M/s. L & T Western India Tollbridge Limited, CHENNAI V. DCIT, CHENNAI

ITA 1971/CHNY/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64582 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 22-11-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 08-12-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR S MOHARANA IRS
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Depreciation
• Section: 32; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO.1971(MDS)/2011 ASSESSMENT YEAR : 2003-04 M/S.L&T WESTERN INDIA TOLL- BRIDGE LTD., P.B. NO.979, MOUNT POONAMALLEE ROAD, MANAPAKKAM, CHENNAI-89. PAN AAACL7084N. VS. THE DEPUTY COMMISSIONER OF INCOME-TAX, COMPANY CIRCLE II(4), CHENNAI. (APPELLANT) (RESPONDENT) AND ITA NO.2105(MDS)/2011 ASSESSMENT YEAR : 2003-04 THE ASSISTANT COMMISSIONER M/S.L&T WEST ERN INDIA TOLL- OF INCOME-TAX, COMPANY VS. BRIDE LTD., MANAPAKKAM, CIRCLE II(4), CHENNAI. CHE NNAI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R.VIJAYARAGHAVAN , ADVOCATE DEPARTMENT BY : DR. S.MOHARANA, IRS, C IT DATE OF HEARING : 22 ND NOVEMBER, 2012 DATE OF PRONOUNCEMENT : 22 ND NOVEMBER, 2012 - - ITA 1971 & 2105 OF 2011 2 O R D E R PER DR.O.K.NARAYANAN, VICE-PRESIDENT THESE ARE CROSS APPEALS FILED BY THE ASSESSE E AND THE REVENUE FOR THE ASSESSMENT YEAR 2003-04. T HEY ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME- TAX(APPEALS)-IV AT CHENNAI, DATED 16-9-2011. THEY ARISE OUT OF THE ASSESSMENT COMPLETED UNDER SECTION 143(3), READ WITH SECTION 147 OF THE INCOME-TAX ACT, 1961. 2. IN THE APPEAL FILED BY THE ASSESSEE, THE FIRST GROUND RAISED IS THAT THE COMMISSIONER OF INCOME-TAX(APPEA LS) HAS ERRED IN CONFIRMING THE ACTION INITIATED BY THE ASS ESSING OFFICER UNDER SECTION 147 OF THE ACT, GIVEN THE SAME IS WIT HOUT JURISDICTION AND TIME BARRED IN LAW. AS RIGHTLY OB SERVED BY THE COMMISSIONER OF INCOME-TAX(APPEALS), THE ASSESSEE-C OMPANY HAD CLAIMED EXCESS DEPRECIATION, WHICH WAS IN THE K NOWLEDGE OF THE ASSESSING OFFICER EVEN BEFORE THE ISSUE OF NOTI CE UNDER SECTION 147. THEREFORE, THERE IS REASON FOR THE AS SESSING OFFICER TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. ACC ORDINGLY, - - ITA 1971 & 2105 OF 2011 3 WE AGREE WITH THE COMMISSIONER OF INCOME-TAX(APPEAL S) THAT THE REOPENING WAS IN ACCORDANCE WITH LAW. THIS GROUND IS REJECTED. 3. THE SECOND ISSUE RAISED BY THE ASSESSEE IS THAT THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS ERRED IN TR EATING THE PROJECT ASSET DEVELOPED BY THE ASSESSEE AS BUILDIN G, INSTEAD OF PLANT, AS CLAIMED BY THE ASSESSEE FOR THE PURPOSE OF DEPRECIATION UNDER SECTION 32 OF THE INCOME-TAX ACT , 1961. IT IS TO BE SEEN THAT THE COMMISSIONER OF INCOME-TAX(APPE ALS) HAS JUST FOLLOWED THE ORDER OF THE INCOME-TAX APPELLATE TRIBUNAL, A-BENCH, CHENNAI, RENDERED IN THE CASE OF M/S. L&T TRANSPORTATION INFRASTRUCTURE LTD. IN ITA NO.1692. IN FACT THE COMMISSIONER OF INCOME-TAX(APPEALS) WAS JUST FOLLOW ING THE ORDER OF THE TRIBUNAL IN ITA NO.1692 DATED 30-11-20 10 AND ALSO ANOTHER ORDER OF THE INCOME-TAX APPELLATE TRIBUNAL, C-BENCH, CHENNAI, PASSED IN THE CASE OF M/S.T.N.ROAD DEVELOP MENT COMPANY, IN ITA NO.2082(MDS)/2008, DATED 24-10-2008 . IN BOTH THESE DECISIONS THE TRIBUNAL HAS HELD THAT THE COMPANY IS ENTITLED FOR DEPRECIATION AT 10% ON ROADS, WHICH IS APPLICABLE TO BUILDINGS. THE TRIBUNAL HELD THAT THE ASSESSEE CAN NOT CLAIM - - ITA 1971 & 2105 OF 2011 4 DEPRECIATION AT THE RATE APPLICABLE TO PLANT AND MA CHINERY. THEREFORE, WE FIND THAT THERE IS NO INFIRMITY IN TH E ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) AND THIS GROUND IS ALSO LIABLE TO BE REJECTED. 4. NOW, COMING TO THE APPEAL FILED BY THE REVENUE, THE GROUND IS THAT THE COMMISSIONER OF INCOME-TAX(A PPEALS) HAS ERRED IN ALLOWING THE DEPRECIATION CLAIM OF THE ASS ESSEE ON PROJECT ASSETS AT THE RATE OF 10% APPLICABLE TO BUI LDINGS. IT IS THE CASE OF THE REVENUE THAT THE ASSESSEE IS NOT ENTITL ED FOR ANY AMOUNT OF DEPRECIATION, AS THE ASSESSEE IS NOT THE OWNER OF THE ASSET BUILT IN BY IT. BUT, AS ALREADY POINTED OUT BY THE COMMISSIONER OF INCOME-TAX(APPEALS), THE TRIBUNAL H AS HELD IN SIMILAR CASES THAT THE ASSESSEE IS ENTITLED FOR DEP RECIATION AT THE RATE OF 10%. THIS GROUND OF THE REVENUE, THEREFORE , FAILS. 5. IN RESULT, THE APPEAL FILED BY THE ASSESSEE AS WELL AS THE APPEAL FILED BY THE REVENUE ARE DISMISSED. - - ITA 1971 & 2105 OF 2011 5 ORDERS PRONOUNCED IN THE OPEN COURT AT THE TIME O F HEARING ON THURSDAY, THE 22 ND OF NOVEMBER, 2012 AT CHENNAI. SD/- SD/- (VIKAS AWASTHY) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED, THE 22 ND NOVEMBER, 2012. V.A.P. COPY TO: 1. ASSESSEE 2. DEPARTMENT 3. CIT 4. CIT(A) 5. DR 6. GF.