ACIT, Coimbatore V. Sakthi Finance Limited, Coimbatore

ITA 197/CHNY/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4676 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-05-2017
• Appeal Filed By: Department
• Bench Allotted: D
• Next Hearing Date: 14-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 20-01-2017
• Court: TRIBUNAL
• Department Lawyers: DURAI PANDIAN
• Keywords: Depreciation
• Section: 32

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI , ! ' ! # . $ % &' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO.197/MDS./2017 / ASSESSMENT YEAR :2009-10 THE ACIT, CORPORATE CIRCLE-1, 63-A,RACE COURSE ROAD, COIMBATORE. VS. M/S.SAKTHI FINANCE LIMITED , 484,KAMRAJ ROAD, UPPILIPALAYAM, COIMBATORE. [PAN AADCS 0656 G ] ( () / APPELLANT) ( *+() /RESPONDENT) / APPELLANT BY : MR.DURAI PANDIAN, JCIT, D.R /RESPONDENT BY : MR.VIKRAM VIJAYARAGHAVAN, ADVOCATE / DATE OF HEARING : 14.03.2017 / DATE OF PRONOUNCEMENT : 01.05.2017 , / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-1, COIMBA TORE DATED 26.10.2016 PERTAINING TO ASSESSMENT YEAR 2009-10. ITA NO.197/MDS./2017 :- 2 -: 2. THE REVENUE RAISED THE GROUNDS THAT THE LD.CIT( A) ERRED IN CONSIDERING THE FACT THAT THE ASSESSEE EVEN THOUGH IN POSSESSION OF THE WINDMILLS IS NOT THE ACTUAL OWNER OF THE SAME A ND IS NOT ELIGIBLE FOR DEPRECIATION. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAS PURCHASED WINDMILLS FROM M/S.GRAHASAKTHI INFRA SERVICES PVT L TD., BY A SLUMP SALE DEED DATED 31.03.2009 AND CLAIMED DEPRECIATION THEREON. THE AO DISALLOWED THE DEPRECIATION ON THE GROUND THAT THE NAME OF THE ASSESSEE WAS NOT REGISTERED WITH TANGEDCO. THEREFO RE, THE ASSESSEE IS NOT THE OWNER OF THE WIND MILL. THE ASSESSEE CAR RIED THE APPEAL BEFORE THE LD.CIT(A). ON APPEAL, LD.CIT(A) OBSERVED THAT SINCE THE ASSESSEE HAS GIVEN THE POSSESSION OF THE WORKING WI NDMILLS AS ON 31.03.2009 ITSELF AND THE TRANSFER OF SERVICE OWNER SHIP WITH TNEB BEING A TECHNICAL FORMALITY. THE LD.CIT(A) , RELYIN G ON THE DECISIONS OF THE HONBLE SUPREME COURT IN THE CASE OF MYSORE MI NDERALS LTD. VS. CIT IN (1999) 106 TAXMAN 166(SC) AND OF THE CHENNAI TRIBUNAL IN THE CASE OF ACIT VS. BAGHMAR FINANCE LTD. IN [2012] 20 TAXMANN.COM 360 (CHENNAI), ALLOWED THE CLAIM OF ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), THE REVENUE IS IN APPEAL BEFORE US. ITA NO.197/MDS./2017 :- 3 -: 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. ACCORDING TO LD.D.R, RELIANCE PLACED BY TH E LD.CIT(A) ON THE ABOVE JUDGEMENTS IS MISPLACED AND HAVING NO SIMILAR ITY TO THE ISSUE OF DEPRECIATION IN ASSESSEES CASE. IN THIS CASE, THE ASSESSEE PURCHASED THE WINDMILL THROUGH SLUMP SALE DEED DATED 31.03.2 009 AND BEING SO, THE OWNERSHIP OF THE WINDMILL CANNOT BE DOUBTED. LD .D.R ALREADY PUT ARGUMENT THAT THE ASSESSEE HAS NOT USED THE WIND MI LL FOR THE PURPOSE OF BUSINESS IN THE ASSESSMENT YEAR UNDER CONSIDERAT ION. IN OUR OPINION, ASHELD BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. HEERA FINANCIAL SERVICES LTD. IN [2008] 298 ITR 245 (MAD) WHEREIN HELD THAT:- DISMISSING THE APPEAL, THAT THE FILM ROLLS LEASED OUT COULD NOT BE USED BY THE LESSEE, EVEN THOUGH KEPT READY F OR USE, ON ACCOUNT OF STRIKE IN THE FILM INDUSTRY. THEREFOR E, THE FILM ROLLS KEPT UNDER FORCED IDLENESS, WERE IN USE DURIN G THE ENTIRE PERIOD OF THE YEAR. CONSEQUENTLY, THE ASSESS EE, EVEN THOUGH A PASSIVE USER, WAS DEEMED TO BE AN ACTIVE U SER WITHIN THE MEANING OF THE WORD USED, AS THE FILM ROLLS WERE KEPT READY FOR USE AND THEREFORE, THE TRIBUNAL RIGH TLY ALLOWED DEPRECIATION AS CLAIMED UNDER SECTION 32 OF THE ACT. 5. IN VIEW OF ABOVE ORDER OF MADRAS HIGH COURT, WE ARE OF THE OPINION THAT EVEN THE ASSESSEE IS NOT ACTUALLY USED THE WIND MILL, FOR THE PURPOSE OF GENERATION OF POWER, EVEN THOUGH KEP T READY FOR THE ITA NO.197/MDS./2017 :- 4 -: USE, THE ASSESSEE IS ENTITLED FOR DEPRECIATION. AC CORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD.CIT(A) AND TH E SAME IS CONFIRMED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DI SMISSED. ORDER PRONOUNCED ON 01ST MAY, 2017, AT CHENNAI. SD/ - SD/ - ! ' # . $ %& ' ( DUVVURU RL REDDY ) ) % / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER () / CHENNAI *+ / DATED: 1 ST MAY, 2017. K S SUNDARAM +,-- ./-0/ / COPY TO: - 1 . / APPELLANT 3. - 1-!' / CIT(A) 5. /23- 4 / DR 2. / RESPONDENT 4. - 1 / CIT 6. 3&-5 / GF