ADDL. CIT, SPECIAL RANGE- 9, NEW DELHI V. THE FERTILIZER CORPORATION OF INDIA LTD., NOIDA

ITA 2016/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5205 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2014-2015
• Appeal Filed On: 22-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AGAINST DATED PASSED
• Keywords: Business income; Depreciation

Judgement Text

1 ITA NO. 2016/DEL/2018 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI N. K. BILLAIYA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER I.T.A. NO. 2016/DEL/20 18 (A.Y 2014-15) (THROUGH VIDEO CON FERENCING) ADDL. CIT SPECIAL RANGE-9 C. R. BUILDING, NEW DELHI (APPELLANT) VS THE FERTILIZER CORPORATION OF INDIA LTD. PDIL BHAWAN (5 TH FLOOR), A- 14, SECTOR-1 NOIDA, UTTAR PRADESH AAACF1661P (RESPONDENT) ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE REVENUE AGAINST ORDER DATED 07/12/2017 PASSED BY CIT(A)-16, NEW DELHI FOR ASSESSMENT YEAR 2014-15. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THAT THE LD.CIT(A) HAS ERRED IN LAW AND FACTS BY A LLOWING THE CLAIM OF DEPRECIATION WITHOUT APPRECIATING THE FACT THAT MER E PURCHASE OF THE ASSET DOES NOT MAKE IT ELIGIBLE FOR CLAIM OF DEPRECIATION UNLESS IT IS PUT TO USE FOR THE BUSINESS ACTIVITY. APPELLANT BY NONE RESPONDENT BY DR. MAHINDER KAUR, SR. DR DATE OF HEARING 06.09.2021 DATE OF PRONOUNCEMENT 06.09.2021 2 ITA NO. 2016/DEL/2018 3. IT IS CLEARLY MENTIONED IN THE ASSESSMENT ORDER THAT DURING THE PREVIOUS YEAR RELATING TO THE ASSESSMENT YEAR UNDER CONSIDER ATION, THE ASSESSEE DID NOT DERIVE ANY BUSINESS INCOME DUE TO VARIOUS FINANCIAL CONSTRAINTS AND COULD NOT OPERATE ITS BALANCE DUE TO HEAVY FINANCIAL LOSSES. THE COMPANY WAS REFERRED TO BIFR WHICH RECOMMENDED FOR WINDING UP OF THE COMPAN Y. THE ASSESSING OFFICER MADE ADDITION/DISALLOWANCE IN RESPECT OF C LAIM OF DEPRECIATION FOR RS.2,67,09,834/-. 4. BEING AGGRIEVED BY THE PENALTY ORDER, THE ASSESS EE FILED APPEAL BEFORE THE CIT(A). THE CIT (A) ALLOWED THE APPEAL OF THE ASSE SSEE. 5. AT THE TIME OF HEARING DESPITE GIVING NOTICE NON E APPEARED ON BEHALF OF THE ASSESSEE. THEREFORE, WE ARE PROCEEDING ON THE BASIS OF THE CONTENTIONS TAKEN BY THE ASSESSEE BEFORE THE ASSESSING OFFICER AND THE CIT (A). 6. THE LD. DR RELIED UPON THE ASSESSMENT ORDER. 7. WE HAVE HEARD LD. AR AND PERUSED ALL THE RELEVAN T MATERIAL AVAILABLE ON RECORD. FROM THE PERUSAL OF THE ORDER OF THE CIT(A ) IN PARA 6, IT IS OBSERVED THAT THE REASON FOR DISALLOWANCE IS THAT NO MANUFAC TURING WAS CARRIED OUT DURING THE YEAR MEANING THEREBY THAT THE ASSETS CON CERN WERE NOT PUT TO USE AS PER THE FINDING OF THE ASSESSING OFFICER. THE A SSESSEE FILED A COPY OF THE APPELLATE ORDER DATED 25/2/2016 IN ASSESSEES OWN C ASE FOR ASSESSMENT YEAR 2005-06 WHEREIN THIS ISSUE WAS CONSIDERED AND THE A SSESSEES CLAIM TOWARDS DEPRECIATION WAS ALLOWED. THE ASSESSEE SUBMITTED B EFORE THE CIT(A) THAT ORDERS OF THE CIT(A) FOR ASSESSMENT YEAR 2006-07, 2008-09, 2009-10 & 2013-14 WAS DECIDED IN ASSESSEES FAVOUR. THE CIT(A) HAS ALSO RELIED UPON THE DECISION OF THE HONBLE DELHI HIGH COURT IN CASE OF CIT VS. QSW AL AGRO MILLS LTD. 341 ITR 467 AS WELL AS ORDER OF TRIBUNAL IN SWATI SYNTHETIC LTD. VS. ITO (2010) 38 SOT 3 ITA NO. 2016/DEL/2018 208. BEFORE US, NO DISTINGUISHING FACTS WERE PRESE NTED BY THE REVENUE FROM THE EARLIER YEARS. THEREFORE, WE FIND THAT THERE IS NO DISCREPANCY IN THE ORDER OF THE CIT(A) AND WE ARE NOT INCLINED TO INTERFERE WIT H THE OBSERVATIONS MADE BY THE CIT(A). HENCE, THE APPEAL OF THE REVENUE IS DI SMISSED. 8. IN RESULT, THE APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 06TH DAY OF SEPTEMBER, 2021 SD/- SD/- (N. K. BILLAIYA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 06/09/2021 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 4 ITA NO. 2016/DEL/2018