RUGBY PHARMA P.LTD, MUMBAI V. DCIT 1(3), MUMBAI

ITA 1717/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8792 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 08-12-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 24-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

ITA NO.1717/M/2015 M/ S RUGBY PHARMA 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C ,MUMBAI BEFORE SHRI D.KARUNAKAR RAO, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.1717MUM/2015 FOR (ASSESSMENT YEAR : 2011-12) M/S RUGBY PHARMA PVT LTD, GROUND FLOOR, APEEJAY CHAMBER, WALLACE STREET, FORT, MUMBAI-400001 PAN: AABCR9843C VS. DY. COMMISSIONER OF INCOME TAX- 1(3),-1, MUMBAI (DCIT-1(3)-1) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. S.M. BANDI (AR) REVENUE BY : SH. SAURABH KUMAR RAI (DR) DATE OF HEARING : 08.12.2016 DATE OF PRONOUNCEMENT : 20.01.2017 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JM: 1. THE PRESENT APPEAL U/S 253 OF THE INCOME-TAX ACT FI LED BY ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX (AP PEALS)3, MUMBAI DATED 27.02.2015 FOR ASSESSMENT YEAR (AY) 2011-12. THE AS SESSEE HAS RAISED SINGLE GROUND OF APPEAL THAT THE LD CIT (A) ERRED IN CONFI RMING THE DISALLOWANCE OF DEPRECIATION OF RS.7,73,602 /- BEING 50% OF ELIGIBL E DEPRECIATION. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE COMPA NY IS ENGAGED IN MANUFACTURING OF PHARMACEUTICAL PRODUCTS. ASSESSEE FILED ITS RETURN OF INCOME FOR RELEVANT ASSESSMENT YEAR ON 29 TH SEPTEMBER 2011 DECLARING TOTAL INCOME AT RS. 1,04,04,597/-. THE ASSESSMENT WAS COMPLETED UNDER S ECTION 143(3) ON 25 TH FEBRUARY 2014. THE ASSESSING OFFICER WHILE PASSING ASSESSMENT ORDER BESIDES THE OTHER ADDITION AND DISALLOWANCE, DISALLOWED 50% OF THE CLAIM OF DEPRECIATION OUT OF RS. 15,47,204/-. ON APPEAL BEFORE COMMISSIONER (APPEALS) THE DISALLOWANCE ITA NO.1717/M/2015 M/ S RUGBY PHARMA 2 WAS SUSTAINED. AGGRIEVED BY THE ORDER OF COMMISSION ER (APPEALS) THE ASSESSEE FILED PRESENT APPEAL BEFORE US. 3. WE HAVE HEARD THE LEARNED AR FOR THE ASSESSEE AND T HE LEARNED DR FOR THE REVENUE AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE LD AR OF THE ASSESSEE ARGUED THAT THE LD COMMISSIONER (APPEALS) DISMISSED THE APPEAL OF THE ASSESSEE WITHOUT CONSIDERING THE DOCUMENTARY EVIDEN CE FILED BEFORE HIM, HOLDING THAT NO EVIDENCE WAS FILED BEFORE AO TO SHOW THAT T HE BUILDING HAD BEEN PUT TO USE AND THE MACHINE HAD BEEN INSTALLED. NO REMAND R EPORT WAS CALLED BY LD CIT(A) ON THE DOCUMENTARY EVIDENCE FILED BY ASSESSE E DURING THE APPELLATE PROCEEDINGS. ON THE OTHER HAND THE LD DR FOR THE REVENUE SUPPORTED THE ORDER OF AUTHORITIES BELOW. 4. WE HAVE CONSIDERED THE RIVAL CONTENTION OF THE LD R EPRESENTATIVES OF THE PARTIES AND THE MATERIAL AVAILABLE ON RECORD. THE AO WHILE MAKING DISALLOWANCE CONCLUDED THAT THE ASSESSEE HAS NOT FURNISHED ANY D OCUMENTARY EVIDENCE E.G. ELECTRICITY BILLS, MUNICIPAL BILLS ETC, IN RESPECT OF CONSTRUCTION CARRIED OUT. THE VERIFICATION OF THE BILLS FILED BY ASSESSEE REVEALS THAT ASSESSEE PURCHASED CERTAIN ASSET IN NOVEMBER 2010 AND IN THE FAG END OF THE MA RCH. THE ASSESSEE HAS NOT ESTABLISHED THAT THE BUILDING AND THE MACHINERY WER E PUT TO USE BEFORE 30 SEPTEMBER 2010 AND DISALLOWED 50% OF THE CLAIM OF D EPRECIATION. DURING THE FIRST APPELLATE PROCEEDING IT WAS CONTENDED ON BEHALF OF ASSESSEE THE ASSESSEE THE DETAILS OF PLANT AND MACHINERY ALONG WITH THE BILLS THEREOF WERE FURNISHED BEFORE AO, VIDE APPLICATION DATED 31 JANUARY 2014. THE COP IES OF ALL THOSE DOCUMENTS WERE AGAIN FURNISHED BEFORE THE FIRST APPELLATE AUT HORITY. THE LD COMMISSIONER (APPEALS) CONCLUDED THAT NO EVIDENCE HAS BEEN FILED BEFORE THE AO TO SHOW THAT THE BUILDING HAD BEEN PUT TO USE OR THAT MACHINERY HAD BASED INSTALLED AND DISMISSED THE APPEAL. WE HAVE SEEN THAT DESPITE REC ORDING THAT DETAILS HAVE BEEN FILED IN THE FORM OF PAPER BOOK THE LD CIT (A) NEIT HER CONSIDERED THE DOCUMENT FILED BEFORE HIM NOR SENT THOSE DOCUMENTS FOR SEEKI NG REMAND REPORT FROM THE AO. WE HAVE NOTICED THAT ORDER OF LD CIT(A) IS NOT IN O RDER AND NOT SUSTAINABLE IN THE EYES OF LAW. WE HAVE FURTHER NOTICED THAT THE ASSES SEE HAS PLACED ON RECORD ITA NO.1717/M/2015 M/ S RUGBY PHARMA 3 THE DETAILS OF ADDITIONS TO THE FIXED ASSET, ADDITI ON TO THE FACTORY BUILDING ALONG WITH COPY OF BILLS, DETAILS OF ADDITION TO THE COMP UTERS ALONG WITH COPY OF BILLS, DETAILS OF ADDITIONS TO THE PLANT AND MACHINERY ALO NG WITH COPY OF BILLS, DETAILS OF ADDITION TO THE AIR-CONDITIONER ALONG WITH COPY OF BILLS AND DETAILS OF FURNITURE AND FIXTURES ALONG WITH COPY OF BILLS THEREOF IN TH E FORM OF PAPER BOOK. THE LD AR FOR THE ASSESSEE HAS CERTIFIED THAT ALL THESE DOCUM ENTS WERE PLACED /FILED BEFORE THE AO AS WELL AS LD COMMISSIONER (APPEALS). CONSIDERIN G THE NUMEROUS DETAILS OF THE DOCUMENTS AND THE SUBMISSION MADE BY LD AR OF T HE ASSESSEE THAT THE LOWER AUTHORITIES FAILED TO APPRECIATE THE DOCUMENTARY EV IDENCE PLACED BEFORE THEM, WE DEEM IT APPROPRIATE TO RESTORE THIS GROUND OF APPEA L TO THE FILE OF AO TO RECONSIDER THE MATTER AFRESH AND PASS A SPEAKING ORDER IN ACCO RDANCE WITH LAW. NEEDLESS TO SAY THAT AO SHALL PROVIDE A PAUCITY OF HEARING TO T HE ASSESSEE BEFORE PASSING THE ORDER. 5. IN THE RESULT THE APPEAL FILED BY ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSE. ORDER ANNOUNCED IN OPEN COURT ON THIS 20 TH DAY OF JANUARY 2017. SD/- SD/- (D.KARUNAKAR RAO) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 20/01/2017 S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT.REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/