ACIT, Coimbatore V. M/s. Rajavae Textiles (P) Ltd., Coimbatore

ITA 1771/CHNY/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0833 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 12-02-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 26-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: N VIJAYAKUMAR
• Keywords: Depreciation
• Section: 143(3); 115JB

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL B BENCH, CHENNAI. BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT & SHRI S.S. GODARA, JUDICIAL MEMBER I.T.A. NO.1771/MDS/2012 ASSESSMENT YEAR : 2004-05 THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE I(2), 63, RACE COURSE, COIMBATORE 641 018. VS. M/S. RAJAVE TEXTILES (P) LTD., RUKMANI NAGAR, RAMANATHAPURAM, COIMBATORE 641 045. [PAN:AABCR0295A] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI GURU BASHYAM, JCIT RESPONDENT BY : SHRI N. VIJAYAKUMAR, C.A. DATE OF HEARING : 1 2 . 0 2 .201 3 DATE OF PRONOUNCEMENT : 12.02.2013 ORDER PER S.S. GODARA, JUDICIAL MEMBER THIS REVENUES APPEAL IS DIRECTED AGAINST THE ORDE R OF THE COMMISSIONER OF INCOME TAX (APPEALS) I, COIMBATORE DATED 05.07.2012 IN ITA NO. 136/11-12 FOR THE ASSESSMENT YEAR 2004-05 I N PROCEEDINGS UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT 196 1 [IN SHORT THE ACT]. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING OF COTTON YARN AND PO WER GENERATION THROUGH RENEWAL ENERGY DEVICE I.E. WINDMILL USED FOR CAPTIV E POWER CONSUMPTION. I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.17 1717 1771 7171 71/M/ /M/ /M/ /M/1 11 12 22 2 2 3. ON 30.10.2004, THE ASSESSEE HAD FILED ITS RETU RN DECLARING INCOME OF ` .22,58,390/- UNDER NORMAL COMPUTATION AND ` .67,270/- UNDER SECTION 115JB OF THE ACT. THEREAFTER, THE ASSESSING OFFICER COM PLETED REGULAR ASSESSMENT ON 22.11.2006 UNDER SECTION 143(3) OF THE ACT ASS ESSING TOTAL INCOME OF THE ASSESSEE AS ` .23,81,400/-. 4. THEREAFTER, THE ASSESSING OFFICER ISSUED REOPEN ING NOTICE TO THE ASSESSEE DATED 07.03.2011 FOR THE REASON THAT IN IT S DEPRECIATION SCHEDULE, IT HAD CLAIMED DEPRECIATION @ 80% [40% FOR HALF YEA R] ON WINDMILLS PURCHASED @ ` .1,31,84,766/-. PER ASSESSING OFFICER, THE SAME AMO UNTED TO EXCESS DEPRECIATION CLAIMED. FURTHER, IN THE OPINIO N OF THE ASSESSING OFFICER, THE EXPENDITURE INCURRED BY THE ASSESSEE TO RAISE T HE AUTHORIZED CAPITAL, IF ANY, DEBITED TO PROFIT AND LOSS ACCOUNT WAS ALSO NO T ALLOWABLE IN VIEW OF THE CASE LAW OF BROOKE BOND LTD. V. CIT 225 ITR 798 (SC ). 5. IN RESPONSE TO THE AFORESAID NOTICE, THE ASSESS EE PUT IN APPEARANCE AND DEFENDED ITS CLAIM OF DEPRECIATION QUA THE WIND MILLS IN QUESTION. HOWEVER, THE ASSESSING OFFICER WAS NOT CONVINCED. T HEREFORE, IN THE REASSESSMENT FINALIZED ON 29.11.2011, HE DISALLOWED THE EXCESS DEPRECIATION PERTAINING TO WINDMILLS OF ` .47,66,948/- AND ALSO DISALLOWED FILING FEES PAID BY THE ASSESSEE TO THE REGISTRAR O F COMPANIES OF ` .50,500/-. I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.17 1717 1771 7171 71/M/ /M/ /M/ /M/1 11 12 22 2 3 6. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A) CHALLENGING DISALLOWANCE QUA DEPRECIATION OF THE WI NDMILLS IN QUESTION. WE NOTICE THAT IN THE ORDER UNDER CHALLENGE, THE CIT(A ) HAS RELIED ON THE CASE LAW OF KKSK LEATHER PROCESSORS PRIVATE LIMITED VS. ITO [2010] 126 ITD 215 (CHENNAI) AND HELD THAT THE ASSESSEE IS ELIGIBLE FO R DEPRECIATION ON WINDMILLS @ 80%. THEREFORE, THE REVENUE IS IN APPEAL. 7. REITERATING THE GROUNDS RAISED, THE DR WOULD CO NTEND THAT THE CIT(A) HAS WRONGLY HELD THAT THE ASSESSEE IS ENTITLED FOR DEPRECIATION REGARDING WINDMILLS @ 80% ON THE ANALOGY THAT THE CLAIM MADE IN THE RETURN OF INCOME FILED WITHIN THE DUE DATE OF FILING IS SUFFI CIENT FOR EXERCISING THE OPTION AS REQUIRED UNDER 2 ND PROVISO OF RULE 5(1A) OF THE INCOME TAX RULES. ACCORDINGLY, HE PRAYS FOR ACCEPTANCE OF THE APPEAL. 8. PER CONTRA, THE ASSESSEE STRONGLY SUPPORTS THE ORDER OF THE CIT(A) AND PRAYS FOR REJECTION OF THE APPEAL. 9. WE HAVE HEARD BOTH PARTIES AT LENGTH AND ALSO P ERUSED HE FINDINGS OF THE ASSESSING OFFICER, CIT(A) AS WELL AS CASE LAW R EFERRED TO BY THE CIT(A). THE PRECISE ISSUE WHICH ARISES FOR OUR CONSIDERATIO N IS AS TO WHETHER THE WINDMILL INSTALLED BY THE ASSESSEE IS ELIGIBLE FOR DEPRECIATION @ 80% OR NOT. ADMITTEDLY, IN THE CASE LAW OF KKSK LEATHER PROCESS ORS PRIVATE LIMITED I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.17 1717 1771 7171 71/M/ /M/ /M/ /M/1 11 12 22 2 4 (SUPRA) THE COORDINATE BENCH ABOVE SAID HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. ON THIS, THE ARGUMENT OF THE REVENUE IS THAT THE SAID ORDER HAS NOT BEEN ACCEPTED AND IT HAS PREFERRED TAX CASE APPEAL BEFORE THE HONBLE JURISDICTIONAL HIGH COURT. THIS, IN OUR OPI NION, IT DOES NOT FORM A VALID GROUND SO AS TO TAKE A DIFFERENT VIEW AND THAT TOO WITHOUT ANY DISTINGUISHING FEATURES POINTED OUT BY THE REVENUE. THEREFORE, WE HOLD THAT THE CIT(A) HAS RIGHTLY ACCEPTED THE CLAIM MADE BY THE ASSESSEE QUA DEPRECIATION @ 80% PERTAINING TO THE WINDMILLS IN QUESTION. 10. AS A SEQUEL TO OUR ABOVE DISCUSSIONS, THE ORDE R OF THE CIT(A) UNDER CHALLENGE IS UPHELD AND REVENUES APPEAL IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON TUESDAY, THE 12 TH OF FEBRUARY, 2013 AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) VICE-PRESIDENT (S.S. GODARA) JUDICIAL MEMBER CHENNAI, DATED, THE 12.02.2013 VM/- TO: THE ASSESSEE//A.O./CIT(A)/CIT/D.R.