Metal Crafts, CHENNAI V. ITO Non Corporate Ward 7(4), CHENNAI

ITA 2240/CHNY/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3812 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 27-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Keywords: Depreciation
• Section: 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , D BENCH, CHENNAI . , . , BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ I.T.A.NO.2240/CHNY/2018 [ [ / ASSESSMENT YEAR: 2012-13) M/S. METAL CRAFTS, G-7, INDUSTRIAL ESTATE, AMBATTUR, CHENNAI 600 058. VS THE INCOME TAX OFFICER, NON CORPORATE WARD 7(4), CHENNAI. PAN: AAAFM6669D ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : NONE / RESPONDENT BY : SMT. S.VIJAYAPRABHA, JCIT /DATE OF HEARING : 03.01.2019 /DATE OF PRONOUNCEMENT : 01.02.2019 / O R D E R PER A.MOHAN ALANKAMONY, AM:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-7, CHENNAI, DATED 29.06.2018 IN ITA NO.173/CIT(A)-7/2016-17 FOR THE ASSESSMENT YEAR 2012-13 PASSED U/S.250(6) R.W.S. 154 OF THE ACT. AT THE TIME OF HEARING THE LD.AR WAS NOT PRESENT BEFORE THE BENCH, HOWEVER ON PERUSING THE FILE AND THE SUBMISSION OF THE LD.DR THE BENCH DECIDED TO HEAR THE APPEAL EX-PARTE ON MERITS. 2 ITA NO.2240/CHNY/2018 2. THE ASSESSEE HAS RAISED FOUR GROUNDS IN ITS APPEAL HOWEVER THE CRUX OF THE ISSUE IS THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ORDER OF THE LD.AO PASSED U/S.154 OF THE ACT BY DENYING DEPRECIATION ON LEASE HOLD PROPERTY. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF METAL FABRICATION AND RELATED BUSINES FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2012-13. THE CASE WAS SELECTED FOR SCRUTINY AND FINALLY ASSESSMENT WAS COMPLETED U/S.143(3) OF THE ACT ON 30.03.2015. SUBSEQUENTLY THE LD.AO INITIATED RECTIFICATION PROCEEDINGS U/S.154 OF THE ACT WHEREIN HE DISALLOWED DEPRECIATION AMOUNTING TO RS.9,34,600/- CLAIMED BY THE ASSESSEE IN RESPECT OF BUILDING CONSTRUCTED ON LEASE HOLD PROPERTY. ON APPEAL THE LD.CIT(A) CONFIRMED THE ORDER OF THE LD.AO BY AGREEING WITH HIS VIEW. 4. AT THE OUTSET WE DO NOT FIND ANY MERIT IN THE ORDERS OF THE LD.REVENUE AUTHORITIES. ON THE FIRST COUNT, THE ORDER PASSED BY THE LD.AO IS ERRONEOUS BECAUSE WHAT ACTION THE LD.AO OUGHT TO HAVE INITIATED & CONCLUDED U/S.147 & 148 OF THE ACT CANNOT BE CARRIED OUT U/S.154F OF THE ACT. SECTION 154 OF THE ACT ONLY GIVES SANCTION 3 ITA NO.2240/CHNY/2018 TO THE LD.AO TO RECTIFY ANY MISTAKE THAT IS APPARENT ON RECORD. DEPRECIATION GRANTED AS DEDUCTION TOWARDS THE BUILDING CONSTRUCTED ON LEASE HOLD LAND IN THE REGULAR ASSESSMENT CANNOT BE TREATED AS MISTAKE APPARENT ON RECORD THAT IS REQUIRED TO BE RECTIFIED. MOREOVER ON THE SECOND COUNT THERE IS NO BAR IN THE PROVISIONS OF THE ACT FOR GRANTING DEPRECIATION ON THE BUILDING CONSTRUCTED BY THE ASSESSEE ON LEASE HOLD LAND. LAW ALSO PERMITS THE OWNERSHIP OF LAND AND THE OWNERSHIP OF BUILDING ON THE VERY SAME LAND TO BE DIFFERENT ENTITIES. THEREFORE WE HEREBY SET ASIDE THE ORDER OF THE LD.AO AS WELL AS THE LD.CIT(A). 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THE 1 ST FEBRUARY, 2019 AT CHENNAI. SD/- SD/- ( ) (DUVVURU R.L REDDY) /JUDICIAL MEMBER ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER /CHENNAI, /DATED 1 ST FEBRUARY, 2019 RSR /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( )/CIT(A) 4. /CIT 5. /DR 6. [ /GF