Hira Electro Smelters Limited, Bobbili V. The Deputy Commissioner of Income Tax, Circle-3(1), , Visakhapatnam

ITA 225/VIZ/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 4963 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 26-04-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D V SUBBA RAO
• Assessee Lawyers: SAURABH AGARWAL
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , HONBLE ACCOUNTANT MEMBER ITA NO. 2 25 / VIZ /201 9 (ASST. YEAR : 20 12 - 13 ) M/S. HIRA ELECTRO SMELTERS LTD., PLOT NO. 364 TO 367, APIIC GROWTH CENTRE, BOBBILI . V S . D CIT, CIRCLE - 3 (1), VISAKHAPATNAM. PAN NO. AADCR 5279 C (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SAURABH AGARWAL C A. DEPARTMENT BY : SHRI D.V. SUBBA RAO SR. DR DATE OF HEARING : 05 / 0 8 /201 9 . DATE OF PRONOUNCEMENT : 14 / 0 8 /201 9 . O R D E R PER V. DURGA RAO, JUDICIAL MEMBER TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 1 , VISAKHAPATNAM , DATED 30 /0 1 /201 9 FOR THE ASSESSMENT YEAR 20 12 - 13 . 2. THE ONLY GROUND PRESSED BY THE ASSESSEE FOR ADJUDICATION IS AS UNDER: - C . THE ASSESSING OFFICER HAS ERRED BY ADDING DEPRECIATION RESTRICTED TO 10% ON TEMPORARY BUILDINGS TO THE TUNE OF RS.14,36,170/ - . 3 . FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE - COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING FERRO ALLOYS , FILED ITS 2 ITA NO. 225 /VIZ/2019 (M/S. HIRA ELECTRO SMELTERS LTD. ) RETURN OF INCOME DECLARING INCOME OF RS. 71,16,250/ - . THE RETURN FILED BY THE ASSESSEE WAS SELECTED FOR SCRUTINY UNDER CASS AND AFTER FOLLOWING DUE PROCEDURE , ASSESSMENT WAS COMPLETED U/SEC.143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'ACT') DATED 20/03/2015. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS NOTED THAT FROM THE DEPRECIATION SCHEDULE , THE ASSESSEE CLAIMED DEPRECIATION AT 100 % ON TEMPORARY BUILDINGS TO THE TUNE OF RS. 16,25,132/ - . ON EXAMINATION OF THE DE TAILS , THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS CONSTRUCTED A BOUNDARY WALL , WHICH CANNOT BE SAID TO BE A TEMPORARY STRUCTURE. THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN AS TO WHY DEPRECIATION ON THE BOUNDARY WALL , WHICH IS TEMPORARY STRUCTURE , SHOULD NOT BE RESTRICTED TO 10% AS AGAINST 100% . THE ASSESSEE HAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT THE BOUNDARY WALL CONSTRUCTED BY THE COMPANY IS A TEMPORARY ERECTION AND THE BOUNDARY WALL IS NOT AN ASSET OF ENDU RING NATURE . THE ASSESSING OFFICER CONSIDERED THE EXPLANATION OF THE ASSESSEE AND NOTED THAT THE BOUNDARY WALL CONSTRUCTED BY THE ASSESSEE IS NOT A TEMPORARY STRUCTURE AND IS ENDURING IN NATURE . THEREFORE, THE ASSESSING OFFICER HAS RESTRIC T ED THE DEPRECIATION TO 10% AS AGAINST 100% CLAIMED BY THE ASSESSEE. 3 ITA NO. 225 /VIZ/2019 (M/S. HIRA ELECTRO SMELTERS LTD. ) 4 . ON APPEAL, BEFORE THE LD. CIT(A), THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE TO SHOW THAT THE CONSTRUCTION OF BOUNDARY WALL IS A TEMPORARY IN NATURE, THEREFORE, LD. CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 5. ON APPEAL BEFORE US, THE ASSESSEE EXCEPT STATING THAT THE CONSTRUCTION OF BOUNDARY WALL IS A TEMPORARY IN NATURE, NO EVIDENCE IS PRODUCED. WE FIND THAT THE ASSESSING OFFICER GAVE A CATEGORICAL FI N DING THAT THE BOUNDARY WALL CONSTRUCTED BY THE ASSESSEE IS NOT A TEMPORARY IN NATURE AND ENDURING BENEFIT TO THE ASSESSEE, FOR WHICH , THE ASSESSEE HAS NOT BROUGHT ANY MATERIAL TO CONTROVERT THE FINDING GIVEN BY THE ASSESSING OFFICER. ON APPEAL, LD. CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER. AFTER CONSIDERING THE FACTS OF THE CASE, WE FIND NO REASON TO INTERFERE WITH THE ORDER PASSED BY THE LD. CIT(A). THUS, THIS APPEAL FILED BY THE ASSESSEE IS DISMISSED. 6 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON TH IS 1 4 T H DAY OF AUGUST , 201 9 . S D / - S D / - ( D.S. SUNDER SINGH ) ( V. DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 1 4 T H AUGUST , 201 9 . VR/ - COPY TO: 4 ITA NO. 225 /VIZ/2019 (M/S. HIRA ELECTRO SMELTERS LTD. ) 1. THE ASSESSEE M/S. HIRA ELECTRO SMELTERS LTD., PLOT NO. 364 TO 367, APIIC GROWTH CENTRE, BOBBILI. 2. THE REVENUE DCIT, CIRCLE - 3(1), VISAKHAPATNAM. 3. THE PR. CIT - 1, VISAKHAPA 4. TNAM. 5. THE CIT(A) - 1, VISAKHAPATNAM. 6. THE D.R . , VISAKHAPATNAM. 7. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.