ACIT, New Delhi V. The FNB Solutions, New Delhi

ITA 1761/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3120 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2018
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2012-2013
• Appeal Filed On: 04-04-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S R SENAPATI
• Keywords: Depreciation; Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E, NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER AND SMT. BEENA A. PILLAI, JUDICIAL MEMBER ITA NO.1761/DEL/2016 ASSESSMENT YEAR : 2012-13 ACIT, CIRCLE- 41(1), NEW DELHI. VS. THE FNB SOLUTIONS, 20A, POCKET- II, PASCHIM PURI, NEW DELHI. PAN : AAGFT8852K (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI S. R. SENAPATI, SR.DR ASSESSEE BY : SHRI R. S. SINGHVI, CA DATE OF HEARING : 22-02-2018 DATE OF PRONOUNCEMENT : 28-02-2018 O R D E R PER R. K. PANDA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER DATED 01.01.2016 OF THE CIT(A)- 14, NEW DELHI RELATING TO ASSESSMENT YEAR 2012-13. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF HIRING OF CROCKERY, GLAS S ITEMS AND UTENSILS AND OTHER ITEMS. IT FILED ITS RETURN OF INCOME ON 01.04.2013 DECLARING TOTAL INCOME OF RS.23,20,706/-. DURING THE COURSE OF ASSESSMENT PR OCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS CLAIMED 100% DEPRECIATION ON CROCKERY, GLASS, METAL, PLASTIC ITEMS AND UTENSILS BASED ON A SELF CREATED LOGIC WHICH DOES NOT FIND ANY CONGRUENCE WITH THE PROVISIONS OF DEPR ECIATION AS PER THE INCOME TAX ACT. HE OBSERVED THAT IN SOME OF THE ITEMS, TH E ASSESSEES DEPRECIATION RATE 2 ITA NO.1761/DEL/2016 IS OF 60% ON CROCKERY, UTENSILS AND STEEL ITEMS. T HE ASSESSING OFFICER TREATED THE CROCKERY, UTENSILS AND STEEL ITEMS ETC AS PLANT AND MACHINERY AND ALLOWED DEPRECIATION AT THE RATE OF 15% AND ACCORDINGLY MAD E ADDITION OF RS.49,06,105/-. 3. IN APPEAL, THE LD. CIT(A) DELETED THE ADDITION O F RS.49,06,105/- MADE BY THE ASSESSING OFFICER. 4. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 5. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE LD. CIT (A) AND PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED TH E VARIOUS DECISIONS CITED BEFORE US. WE FIND THE ASSESSEE HAS CLAIMED 60% DE PRECIATION ON GLASS ITEMS AND CROCKERY, GLASS AND METALS AND UTENSILS. WE FI ND THE ASSESSING OFFICER ALLOWED 15% DEPRECIATION AND THEREBY RESTRICTED THE DEPRECIATION TO RS.1635367/- AGAINST RS.65,41,472/- CLAIMED BY THE ASSESSEE AND MADE ADDITION OF RS.49,06,105/-. WE FIND THE LD. CIT(A) DELETED THE DISALLOWANCE SO MADE BY THE ASSESSING OFFICER. AS MENTIONED EARLIER, THE A SSESSEE IS ENGAGED IN THE BUSINESS OF HIRING OF CROCKERY, GLASS AND UTENSILS ITEMS AND OTHER ITEMS. WHILE GLASS ITEMS ARE BREAKABLE AND ITS LIFE IS ALSO NORM ALLY VERY LESS WHEREAS THE UTENSILS HAVE A LONG LIFE. FURTHER, IN A CASE LIKE THAT OF THE ASSESSEE SUCH UTENSILS ARE TO BE TREATED AS PLANT AND MACHINERY AS PRESCRI BED IN THE I.T. RULES AND 3 ITA NO.1761/DEL/2016 DEPRECIATION HAS TO BE APPLIED AS PER THE PRESCRIBE D RATE AND NO QUESTION OF 60% DEPRECIATION ON THE SAME. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE AND IN THE INTEREST OF JUSTICE, WE DEEM IT PROPER TO RESTO RE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO ALLOW 100% DE PRECIATION ON GLASS AND CROCKERY ITEMS AND AT THE PRESCRIBED RATE FOR OTHER ITEMS. THE ASSESSING OFFICER SHALL DECIDE THE ISSUE AS PER FACT AND LAW AFTER GI VING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE GROUNDS RAISED BY THE R EVENUE ARE ACCORDINGLY PARTLY ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 TH FEBRUARY, 2018. SD/- SD/- (BEENA A. PILLAI) (R. K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 28-02-2018. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI