Appeal details
Counselvise Citation
[2016] 131 COUNSELVISE.COM (IT) 0535 (ITAT-PUNE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 1 month(s) 18 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
28-10-2016
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Assessment Year
2012-2013
Appeal Filed On
10-09-2014
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E , , !'!! # , $ % BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NO. 1705/PN/2014 $& ' !(' / ASSESSMENT YEAR : 2012-13 MENON AND MENON LIMITED, GUR MARKET YEARD, VIKRAMNAGAR, KOLHAPUR PAN : AABCM8804C ....... / APPELLANT )& / V/S. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 2, KOLHAPUR / RESPONDENT ASSESSEE BY : SHRI HARIDAS BHAT REVENUE BY : SHRI ANIL KUMAR CHAWARE / DATE OF HEARING : 06-10-2016 / DATE OF PRONOUNCEMENT : 28-10-2016 * / ORDER PER VIKAS AWASTHY, JM : THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE O RDER OF COMMISSIONER OF INCOME TAX (APPEALS), KOLHAPUR DATED 13-03- 2014 FOR THE ASSESSMENT YEAR 2012-13. IN APPEAL, THE ASSESSEE HAS ASSAILED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN DISALLOWING THE CLAIM O F 2 ITA NO. 1705/PN/2014, A.Y. 2012-13 HIGHER RATE OF DEPRECIATION ON ELECTRICAL INSTALLATIONS AND CIV IL WORK OF WINDMILL. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORD S ARE: THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF IRON CASTING AND GENERATION OF ELECTRICITY THROUGH WINDMILL. THE ASSESSE E CLAIMED DEPRECIATION @ 80% ON TOTAL COST OF WINDMILL I.E. ` 5,79,16,442/-. THE ASSESSING OFFICER DURING THE COURSE OF SCRUTINY ASSESSMEN T RESTRICTED THE DEPRECIATION TO 15% ON ELECTRICAL INSTALLATIONS AND 10% ON CIVIL WORK OF THE WINDMILL. FURTHER, THE ASSESSING OFFICER MADE DI SALLOWANCE OF ` 10,18,443/- ON ACCOUNT OF DELAY IN PAYMENT OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND U/S. 36(1)(VA) R.W.S. 2(24)(X) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). AGGRIEVED BY THE ASSESSMENT ORDER DATED 20-12-2013, T HE ASSESSEE PREFERRED APPEAL BEFORE THE COMMISSIONER OF INCO ME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) UPHELD TH E FINDINGS OF ASSESSING OFFICER AND REJECTED THE CONTENTIONS OF THE ASSESSEE. NOW, THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL. 3. SHRI HARIDAS BHAT APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED I N UPHOLDING THE FINDINGS OF ASSESSING OFFICER IN RESTRICTING THE DEPRECIATIO N ON ELECTRICAL INSTALLATIONS OF THE WINDMILL TO 15% AND CIVIL WORK TO 10%. IT HAS BEEN CONSISTENTLY HELD BY THE TRIBUNAL THAT ELECTRICA L INSTALLATION AND CIVIL WORK COMPRISING OF FOUNDATION OF WINDMILL ARE INTEGRAL P ART OF WINDMILL AND HENCE ELIGIBLE FOR DEPRECIATION @ 80%. IN SUPPORT OF HIS SUBMISSIONS, THE LD. AR PLACED RELIANCE ON THE DECISION OF HON 'BLE BOMBAY HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME T AX VS. COOPER FOUNDARY PVT. LTD. IN INCOME TAX APPEAL NO. 132 6 OF 2010 3 ITA NO. 1705/PN/2014, A.Y. 2012-13 DECIDED ON 14 TH JUNE, 2011 AND THE DECISION OF TRIBUNAL IN THE CASE OF ASSISTANT COMMISSIONER OF INCOME TAX VS. SUMA SHILPA LIMITED REPORTED AS 44 CCH 514 (PUNE-TRIB.). THE LD. AR SUBMITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED IN C ONFIRMING DISALLOWANCE OF ` 10,18,443/- ON ACCOUNT OF DELAY IN PAYMENT OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND. THE DUE DATE FOR DEPOSITING THE PROVIDENT FUND WAS 20 TH APRIL, 2012 INCLUDING GRACE PERIOD OF FIVE DAYS. THE ASSESSEE DEPOSITED THE AMOUNT ON 28 TH APRIL, 2012. UNDISPUTEDLY, THE AMOUNT WAS DEPOSITED BEFORE DUE DATE OF FILING OF RETURN OF INCOME. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. GHATGE PATIL TRANSPORTS LTD. REPORTED AS 368 ITR 749 HAS HELD THAT THE DEDUCTION O F PAYMENT OF EMPLOYEES CONTRIBUTION CANNOT BE DISALLOWED IN CASE CONTR IBUTION TO EMPLOYEES WELFARE FUNDS IS CREDITED ON OR BEFORE DUE DATE OF FILING OF RETURN OF INCOME. FURTHER, TO REINFORCE HIS ARGUMENT THE LD. AR PLACED RELIANCE ON THE DECISION OF CO-ORDINATE BENCH OF THE TRIBUN AL IN THE CASE OF INCOME TAX OFFICER VS. TIRUPATI IND. SERVICES PVT. LT D. IN ITA NO. 95/PN/2015 FOR ASSESSMENT YEAR 2011-12 DECIDED ON 10-02-201 6. 4. ON THE OTHER HAND SHRI ANIL KUMAR CHAWARE REPRESENT ING THE DEPARTMENT VEHEMENTLY SUPPORTED THE FINDINGS OF COMMISSIO NER OF INCOME TAX (APPEALS) AND PRAYED FOR DISMISSING THE APPEAL O F THE ASSESSEE. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. THE ASSESSEE IN APPEAL HAS RAISED ONLY TWO GROUNDS. THE GR OUND NO. 1 RAISED IN THE APPEAL RELATES TO CLAIM OF HIGHER RATE OF DEPR ECIATION I.E. 80% ON ELECTRICAL INSTALLATION AND CIVIL WORK OF THE WINDMILL. TH E 4 ITA NO. 1705/PN/2014, A.Y. 2012-13 ASSESSEE HAD CLAIMED DEPRECIATION @ 80% ON ELECTRICAL INSTA LLATION AMOUNTING TO ` 30,54,436/- AND THE COST OF CIVIL WORK FOR LAYING DOWN THE FOUNDATION OF WINDMILL TO THE TUNE OF ` 36,23,849/-. THE ASSESSING OFFICER RESTRICTED THE DEPRECIATION TO 15% AND 10% ON ELEC TRICAL INSTALLATION AND CIVIL WORK, RESPECTIVELY. 6. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF COMMISSIO NER OF INCOME TAX VS. COOPER FOUNDARY PVT. LTD. (SUPRA) HAS UP HELD THE DECISION OF TRIBUNAL IN HOLDING THAT RCC FOUNDATION FORMS INTE GRAL PART OF WINDMILL AND HENCE, DEPRECIATION @ 80% SHOULD BE ALLOWED ON THE SAME. THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF ASSISTANT COMMISSIONER OF INCOME TAX VS. SUMA SHILPA LIMITED (SUPRA) HA S HELD THAT CIVIL WORK AND ELECTRICAL INSTALLATION ARE SPECIFICALLY DE SIGNED FOR OPERATION OF WINDMILLS AND ARE INSEPARABLE FROM THE MAIN UNIT. THEREFORE, DEPRECIATION ON CIVIL STRUCTURES AND ELECTRICAL FIT TINGS HAS TO BE ALLOWED AT SAME RATE, AS IS AVAILABLE TO PRINCIPLE ASSET I.E . WINDMILL. THE TRIBUNAL HAS BEEN CONSISTENTLY HOLDING THAT ON ELECTR ICAL INSTALLATION AS WELL AS CIVIL CONSTRUCTION COMPRISING OF COMPLETE FOUNDATION OF WINDMILL ARE INTEGRAL PART OF WINDMILL AND HENCE E LIGIBLE FOR DEPRECIATION @ 80%. ACCORDINGLY, GROUND NO. 1 RAISED IN THE APPEAL BY THE ASSESSEE IS ALLOWED. 7. IN GROUND NO. 2 THE ASSESSEE HAS ASSAILED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN DISALLOWING THE DELAYE D PAYMENT OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND. UND ISPUTEDLY, THE AMOUNT OF ` 10,18,443/- HAS BEEN DEPOSITED BY THE ASSESSEE MUCH PRIOR TO THE DATE OF FILING OF RETURN OF INCOME UNDER THE PR OVISIONS OF INCOME TAX ACT. THE HON'BLE BOMBAY HIGH COURT IN THE C ASE OF COMMISSIONER OF INCOME TAX VS. GHATGE PATIL TRANSPORTS LT D. (SUPRA) 5 ITA NO. 1705/PN/2014, A.Y. 2012-13 HAS HELD THAT THE ASSESSEE IS ELIGIBLE TO CLAIM THE EXPENDIT URE WHERE THE EMPLOYEES CONTRIBUTION HAS BEEN MADE TO THE EMPLOYEES WELFARE FUND BEFORE DUE DATE OF FILING OF RETURN OF INCOME. THE HON' BLE JURISDICTIONAL HIGH COURT HAS FURTHER CLARIFIED THAT THE VIEW TAKEN BY THE HON'BLE SUPREME COURT OF INDIA IN THE CASE OF COMMISS IONER OF INCOME TAX VS. ALOM EXTRUSIONS LTD. REPORTED AS 319 ITR 306 APPLIES TO EMPLOYEES CONTRIBUTION AS WELL AS EMPLOYER CONTRIBUTION TO THE PROVIDENT FUND. THUS, IN VIEW OF THE FACTS OF THE CASE AND DECISION OF HON'BLE JURISDICTIONAL HIGH COURT, GROUND NO. 2 RAISED IN THE APPEAL BY ASSESSEE IS ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 28 TH DAY OF OCTOBER, 2016. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 28 TH OCTOBER, 2016 RK *+,$-.'/'(- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A), KOLHAPUR 4. ' / THE CIT-I/II, KOLHAPUR/CIT(CENTRAL), PUNE 5. !*+ %%,- , ,- , . /01 , / DR, ITAT, A BENCH, PUNE. 6. + 2 34 / GUARD FILE. // ! % // TRUE COPY// #5 / BY ORDER, %6 ,1 / PRIVATE SECRETARY, ,- , / ITAT, PUNE
