DATE FOR FILING RETURN OF INCOME U/S 139(1) OF THE ACT. 4. IN THE INSTANT CASE, THE ASSESSEE CLAIMED DE PRECIATION UNDER WDV METHOD ON THE ASSETS RELATING TO THE POWER GENERATI ON BUSINESS. THE DIFFERENCE BETWEEN DEPRECIATION CALCULATED AS PER A PPENDIX IA UNDER STRAIGHT LINE METHOD AND THE DEPRECIATION CALCULATE D UNDER WDV METHOD AS PER APPENDIX I WAS RS.2.91 CRORES, I.E. THE DEPREC IATION CALCULATED UNDER WDV METHOD WAS MORE BY RS.2.91 CRORES. AS STATED E ARLIER, THE ASSESSEE CLAIMED DEPRECIATION UNDER WDV METHOD AS PER THE RA TES SPECIFIED IN APPENDIX I OF THE RULES ON THE ASSETS RELATING TO T HE POWER GENERATION BUSINESS. HOWEVER, IT DID NOT FILE ANY SPECIFIC LE TTER FOR EXERCISING THE OPTION, STATED ABOVE. HENCE, THE ASSESSING OFFICER ALLOWED DEDUCTION OF DEPRECIATION ONLY TO THE EXTENT OF DEPRECIATION CAL CULATED UNDER STRAIGHT LINE METHOD AND IT HAS RESULTED IN AN ADDITION OF RS.2.9 1 CRORES. SINCE THE LEARNED CIT (A) DELETED THE SAID ADDITION, THE REVE NUE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE PARTIES AND CAREFULLY PERUSED THE RECORD. THE UNDISPUTED FACT IS THAT THE ASSESSEE HAD FILED THE RETURN OF INCOME ON 28.10.2004, I.E. BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME AS PRESCRIBED U/S 139(1) OF THE ACT. AS PER THE ANNUAL REPORT FILED BY THE ASSESSEE, IT HAS STARTED COMMERCIAL PRODUCTION ONLY IN JUNE, 2003, I.E. DURING THE YEAR UNDER CONSIDERATION AND HENCE IT IS THE FIRST YEAR IN WHICH THE ASSESSEE HAS TO EXERCISE ITS OPTION. THE LEARNE D AUTHORISED REPRESENTATIVE RELIED ON DECISION OF HON'BLEBLE PU NJAB & HARYANA HIGH COURT IN THE CASE OF CIT V JINDAL STEEL & POWER LTD ., (2009) 180 TAXMANN ITA NO.146/VIZAG/2010 SRIVASTHA POWER PROJECTS LTD., PAGE 3 OF 3 543 (P&H), WHEREIN IT HAS BEEN HELD THAT THE RETUR N OF INCOME FILED BEFORE THE DUE DATE SHALL AMOUNT TO EXERCISE OF OPTION AS REQUIRED UNDER SECOND PROVISO TO RULE 5(1A), SINCE THERE IS NO SPECIFIC FORM OR METHOD PRESCRIBED FOR EXERCISING THE OPTION. IN THE INSTANT CASE ALS O, THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE ASSESSEE HAS FILED ITS RETURN OF INCOME BEFORE THE DUE DATE AS PRESCRIBED UNDER SECTION 139(1) OF THE ACT. HENCE, RETURN OF INCOME SHALL SATISFY THE REQUIREMENT OF INTIMATION PRESCRIBED UNDER THE INCOME TAX RULES. ACCORDINGLY, WE DO NOT FIND ANY I NFIRMITY IN THE DECISION OF LEARNED CIT(A) AND ACCORDINGLY, WE UPHOLD HIS DE CISION. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. PRONOUNCED IN THE OPEN COURT ON 02-07-2010. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM, DATE:2 ND JULY, 2010 COPY TO 1 DCIT, CENTRAL CIRCLE, VIJAYAWADA 2 M/S. BALAJI AGRO OILS PVT. LTD., D.NO.L74-2-19, O LD CHECKPOST, PATAMATA, VIJAYAWADA 3 4. THE CIT (CENTRAL), HYDERABAD THE CIT(A)-I, HYDERABAD. 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM