Addl.CIT, Special Range-3, New Delhi V. Escorts Heart Institute & Research Centre Ltd., New Delhi

ITA 185/DEL/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4833 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 10-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R M MEHTA
• Keywords: Depreciation; Set aside
• Section: 143(3); 22; 54; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B : NEW DELHI) (THROUGH VIDEO CONFERENCE ) BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.185/DEL./2019 ASSESSMENT YEAR : 2010-11 ADDL. CIT, VS. M/S. ESCORTS HEART INSTITUTE AND SPECIAL RANGE-3 RESEARCH CENTRE LTD. NEW DELHI OKHLA ROAD, OKHLA DELHI-110025 (PAN : AAACE8731F) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH.R.M.MEHTA, CA REVENUE BY : SH. MANIN DER KAUR, SR. DR DATE OF HEARING : 22.09.2021 DATE OF ORDER : 22.09.2021 O R D E R PER SANJAY GURG, JUDICIAL MEMBER : APPELLANT, ADDL. CIT, SPECIAL RANGE-3, NEW DELHI (HEREINAFTER REFERRED TO AS THE REVENUE), BY FILI NG THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 08.11.2018 PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS)- 34, NEW DELHI , QUA THE ASSESSMENT YEAR 2010-11 ON THE GROU NDS INTER ALIA THAT :- 1.WHETHER ON FACTS AND IN CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELET ING ITA NO.185 /DEL./2019 2 THE DISALLOWANCE OF EXCESSIVE DEPRECIATION OF RS. 1,47,53,950/- MADE BY THE ASSESSING OFFICER. 2. THE APPELLANT CRAVES, LEAVE, MODIFY, ADD OR FORE GO IN ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 2. THE REVENUE IN THIS APPEAL HAS AGITATED AGAINST THE ACTION OF THE CIT(A) IN SETTING ASIDE THE ORDER PASSED BY THE ASSESSING OFFICER U/S 154 OF THE INCOME TAX ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HOSPITAL CLAIMED DEPRECIATION @ 40% ON MEDICAL EQUIPMENTS WH ICH WAS ALLOWED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE INCOME TAX ACT VIDE ORDER DATED 2 0.03.2013. SUBSEQUENTLY, THE ASSESSING OFFICER PASSED A RECTIF ICATION ORDER U/S 154 OF THE INCOME TAX ACT DATED 28.11.2017 ALLOWING THE DEPRECIATION @ 15% ON MEDICAL EQUIPMENTS AS AGAINST 40% EARLIER ALLOWED BY HIM. THE ASSESSING OFFICER IN THIS RESPE CT OBSERVED THAT CERTAIN MEDICAL EQUIPMENTS WERE NOT LIFE SAVIN G EQUIPMENTS, THEREFORE, DEPRECIATION @ 40% WAS WRONGLY ALLOWED, WHICH WAS A MISTAKE APPARENT ON RECORD. HE ACCORDINGLY REVISE D THE RATE OF DEPRECIATION TO 15%. 4. IN APPEAL, THE LD. CIT(A) RELIED UPON THE DECISI ON OF THE ITAT IN THE CASE OF APPELLANT ITSELF FOR ASSESSMEN T YEAR 2003-04 IN ITA NO.185 /DEL./2019 3 ITA NO. 874/DEL/2014 DATED 28.12.2017 AND HELD THAT WHETHER THE DEPRECIATION WAS TO BE ALLOWED @ 15% OR 40% WAS A DEBATABLE ISSUE. THAT IT WAS NOT A CASE OF MISTAKE APPARENT O N RECORD AND IT REQUIRED EXAMINING OF NEW FACTS AND DELIBERATIONS T HEREUPON. RELEVANT PART OF THE ORDER OF THE CIT(A) IS REPRODU CED AS UNDER:- 5.3 IT IS CONTENDED BY THE APPELLANT THAT DEPREC IATION @ 40% HAD BEEN CLAIMED AND ALLOWED IN THE PRECEDING A ND SUCCEEDING AYS IN ASSESSMENTS FRAMED U/S 143(3) OF THE ACT. THE QUESTION OF RATE AT WHICH DEPRECIATION IS TO BE ALLOWED RAISES A DEBATE AND IS THEREFORE NOT AMENABLE TO TH E PROCEEDINGS FOR RECTIFICATION U/S 154 OF THE ACT. I T IS FURTHER SUBMITTED BY THE APPELLANT THAT THIS ISSUE IS ALSO COVERED IN FAVOUR OF THE APPELLANT BY THE ORDER OF HONBLE ITA T IN ITS OWN CASE FOR ASSESSMENT YEAR 2003-04 IN ITA NO. 874/DEL/2014 DATED 28.12.2017. APPELLANT HAS ALSO TAKEN A PLEA THAT THE QUESTION O F DEPRECIATION HAD BEEN EXAMINED BOTH BY THE AO IN OR IGINAL ASSESSMENT FRAMED U/S 143(3) AND THEREAFTER BY THE CIT(A). AS PER SUB-SECTION (1A) OF THE SECTION 154, THERE W AS A CLEAR BAR TO INVOKING THE SAID PROVISION IN RESPECT OF MA TTERS WHICH HAVE BEEN CONSIDERED AND DECIDED IN APPEAL. APPELLA NT HAS PLACED RELIANCE IN SUPPORT OF ITS CONTENTION ON DEC ISIONS OF VARIOUS HIGH COURTS. 5.4 I HAVE CONSIDERED THE ASSESSMENT ORDER, WRITTEN SUBMISSIONS AND ORAL ARGUMENTS OF THE APPELLANT. TH E ISSUE INVOLVED IN THE CASE OF THE APPELLANT OF CLAIM OF D EPRECIATION ON MEDICAL EQUIPMENT, ACCORDING TO AO, RATE OF DEPR ECIATION AS PER INCOME TAX ACT WAS 15% AND THEY DO NOT FALL UNDER THE CATEGORY OF LIFE SAVING EQUIPMENTS. APPELLANT H AS CLAIMED THE DEPRECIATION @ 40% TREATING THEM AS LIFE SAVING EQUIPMENTS. IN THE CASE OF THE APPELLANT, SIMILAR I SSUE OF DEPRECIATION CAME BEFORE HON'BLE ITAT, DELHI FOR AY 2003- 04. AFTER CONSIDERING THE FACTS OF THE CASE, HON'BLE ITAT IN ITA NO. 874/DEL/2014 DATED 28.12.2017, HELD THAT ALLOWING THE DEPRECIATION AT THE LESSER RATE IS A DEBATABLE ISSUE WHICH OUTSIDE THE PURVIEW OF PROVISION OF SECTION 154 OF THE ACT. IT WILL ALSO AMOUNT TO EXAMINING THE NEW FACTS WHICH W IIL NOT MAKE THE CORRECTION AS MISTAKE APPARENT FROM RECORD . IT IS FURTHER HELD BY THE HON'BLE ITAT THAT CLAIM OF DEPR ECIATION WAS NOT AT ALL EXAMINED IN ORIGINAL ASSESSMENT PROC EEDINGS BY THE ASSESSING OFFICER. THE HON'BLE SUPREME COURT IN THE CASE ITA NO.185 /DEL./2019 4 OF CIT VS HERO CYCLES LTD. 228 ITR 463 HAS HELD THA T THE POINT WHICH WAS NOT EXAMINED ON FACT OR LAW CANNOT BE DEALT AS MISTAKE APPARENT ON RECORD. HON'BLE ITAT HAS QUA SHED THE ORDER PASSED BY THE AO U/S 154 OF THE IT ACT. 5.5 CONSIDERING THE ABOVE FACTS AND FINDING OF THE HON'BLE ITAT IN THE CASE OF THE APPELLANT, RATE OF DEPRECIATION COULD NOT BE RECTIFIED BY INVOKING PRO VISIONS OF SECTION 154 OF THE ACT. IT IS A DEBATABLE ISSUE WHE THER MEDICAL EQUIPMENTS ARE COVERED IN LIFE SAVING DEVICES OR NO T AND ELIGIBLE FOR DEPRECIATION @ 40% OR @ 15%. MISTAKE I S NOT APPARENT FROM THE RECORD COULD NOT BE RECTIFIED U/S 154. MOREOVER, THIS ISSUE WAS NOT CONSIDERED BY THE AO A T THE TIME OF ORIGINAL ASSESSMENT PROCEEDINGS AND THEREFORE IT COULD NOT BE CONSIDERED THAT MISTAKE COULD BE RECTIFIED U/S 1 54 TREATING IT AS MISTAKE APPARENT FROM RECORD. KEEPING IN VIEW THE ABOVE FACTS, ADDITION MADE BY THE AO ON ACCOUNT OF DISALL OWANCE OF DEPRECIATION AT RS. 1,47,53,950/- IS NOT SUSTAINABL E AND IT IS HEREBY DELETED. 5.6 THIS GROUND OF THE APPEAL OF THE APPELLANT IS ALLOWED. 5. AFTER HEARING THE LD. REPRESENTATIVES OF THE PAR TIES, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF THE CIT(A) ON THIS ISSUE. IN OUR VIEW, THE LD. CIT(A) RIGHTLY HELD THAT THE ISSUE INVOLVED RELATING TO THE RATE OF DEPRECIATION WAS A DEBATABLE ISSUE WHICH REQUIRED EXAMINING OF FACTS A ND DELIBERATION THEREUPON. IT IS NOT A CASE OF ANY MI STAKE APPARENT ON RECORD. THERE IS NO MERIT IN THE APPEAL OF THE REVENUE AND THE SAME IS ACCORDINGLY DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 22 ND DAY OF SEPTEMBER, 2021. SD/- SD/- (ANIL CHATURVEDI) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 22 ND DAY OF SEPTEMBER, 2021 ITA NO.185 /DEL./2019 5 BINITA COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.