ACIT, Coimbatore V. Mr. Ramanujam, Coimbatore

ITA 1905/CHNY/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61001 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 24-04-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 28-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR YOGESH KAMAT
• Assessee Lawyers: S SRIDHAR
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER I.T.A. NO. 1905/MDS/2011 (ASSESSMENT YEAR : 2005-06) THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE I(2), 63-A, RACE COURSE ROAD, COIMBATORE 641 018. (APPELLANT) V. SHRI M.R. RAMANUJAM, NO.9, SIVA NAGAR, UPPILIPALAYAM ROAD, COIMBATORE 641 045. PAN : ABUPR0655D (RESPONDENT) APPELLANT BY : DR. YOGESH KAMAT, SR. DR RESPONDENT BY : SHRI S. SRIDHAR, ADVOCAT E DATE OF HEARING : 24.04.2012 DATE OF PRONOUNCEMENT : 24.04.2012 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE REVENUE, ITS GRIEVANCE IS THAT THE CIT(APPEALS) DIRECTED ALLOWANCE OF HIGHER RATE OF D EPRECIATION ON WINDMILLS FOLLOWING RULE 5(1A) OF INCOME-TAX RULES, 1962 (IN SHORT THE RULES). 2. ASSESSEE HAD CLAIMED DEPRECIATION AT THE RATE OF 80% ON A WINDMILL. THE WINDMILL WAS AN ADDITION TO THE ASSE TS DURING THE RELEVANT PREVIOUS YEAR. ASSESSING OFFICER RESTRICTED THE CL AIM OF DEPRECIATION TO 7.69% FOR A REASON THAT ASSESSEE HAD NOT EXERCISED THE OPTION FOR 2 I.T.A. NO. 1905/MDS/11 CLAIMING HIGHER RATE OF DEPRECIATION BEFORE THE DAT E OF FILING OF RETURN AS REQUIRED UNDER PROVISO TO RULE 5(1A). 3. AGGRIEVED BY THIS, ASSESSEE MOVED IN APPEAL BEFO RE LD. CIT(APPEALS). AS PER THE ASSESSEE, THERE WAS NO SE PARATE FORM FOR EXERCISING AN OPTION AND RETURN HAVING BEEN FILED B EFORE DUE DATE CLAIMING HIGHER RATE OF DEPRECIATION, THIS HAD TO B E CONSIDERED AS THE OPTION EXERCISED BY THE ASSESSEE. ASSESSEE RELIED ON THE DECISION OF CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF K .K.S.K. LEATHER PROCESSORS (P) LTD. V. ITO (126 ITD 215). LD. CIT (APPEALS) WAS OF THE OPINION THAT THERE BEING NO SEPARATE FORM FOR OPTIN G FOR HIGHER RATE OF DEPRECIATION, THE RETURN FILED BY THE ASSESSEE BEFO RE THE DUE DATE SUFFICED THE PURPOSE. FOR THIS HE RELIED ON THE DE CISION OF CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF K.K.S.K. LEAT HER PROCESSORS (P) LTD. (SUPRA). AS PER THE LD. CIT(APPEALS), AN OPTI ON ONCE EXERCISE WAS FINAL AND IN THE EARLIER YEAR ITSELF, ASSESSEE WAS ALLOWED 80% DEPRECIATION CONSIDERING THE RETURN OF INCOME. HE, THEREFORE, DIRECTED THE A.O. TO ALLOW DEPRECIATION AT THE RATE OF 80%. 4. NOW BEFORE US, STRONGLY ASSAILING THE ORDER OF L D. CIT(APPEALS), LEARNED D.R. SUBMITTED THAT RETURN FILED COULD NOT BE CONSIDERED AS AN OPTION, AND RULE 5(1A) STATED THAT AN OPTION HAD TO BE SPECIFICALLY EXERCISED. THIS HAD TO BE FOLLOWED IN LETTER AND S PIRIT BY THE ASSESSEE. 3 I.T.A. NO. 1905/MDS/11 ASSESSEE HAVING NOT DONE SO, A.O. COULD ALLOW DEPRE CIATION ONLY AT A LOWER RATE. 5. PER CONTRA, LEARNED A.R. SUPPORTED THE ORDER OF LD. CIT(APPEALS). 6. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. THE QUESTION WHETHER RETURN FILED CAN BE CONSIDERED AS AN OPTION UNDER RULE 5(1A) OF THE RULES, ENTITLING AN ASSESSEE FOR CLAIMING HIGHER RATE OF DEPRECIATION, IN OUR OPINION, STANDS ANSWERED IN FA VOUR OF THE ASSESSEE BY A DECISION CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF K.K.S.K. LEATHER PROCESSORS (P) LTD. (SUPRA). NO ORDER OF A NY HIGHER AUTHORITY WAS BROUGHT TO OUR NOTICE BY THE LEARNED D.R. TO TA KE A DIFFERENT VIEW. LD. CIT(APPEALS) WAS, THEREFORE, JUSTIFIED IN FOLLO WING THE DECISION OF CO- ORDINATE BENCH OF THIS TRIBUNAL AND DIRECTING THE A .O. TO ALLOW THE ASSESSEE DEPRECIATION AT HIGHER RATE. WE DO NOT FI ND ANY REASON TO INTERFERE. 7. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON 24 TH APRIL, 2012. SD/- SD/- (CHALLA NAGENDRA PRASAD) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 24 TH APRIL, 2012. KRI. 4 I.T.A. NO. 1905/MDS/11 COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A)-I, COIMBATORE (4) CIT-I, COIMBATORE (5) D.R. (6) GUARD FILE