NANAVATI CHEMEX P.LTD, MUMBAI V. ITO 2(2)(3, MUMBAI

ITA 1797/MUM/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3105 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 28-03-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 04-03-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST DATED PASSED
• Keywords: Depreciation
• Section: 142(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI . . , , ! '#, $ , % BEFORE SHRI B.R.BASKARAN, AM AND SHRI AMARJIT SINGH , JM / I.T.A. NO.1797/MUM/2011 ( $ & '& / ASSESSMENT YEAR: 2007-08) NANAVATI CHEMEX PRIVATE LTD. NANAVATI MAHALAYA, 18, HOMI MODY STREET, MUMBAI - 400023 / VS. INCOME TAX OFFICER 2(2)(3), AAYAKAR BHAVAN, M.K.MARG, MUMBAI ./ ./ PAN/GIR NO. : AAACK5171D ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 28.03.2016 !' /DATE OF PRONOUNCEMENT: 17.06.2016 #$ / O R D E R PER AMARJIT SINGH, JM: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 02.12.2010 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEAL) 5, MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] R ELEVANT TO THE A.Y.2007-08. ASSESSEE BY: SHRI PANKAJ JAIN DEPARTMENT BY: SHRI S. SENTHIL KUMARAN ITA NO.1797/MUM/11 A.Y.2007-08 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED THE RETURN OF INCOME DECLARING TOTAL LOSS TO THE TUNE OF RS.1, 15,020/- ON 31.10.2007. THE RETURN OF WAS PROCESSED U/S.143(1) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT) ON 24.10.2008. THE CASE WAS SELECTED FOR SCRUTINY BY ISSUANCE OF NOTICE U/S.143 (2) OF THE ACT DATED 18.08.2008 WHICH WAS SERVED UPON ASSESSEE. NOTICE S U/S.143(2) AND 142(1) OF THE ACT WERE ALSO ISSUED AND SERVED UPON THE ASSESSEE. THE ASSESSEE CLAIMED DEPRECIATION OF RS.2,99,148/- ON T HE PLANT AND MACHINERY AND FACTORY SHED. HOWEVER, ON PERUSAL OF THE ASSESSEES PROFIT AND LOSS ACCOUNT, IT WAS OBSERVED THAT THE O NLY CREDIT WAS ON ACCOUNT OF COMMISSION OF RS.2,04,615/-. THERE WAS NO OTHER CREDIT TO THE PROFIT & LOSS ACCOUNT TO SHOW THE ASSESSEES IN VOLVEMENT IN MANUFACTURING ACTIVITY. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE PLANT & MACHINERY AND FACTORY SHED WERE FOR MAN UFACTURING PURPOSE. THEREFORE, THE CLAIM OF THE ASSESSEE FOR DEPRECIATION TO THE TUNE OF RS.2,99,148/- WAS DISALLOWED, THEREAFTER IN APPEAL THE CIT(A) CONFIRMED THE SAID DISALLOWANCE. FEELING AGGRIEVED THE ASSESSEE FILED THE PRESENT APPEAL BEFORE US. 3. WE HAVE HEARD THE ARGUMENTS ADVANCED BY THE LEAR NED REPRESENTATIVE OF THE PARTIES AND HAVE GONE THROUGH THE RECORD CAREFULLY. THE SOLE POINT WHICH HAS BEEN RAISED B Y THE ASSESSEE IS IN CONNECTION WITH THE CONFIRMATION OF DISALLOWANCE BY THE CIT(A) WITH REGARD TO HIS CLAIM ON DEPRECIATION OF RS.2,99,148/ -. THE LEARNED ITA NO.1797/MUM/11 A.Y.2007-08 3 REPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT SINC E THE RELATIVE ASSET HAS ENTERED THE BLOCK THEREFORE THE CLAIM OF THE DE PRECATION IS REQUIRED TO BE ALLOWED IN THE INTEREST OF JUSTICE. IN SUPPO RT OF THIS CONTENTION OF THE LEARNED REPRESENTATIVE OF THE ASSESSEE HAS PLAC ED RELIANCE ON THE LAW SETTLED IN COMMISSIONER OF INCOME TAX -7 VS. M/ S. SONIC BIOCHEM EXTRACTIONS PVT. LTD. DECIDED BY THE BOMBAY HIGH COURT ON 17.11.2015 AND [2005] 142 TAXMAN 316 HONBLE HIGH C OURT OF KERALA IN CASE OF COMMISSIONER OF INCOME TAX VS. TRAVANCOR E CHEMICALS & MFG. CO. LTD. THE FACTS OF THE CASE RELIED BY THE REPRESENTATIVE OF THE ASSESSEE IS QUITE DIFFERENT FROM THE PRESENT CASE. THE LAW RELIED BY THE ASSESSEE SPEAKS ABOUT THE RUNNING OF BUSINESS WHERE ONE PARTICULAR MACHINERY WAS NOT USED IN THE RELEVANT ASSESSMENT Y EAR. WHEREAS IN THE INSTANT CASE THE BUSINESS OF THE ASSESSEE IS N OT RUNNING FROM THE RELEVANT ASSESSMENT YEAR AND PLANT AND MACHINERY WE RE NOT PUT TO USE FOR BUSINESS PURPOSE. HERE IT IS NECESSARY TO ADVE RT THE FINDING OF THE ASSESSMENT ORDER ON RECORD:- 3. THE ASSESSEE HAS CLAIMED DEPRECIATION OF RS.2,9 9,148/- ON THE PLANT & MACHINERY AND FACTORY SHED. HOWEVER , ON PERUSAL OF THE ASSESSEES P & L ACCOUNT, IT IS S EEN THAT THE ONLY CREDIT IS ON ACCOUNT OF COMMISSION OF RS.2,04,615/-. THERE IS NO OTHER CREDIT TO THE P & L ACCOUNT TO SHOW THE ASSESEES INVOLVEMENT IN MANUFACTURING ACTIVITY. THEREFORE, IT IS OBVIOUS T HAT THE ITA NO.1797/MUM/11 A.Y.2007-08 4 PLANT & MACHINERY AND FACTORY SHED HAVE NOT BEEN PU T TO USE FOR MANUFACTURING PURPOSE. THEREFORE, FOR WANT OF FULFILLMENT OF BASIC CONDITION OF USE OF ASSET BEIN G PLANT & MACHINERY AND FACTORY SHED, FOR THE PURPOSE OF BUSINESS, ASSESSEES CLAIM FOR DEPRECIATION OF RS.2,99,148/- STANDS DISALLOWED. EVEN THE ASSESSEE S REPRESENTATIVE HAS CONCURRED WITH THIS INFERENCE. 3.1 NO DOUBT THE SAID FINDING WAS AFFIRMED BY THE C IT(A) ON THE SAME GROUND THAT IN THE ASSESSEES CASE THE ENTIRE BLOCK OF ASSET WAS NOT PUT TO USE DURING THE YEAR. ACCORDINGLY IT IS NOT THE QUESTION OF INDIVIDUAL ASSET BEING USED OR NOT. 4. THE FINDING GIVEN BY THE CIT(A) IS QUITE JUSTIFI ABLE AND IN ACCORDANCE WITH LAW. NO DISTINGUISHABLE FACTS HAVE BEEN PRODUCED BEFORE US TO CONTRADICT THE FINDING OF THE CIT(A). AT THE TIME OF COST OF REPETITION IT IS CLARIFIED THAT THE LAW RELIED B Y THE LEARNED REPRESENTATIVE OF THE ASSESSEE NOWHERE IDENTICAL TO THE FACTS OF THE PRESENT CASE, THEREFORE, THE FINDING NO GROUND TO I NTERFERE WITH AT THIS APPELLATE STAGE. 5. ACCORDINGLY THE APPEAL FILED BY THE ASSESSEE IS HEREBY DISMISSED. ITA NO.1797/MUM/11 A.Y.2007-08 5 ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH JUNE , 2016. SD/- SD/- (B.R.BASKARAN) (AMARJIT SINGH) # / ACCOUNTANT MEMBER %& # /JUDICIAL MEMBER ' ( MUMBAI; )# DATED : 17 TH JUNE, 2016 MP MP MP MP ) * +$!', -,'! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. * ( ) / THE CIT(A)- 4. * / CIT 5. -./ &&01 , 01' , ' ( / DR, ITAT, MUMBAI 6. /34 5 / GUARD FILE. ) / BY ORDER, - & //TRUE COPY// ./# /(DY./ASSTT. REGISTRAR) , ' ( / ITAT, MUMBAI