DCIT, Large Taxpayer Unit-1, , Chennai V. Wheels India Ltd, Chennai

ITA 2198/CHNY/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5299 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 08-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R SINDHUJA
• Keywords: Depreciation; Additional depreciation
• Section: 43B

Judgement Text

, ' , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . , , BEFORE SHRI DUVVURU RL REDDY , JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ I.T.A. NO. 2198/CHNY/2017 / ASSESSMENT YEAR : 2011-12 DEPUTY COMMISSIONER OF INCOME TAX, LARGE TAXPAYER UNIT -1, CHENNAI. VS. WHEELS INDIA LTD ., NO. 21 PATULLOS ROAD, PADI, CHENNAI 600 002. [PAN: AAACW 0315K] ( / APPELLANT) ( / RESPONDENT) '( / APPELLANT BY : SHRI. A R V SREENIVASAN, JCIT +,'( / RESPONDENT BY : SHRI. R. SINDHUJA, ADVOCATE ( /DATE OF HEARING : 25.01.2018 ( /DATE OF PRONOUNCEMENT : 24.04.2018 /O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER: THE REVENUE FILED THIS APPEAL AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-17, LTU, CHENNAI IN ITA NO. 3/14-15/CIT(A)-17 DATED 08.06.2017 FOR ASSESSMENT YEAR 2011-12. :-2-: ITA NO. 2198/CHNY/2017 2. WHILE MAKING THE ASSESSMENT FOR ASSESSMENT YEAR 2011-12, IN THE ASSESSEES CASE, I.E., WHEELS INDIA LTD., THE ASSES SING OFFICER, INTER ALIA, NOTED THAT THE ASSESSEE HAS CLAIMED ADDITIONAL DEPRECIATI ON DURING THE YEAR @ 10% (50% OF 20%) IN RESPECT OF THE ADDITIONS MADE TO PL ANT AND MACHINERY IN THE SECOND HALF OF THE PRECEDING ASSESSMENT YEAR I.E.., IN ASSESSMENT YEAR 2010- 11. SINCE , THE ADDITIONS TO FIXED ASSETS WERE MAD E IN THE SECOND HALF OF THAT ASSESSMENT YEAR, FOR THE BALANCE 50% OF ADDITIONAL DEPRECIATION, THE ASSESSEE CLAIMED DURING THIS ASSESSMENT YEAR. THE AO DID NO T ACCEPT THE CLAIM. FURTHER, HE FOUND THAT THE ASSESSEE HAD CLAIMED DEP RECIATION @ 60% ON THE VALUE OF UPS (UNINTERRUPTED POWER SUPPLY SYSTEM). THE AO HELD THAT SINCE THE UPS IS NOT A DATA PROCESSING EQUIPMENT, HE TREA TED UPS AS A PLANT AND MACHINERY AND ALLOWED DEPRECIATION @ 15%. THE ASSE SSEE CLAIMED LEAVE ENCASHMENT PROVISION RELATING TO THE R & D UNIT ELI GIBLE FOR WEIGHTED DEDUCTION U/S. 35(2AB). THE AO REFUSED IT U/S. 43B (F). 3. AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE T HE CIT(A). ON THE ISSUE OF ADDITIONAL DEPRECIATION, THOUGH THIS ITAT IN ITA NOS. 383 & 396/MDS/2014 DATED 26.09.2014 FOR ASSESSMENT YEAR 2 010-11 HAD DECIDED THIS ISSUE AGAINST THE ASSESSEE , THE CIT(A) AFTER CONSIDERING THIS ITAT DECISION IN OTHER CASES AND APPLYING RATIO OF THE M ADRAS HIGH COURT DECISION IN THE CASE OF BRAKES INDIA PVT. LTD., PADI VS DCIT, L TU IN TCA NO. 551 OF 2013 DATED 14.03.2017 ALLOWED THE ASSESSEES PLEA. IN R ESPECT OF DISALLOWANCE :-3-: ITA NO. 2198/CHNY/2017 TOWARDS DEPRECIATION ON UPS, THE CIT(A) FOLLOWING T HIS TRIBUNAL DECISION IN ITA NO 396/MDS/2014 DATED 26.09.2014 IN THE ASSESSEES CASE FOR ASSESSMENT YEAR 2010-11 AND THE DELHI HIGH COURT DECISION IN T HE CASE OF CIT VS ORIENT CERAMICS & INDUSTRIES LTD 56 DTR 397 (DEL), ALLOWED THE ASSESSEES PLEA HOLDING THAT UPS SHOULD BE TREATED AS PART OF COMPU TER HARDWARE. ON THE DISALLOWANCE OF WEIGHTED DEDUCTION CLAIMED U/S. 35( 2AB), BUT DISALLOWED 43B, RELATED TO R & D UNIT, THE CIT(A) RELYING ON HIGH C OURT OF CALCUTTA IN 292 ITR 470 AND THIS TRIBUNAL DECISIONS IN THE CASE OF IOB VS DCIT IN ITA NO 1815/MDS/2011 DATED 02.04.2013 AND IN THE ASSESSEE S CASE IN ITA NO 379/MDS/2014 DATED 26.09.2014 FOR ASSESSMENT YEAR 2 007-08 ALLOWED THE ASSESSEES PLEA. AGGRIEVED, THE REVENUE FILED THIS APPEAL. 4. WE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH THE RELEVANT ORDERS. ON THE ISSUE OF ADDITIONAL DEPRECIATION, SINCE THE CIT(A) HAS APPLIED THE RATIO OF THE JURISDICTIONAL HIGH COURT, WE DO NOT FIND AN Y REASON TO INTERFERE WITH HER ORDER ON THAT ISSUE. ON THE ISSUE OF DISALLOWA NCE OF DEPRECIATION ON UPS, SINCE THE CIT(A) FOLLOWED THE DECISION OF THIS TRIB UNAL IN THE ASSESSEES OWN CASE, HER ORDER ON THAT ISSUE REQUIRES NO INTERFERE NCE. ON THE ISSUE OF DISALLOWANCE OF WEIGHTED DEDUCTION ON EXPENDITURE D ISALLOWED 43B RELATED TO R & D UNIT ALSO, THE CIT(A) FOLLOWED THE DECISION O F THIS TRIBUNAL IN THE ASSESSEES OWN CASE, WE DO NOT FIND ANY REASON TO I NTERFERE WITH THE ORDER OF :-4-: ITA NO. 2198/CHNY/2017 THE CIT(A) ON THIS ISSUE. THUS, ALL THE GROUNDS OF THE REVENUE APPEALS ARE DISMISSED. 5. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . ORDER PRONOUNCED ON TUESDAY, THE 24 TH DAY OF APRIL, 2018 AT CHENNAI. SD/- ( . ' ) (DUVVURU RL REDDY) $% /JUDICIAL MEMBER SD/- ( ) (S. JAYARAMAN) % /ACCOUNTANT MEMBER /CHENNAI, 1 /DATED: 24 TH APRIL , 2018 JPV (+3454 /COPY TO: 1. '/ APPELLANT 2. +,' /RESPONDENT 3. 6 ( )/CIT(A) 4. 6 /CIT 5. 4+ /DR 6. 9 /GF