DCIT, New Delhi V. M/s. ABC Paper Ltd., New Delhi

ITA 2263/DEL/2012

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3139 (ITAT-DELHI)
• Duration Of Justice: 5 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 08-02-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 11-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Keywords: Capital asset; Depreciation; Principle of natural justice; Rule of consistency; Additional depreciation; Additional evidence; Revenue expenditure; Capital expenditure
• Section: 32

Judgement Text

I.T.A. NO. 2263/DEL/2012 ASSESSMENT YEAR 2008-09 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES A BENCH DELHI BEFORE SHRI S.V. MEHROTRA, VICE PRESIDENT AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 2263/DEL/2012 ASSTT. YEAR: 2008-09 DCIT, VS ABC PAPER LTD., CIRCLE- 1(1), M-2, AAKARSHAN BHAWAN, C.R. BUILDING, 4754/23, ANSARI ROAD, NEW DELHI. DARYAGANJ, NEW DELHI. (PAN: AADCA2231K) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI S.K. JAIN, DR RESPONDENT BY: SHRI AJAY VOHRA, SR. DR SHRI ROHIT GARG, CA SHRI A. KAPOOR, CA DATE OF HEARING: 08.02.2017 DATE OF ORDER: 11.05.2017 ORDER PER SUDHANSHU SRIVASTAVA, J.M. THIS IS AN APPEAL PREFERRED BY THE DEPARTMENT AGAIN ST THE ORDER PASSED BY THE LD. CIT(A)-IV, NEW DELHI VIDE D ATED 16.02.2012 AND PERTAINS TO ASSESSMENT YEAR 2008-09. 2. THE ASSESSEE IS A PUBLIC LISTED COMPANY INCORPO RATED IN 1940 WHICH WAS ENGAGED IN FOUR DISTINCT BUSINESSES, VIZ. I.T.A. NO. 2263/DEL/2012 ASSESSMENT YEAR 2008-09 MANUFACTURING AND TRADING OF BANASPATI AND EDIBLE O ILS; MANUFACTURING OF ALL CLASSES OF WRITING AND PRINTIN G PAPER; MANUFACTURING, PROCESSING AND TRADING OF DAIRY MILK AND MILK PRODUCTS. THE ASSESSEE COMPANY ACQUIRED FOLLOWING S IX ESTABLISHED PAPER BRANDS FROM M/S AMRIT BANASPATI C OMPANY LTD. (ABCL) IN THE YEAR 2005-06 FOR RS. 603.52 LAC S:- (I) ABC GOLD; (II) AQUA SAPPHIRE; (III) PEARL WHITE; (IV) DIAMOND COLOUR; (V) BLUE DIAMOND; AND (VI) AMRIT LEDGER DELUXE 2.1 THE ABOVE ACQUISITION OF THE SIX PAPER BRANDS OF ABCL BY THE ASSESSEE COMPANY WAS IN TERMS OF A SCHEME OF AR RANGEMENT APPROVED BY THE HONBLE HIGH COURTS OF ALLAHABAD, D ELHI AND CHANDIGARH, WHEREBY THE PAPER UNDERTAKING OF ABCL W AS DEMERGED AND VESTED IN THE ASSESSEE COMPANY W.E.F. 1 ST APRIL 2006. THE ASSESSEE HAD SHOWN THE ABOVE BRANDS AS C APITAL ASSET AND HAD CLAIMED DEPRECIATION OF RS.99,01,500/ - FOR THE YEAR UNDER CONSIDERATION @ 25% APPLICABLE TO INTANG IBLE ASSETS. THE ABOVE TREATMENT OF THE BRANDS BY THE ASSESSEE A ND I.T.A. NO. 2263/DEL/2012 ASSESSMENT YEAR 2008-09 DEPRECIATION CLAIMED @ 25% ON THE SAME WAS ALLOWED BY THE AO IN THE EARLIER TWO ASSESSMENT YEARS, VIZ. A.Y. 2006 -07 AND 2007- 08. HOWEVER, DURING THE YEAR UNDER CONSIDERATION, T HE AO HAS ACCEPTED THE ASSESSEES CLAIM THAT THE ABOVE BRANDS WERE CAPITAL ASSETS, BUT THE CLAIM OF DEPRECIATION WAS D ISALLOWED BY HOLDING THAT BRANDS ARE NOT COVERED UNDER THE IN TANGIBLE ASSETS AS PER SECTION 32(1) (II) OF THE ACT. FURT HER, THE ASSESSING OFFICER ALSO DISALLOWED THE CLAIM OF DEPR ECIATION AMOUNTING TO RS. 7,44,36,109/- ON CHEMICAL RECOVERY PLANT ON THE GROUND THAT THE SAID PLANT WAS NOT PUT TO USE D URING THE YEAR UNDER CONSIDERATION AS CERTAIN ASSETS WERE STI LL UNDER CONSTRUCTION/TESTING STAGE. 2.2 AGGRIEVED, THE ASSESSEE HAD PREFERRED AN APPEA L BEFORE THE LD. CIT (A) WHEREIN THE LD. CIT (A) WAS PLEASED TO DELETE THESE TWO ADDITIONS. NOW, THE DEPARTMENT HAS APPROACHED THE ITAT AND HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THE ID. CIT (A) HAS ERRED ON FACTS AND IN LAW IN DELETING ADDITION OF RS. 99,01,500/- ON ACCOUNT OF DEPRECIATION ON PAPER BRAND. 2. THE ID. CIT (A) HAS ERRED ON FACTS AND IN LAW IN DELETING ADDITION OF RS.7,44,36,109/- ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION ON CHEMICAL RECOVERY PLANT . I.T.A. NO. 2263/DEL/2012 ASSESSMENT YEAR 2008-09 3. LD. DR SUBMITTED THAT THE PAPER BRAND WAS A CA PITAL EXPENSE BUT WAS NOT A DEPRECIABLE ASSET AND WAS RATHER AN A PPRECIABLE ASSET WHOSE ASSET VALUE ENHANCED WITH TIME. IT WAS FURTHER SUBMITTED THAT THE PAPER BRAND DID NOT FALL WITHIN THE MEANING OF SECTION 32(1) OF THE INCOME TAX ACT AND, THEREFO RE, WAS NOT ELIGIBLE FOR DEPRECIATION. IT WAS FURTHER SUBMITTE D THAT THE LD. CIT (A) HAD ERRED IN DIRECTING THAT THIS ADDITION B E DELETED AND DEPRECIATION BE ALLOWED. 3.1. ON THE SECOND GROUND BEFORE THE ITAT, IT WAS SUBMITTED THAT THE BASIC CONDITION OF CLAIMING DEPRECIATION O F ANY ASSET WAS THAT THE ASSET MUST HAVE BEEN PUT TO USE DURING THE RELEVANT ASSESSMENT YEAR. LD. DR SUBMITTED THAT IN CASE THE ASSET IS NOT PUT TO USE, DEPRECIATION WILL NOT BE ALLOWABLE. LD . DR SUBMITTED THAT CONSTRUCTION AND TESTING ARE PRIOR TO THE ASSE T BEING PUT TO USE AND SINCE THE CHEMICAL RECOVERY PLANT IS A COMP LETE PLANT, IT CANNOT BE USED IF MANY OF ITS PARTS WERE STILL AT CONSTRUCTION/TESTING STAGE AS OBSERVED BY THE ASSES SING OFFICER IN PARA 5.5.3 OF THE ASSESSMENT ORDER. 4. IN RESPONSE, LD. AR SUBMITTED THAT AS FAR AS TH E ISSUE OF DEPRECIATION ON PAPER BRAND WAS CONCERNED, THE SAME HAD BEEN ACCEPTED BY THE DEPARTMENT IN LATER YEARS AND THERE FORE,THE SAME I.T.A. NO. 2263/DEL/2012 ASSESSMENT YEAR 2008-09 SHOULD BE ALLOWED IN THIS YEAR ALSO. RELIANCE WAS ALSO PLACED ON THE FINDINGS OF THE LD. CIT (A) ON THIS ISSUE. ON THE ISSUE OF DEPRECIATION ON CHEMICAL RECOVERY PLANT, THE LD. AR DREW THE BENCHS ATTENTION TO PAGES 89-91, 92, 93, 94, 97, 9 9, 100, 101, 103 AND 233 IN THE PAPER BOOK AND SUBMITTED THAT TH ESE DOCUMENTS WERE SUBMITTED BEFORE THE LD. CIT (A) IN SUPPORT OF THE ASSESSEES CLAIM THAT THE CHEMICAL RECOVERY HAD BEEN PUT TO USE BEFORE THE END OF THE FINANCIAL YEAR. IT WAS F URTHER SUBMITTED THAT THE ASSESSING OFFICER HAD VERIFIED THESE DOCUM ENTS IN HIS REMAND REPORT AND AS SUCH, THE FINDING BY THE LD. C IT(A) THEREAFTER WAS CONCLUSIVE AND IN FAVOUR OF THE ASSE SSEE. IT WAS SUBMITTED THAT IN VIEW OF THE FACTUAL FINDING CATEG ORICALLY STATED BY THE LD. CIT(A) IN THE IMPUGNED ORDER, THE IMPUGN ED ACTION OF THE LD. CIT(A) BE UPHELD. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PE RUSED THE RELEVANT MATERIAL ON RECORD. IT IS SEEN THAT THE L D. CIT (A) HAS DISCUSSED AND ADJUDICATED THE ISSUE RELATING TO DEP RECIATION ON THE PAPER BRAND IN PARA 5.2 OF THE IMPUGNED ORDER W HICH READS AS UNDER:- 5.2 I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDE R AND THE SUBMISSIONS MADE BY THE ID. AR ON THE ABOVE ISSUE. FOR THE SAKE OF CLARITY, I WOULD LIKE TO REPRODUCE THE PROVISIONS I.T.A. NO. 2263/DEL/2012 ASSESSMENT YEAR 2008-09 OF SECTION 32(1 )(II) OF THE ACT WHICH IS AS UNDER: 32. (1) IN RESPECT OF DEPRECIATION OF- (II) KNOW-HOW, PATENTS, COPYRIGHTS , TRADE MARKS, LICENCES, FRANCHISES OR ANY OTHER BUSINESS OR COMMERCIAL RIGHTS OF SIMILAR NATURE, BEING INTANGIBLE ASSETS ACQUIRED ON OR AFTE R THE 1 ST DAY OF APRIL, 1998, OWNED, WHOLLY OR PARTLY, BY THE ASSESSEE AND USED F OR THE PURPOSES OF THE BUSINESS OR PROFESSION, THE FOLLOWI NG DEDUCTIONS SHALL BE ALLOWED' AS CAN BE SEEN FROM THE ABOVE, THE DEFINITION OF I NTANGIBLE ASSETS UNDER SECTION 32(1 )(II) IS AN INCLUSIVE DE FINITION WHICH NOT ONLY INCLUDES KNOW-HOW, PATENTS, COPYRIGHTS, TRADEM ARKS, LICENCES, FRANCHISES BUT ALSO ANY OTHER BUSINESS OR COMMERCIAL RIGHTS OF SIMILAR NATURE. THEREFORE, THE INTERPRETA TION OF THE AO - THAT SINCE BRAND IS NOT SPECIFICALLY MENTIONED IN SECTION 32(1) (II), IT CANNOT BE EQUATED WITH TRADE MARK AND HE NCE, DEPRECIATION ON THE SAME IS NOT ADMISSIBLE - APPEAR S TO BE BASED ON LACK OF PROPER APPRECIATION OF THE PROVISIONS OF THE ABOVE SECTION WHICH SPECIFICALLY INCLUDES NOT ONLY TRADE MARK BUT ALSO ANY OTHER BUSINESS OR COMMERCIAL RIGHTS OF SIMILAR NATURE. FURTHER, SINCE TRADE MARK HAS NOT BEEN SPECIFICAL LY DEFINED UNDER THE I T. ACT, AS POINTED OUT BY THE LD. AR VI DE WRITTEN SUBMISSION REPRODUCED SUPRA, WE HAVE TO RELY ON THE DEFINITION OF TRADE MARK UNDER THE TRADE MARKS ACT, 1999. AS PE R SECTION 2(ZB) OF THE TRADE MARKS ACT, 1999 TRADE MARK INC LUDES MARK AND THE DEFINITION OF MARK AS PER SECTION 2(M) OF THE ABOVE ACT SPECIFICALLY INCLUDES BRAND AS FOLLOWS: I.T.A. NO. 2263/DEL/2012 ASSESSMENT YEAR 2008-09 'MARK' INCLUDES A DEVICE, BRAND, HEADING, LABEL, TI CKET, NAME, SIGNATURE, OR ANY COMBINATION THEREOF.' FURTHER, AS POINTED OUT BY THE LD. AR, AS PER PARA 7, 8 AND 9 OF THE ACCOUNTING STANDARD 26 (AS 26) ISSUED BY THE IC AI, THE DEFINITION OF INTANGIBLE ASSET' AND TRADE MARK SPE CIFICALLY INCLUDES BRAND NAMES. EVEN, THE DICTIONARY MEANIN G OF BRAND NAME' AS PER THE ILLUSTRATED OXFORD DICTIONARY IS AN IDENTIFYING TRADE MARK, LABEL ETC. THE LD. AR HAS ALSO RELIE D UPON A LARGE NUMBER OF CASE LAWS, VIZ. IN THE CASE OF KEC INTERN ATIONAL LTD. VS. ADDL. CIT (ITA NO. 4420/MUM/2009) WHEREIN IT WAS HE LD BY THE HONBLE MUMBAI TRIBUNAL THAT BRAND IS AN INTANGIBLE ASSET ELIGIBLE FOR DEPRECIATION UNDER SECTION 32 OF THE ACT. FURTH ER, THE HONBLE BOMBAY HIGH COURT IN CIT VS. TECHNO SHARES AND STOC KS LTD. (ITR 323(69) MUMBAI) HELD THAT BRAND IS AN INTELLECTUA L PROPERTY WHICH CAN BE EQUATED WITH TRADE MARK. FURTHER, TH E HONBLE ITAT, PUNE VIDE ITS RECENT ORDER DATED 23.08.2011 I N THE CASE OF M/S DILBRIS INTERNATIONAL PVT. LTD. VS. DCIT (ITA N O. 1361 PN/2010) RELYING ON THE DECISION OF THE HONBLE ITA T, DELHI IN HINDUSTAN COCA COLA BEVERAGES (P) LTD. VS. DCIT HAS HELD THAT BRAND NAME IS ELIGIBLE FOR DEPRECIATION. THE RELEVA NT PORTION OF THE ORDER IS EXTRACTED BELOW: THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF A MWAY INDIA HAS HELD THAT IF THE SOFTWARE IS USEABLE/USED FOR MORE THAN 2 YEARS, IT IS A CAPITAL EXPENDITURE AND IF IT IS FOR LESS THAN 2 YEARS, IT IS REVENUE EXPENDITURE. WE TH US FOLLOWING THE RATIO LAID DOWN THEREIN COME TO THE C ONCLUSION THAT IN THE PRESENT CASE, SINCE THE ASSESSEE HAD PU RCHASED THE USER OF BRAND NAME, TRADEMARK, LOGO FOR 3 YEARS AND SIMILARLY, THE INTELLECTUAL PROPERTY RIGHT SUCH AS DESIGN, DRAWINGS, MANUFACTURING PROCESSES AND TECHNICAL I.T.A. NO. 2263/DEL/2012 ASSESSMENT YEAR 2008-09 KNOWHOW IN RESPECT OF THE PRODUCTS MANUFACTURED BY UNIT WAS ACQUIRED, WE HOLD THAT THE EXPENDITURE INCURRED IN THIS REGARD AS VALUED BY THE APPROVED VALUER IS CAPITAL EXPENDITURE ON WHICH THE CLAIMED DEPRECIATION WAS ALLOWABLE. IN THIS REGARD WE ALSO FIND SUPPORT FROM THE CITED DECISION OF DELHI BENCH OF THE TRIBUNAL IN TH E CASE OF HINDUSTAN COCA COLA BEVERAGES (P) LTD VS. DCIT HOLD ING THAT EVEN IF AN AMOUNT IS TERMED AS GOODWILL IN T HE BOOKS OF ACCOUNT BUT IT IS A BUSINESS OR COMMERCIAL RIGHT IN THE NATURE OF KNOW-HOW, PATENT, COPYRIGHTS, TRADEMARKS, LICENSES, FRANCHISES, THE CLAIM OF DEPRECIATION IS INDEED ADMISSIBLE THEREUPON. WE ACCORDINGLY DIRECT THE A.O TO ALLOW THE CLAIMED DEPRECIATION ON THE ABOVE ASSETS. IN VIEW OF THE FACTS AND CIRCUMSTANCES AND STATUTOR Y PROVISIONS AS DISCUSSED ABOVE AND RESPECTFULLY FOLLOWING THE J UDICIAL PRONOUNCEMENTS ON THE ISSUE CITED SUPRA AND ALSO CONSIDERING THE RULE OF CONSISTENCY AS THE ASSESSEE S CLAIM FOR DEPRECIATION ON THE SAID BRANDS HAS BEEN ALLOWE D BY THE AO IN THE EARLIER TWO ASSESSMENT YEARS, I FIND THAT THE IMPUGNED ADDITION OF RS.99,01,500/- MADE BY THE AO CANNOT BE SUSTAINED. THE SAME IS, THEREFORE, DELETE D. 5.1 THIS FINDING OF THE LD. CIT (A) COULD NOT BE CONTROVERTED BY THE DEPARTMENT BEFORE US. THE DEPARTMENT ALSO COUL D NOT POINT OUT ANY JUDICIAL PRECEDENTS IN FAVOUR OF THE REVENU E ON THIS ISSUE. WE, THEREFORE, UPHOLD THE FINDING OF THE LD . CIT (A) ON THIS ISSUE AND DISMISS THIS GROUND OF APPEAL OF THE DEPARTMENT. I.T.A. NO. 2263/DEL/2012 ASSESSMENT YEAR 2008-09 5.2 SIMILARLY, THE ISSUE RELATING TO DEPRECIATION ON THE CHEMICAL RECOVERY PLANT HAS BEEN DISCUSSED AT LENGT H IN PARA 6.5 AND 6.6 OF THE IMPUGNED ORDER WHICH ARE BEING R EPRODUCED HEREUNDER FOR A READY REFERENCE: - 6.5 I HAVE CAREFULLY CONSIDERED THE ASSESSMENT O RDER AND THE REMAND REPORT OF THE AO AND THE SUBMISSIONS MADE BY THE LD. AR ALONGWITH THE DOCUMENTS PLACED O N RECORD. I FIND THAT THE ADDITIONAL EVIDENCE SUBMITT ED BY THE APPELLANT ARE MERELY BY WAY OF FURTHER CORROBOR ATION OF THE CLAIM OF THE ASSESSEE MADE IN THE RETURN OF INCOME AND DURING ASSESSMENT PROCEEDING THAT THE SAID CHEMICAL RECOVERY PLANT HAD BEEN COMMISSIONED AND PUT TO USE DURING THE YEAR UNDER CONSIDERATION, THE REBY MAKING THE ASSESSEE ELIGIBLE FOR DEPRECIATION AND ADDITIONAL DEPRECIATION ON THE SAME AS PER RULES. FURTHER, THE SAID EVIDENCES WERE PROVIDED TO THE AO AND WERE DULY EXAMINED AND VERIFIED BY THE AO DURING TH E REMAND PROCEEDING. THE SAID EVIDENCES ARE ALSO RELA TED TO THE ISSUE ON WHICH THE ADDITION HAS BEEN MADE AN D THE GROUNDS OF APPEAL. IT IS ALSO SUBMITTED BY THE APPELLANT THAT THE SAID EVIDENCES COULD NOT BE PROD UCED DURING THE ASSESSMENT STAGE DUE TO PAUCITY OF TIME AS THE ASSESSMENT PROCEEDINGS WERE TAKEN UP BY HEARING S CONDUCTED ON 16.12.2010 TO 26.12.2010 AND THE DEPRECIATION ISSUE WAS RAISED BY THE AO AT THE VERY FAG END OF THE ASSESSMENT PROCEEDING. CONSIDERIN G THE I.T.A. NO. 2263/DEL/2012 ASSESSMENT YEAR 2008-09 ABOVE, THE SAID ADDITIONAL EVIDENCES ARE ADMITTED I N THE INTEREST OF NATURAL JUSTICE UNDER RULE 46A OF THE I .T. RULES, 1962. 6.6 COMING TO THE MERIT OF THE CASE, I FIND THAT THE AO HAS DISALLOWED THE ABOVE CLAIM OF DEPRECIATION BY T AKING A VIEW THAT THE CHEMICAL RECOVERY PLANT WAS NOT PUT TO USE DURING THE YEAR UNDER CONSIDERATION AS CERTAIN PARTS WERE STILL UNDER CONSTRUCTION / TESTING STAGE AS PE R DETAILS RETRIEVED FROM DETAILS OF ADDITION OF FIXE D ASSETS SUBMITTED BY THE ASSESSEE ON SAMPLE BASIS. HOWEVER, AS ARGUED BY THE ID. AR, THE TOTAL DEPRECIATION (IN CLUDING ADDITIONAL DEPRECIATION) CLAIMED BY THE ASSESSEE FO R THE ABOVE PLANT WAS RS.7,67,09,481/- WHICH INCLUDED DEPRECIATION ON FACTORY BUILDING AT RS.22,73,462/- AND DEPRECIATION ON PLANT AND MACHINERY AT RS.7,44,36,109/-. THE ASSESSING OFFICER HAS DISALLOWED THE DEPRECIATION ON PLANT AND MACHINERY, BUT HAS ALLOWED DEPRECIATION ON THE FACTORY BUILDING WH ICH IS PART AND PARCEL OF THE SAME CHEMICAL RECOVERY PL ANT. IT IS ARGUED BY THE LD. AR, BOTH THE BUILDING AND P LANT AND MACHINERY WERE COMPOSITELY COMPLETED AND PUT TO USE TOGETHER IN MARCH 2008. IT IS ARGUED THAT THE A OS ACTION IN PARTLY ALLOWING DEPRECIATION ON THE ABOVE FACTORY WHILE DISALLOWING DEPRECIATION ON THE REMAI NING PART IS BAD IN LAW AND FACTS. FURTHER, IT IS ARGUED BY THE LD. AR THAT THE SAID CHEMICAL RECOVERY PLANT WAS FU LLY COMMISSIONED ON 21.03.2008 AND IT STARTED ITS OPERATIONS FROM THE SAID DATE. THE SAID PLANT GENER ATED I.T.A. NO. 2263/DEL/2012 ASSESSMENT YEAR 2008-09 1823 TONNES OF STEAM AND 33 TONNES OF CAUSTIC SODA TOTALING RS.21,49,205/- DURING THE YEAR ENDED 31.03.2008. FURTHER, THE SAID EXPANSION PROJECT WAS APPRAISED AND FINANCED BY THE STATE BANK GROUP LED BY SBI WHICH APPOINTED M/S R.R. DEHRA & ASSOCIATES, AN INDEPENDENT FIRM OF CHARTERED ENGINEERS TO MONITOR THE IMPLEMENTATION OF ABOVE PROJECT AND TO SUBMIT PERIO DICAL REPORTS / CERTIFICATES WITH REGARD TO THE PROGRESS OF THE SAID PROJECT. A COPY OF THE REPORTS / CERTIFICATES DATED 30.04.2008 ISSUED BY THE ABOVE CHARTERED ENGINEER FIRM CERTIFYING THAT THE SAID PROJECT WAS COMMISSIO NED ON 21.03.2008 WAS FILED BEFORE THE AO DURING THE ASSESSMENT PROCEEDING, COPY OF WHICH IS FILED BY TH E APPELLANT AS PART OF THE PAPER BOOK. IT IS FURTHER ARGUED BY THE ID. AR THAT A COPY OF THE PUBLICATION REGARD ING STATUS OF IMPLEMENTATION OF THE ABOVE PROJECT AS PE R THE STOCK EXCHANGE AND SEBI GUIDELINES WAS ALSO SUBMITT ED BEFORE THE AO. FURTHER, COPY OF BOARD RESOLUTION OF THE ASSESSEE COMPANY DATED 29.04.2008 STATING THAT THE DATE OF COMMISSIONING OF THE CHEMICAL RECOVERY PLAN T WAS 21.03.2008 WAS ALSO FILED BEFORE THE AO. THE ASSESSEE HAS ALSO CHARGED IN ITS BOOK AN AMOUNT OF RS. 19,98,090/- AS DEPRECIATION ON THE ABOVE PLANT FOR THE PERIOD OF ONE MONTH AS PER THE COMPANIES ACT. COPIE S OF AL! THE BILLS RELATING TO ADDITION TO FIXED ASSETS INCLUDING MACHINERIES FOR THE ABOVE PLANT WERE PRODUCED BEFOR E THE AO. IT IS SUBMITTED BY THE ID. AR THAT THE AOS OBSERVATION THAT SOME ASSETS WERE STILL UNDER I.T.A. NO. 2263/DEL/2012 ASSESSMENT YEAR 2008-09 CONSTRUCTION / TESTING STAGE BASED ON SOME SAMPLES OF BILLS IS COMPLETELY ERRONEOUS AS THE SAID BILLS NOW HERE MENTIONED THAT THE ASSETS WERE AT CONSTRUCTION / TE STING STAGE. FURTHER, THE APPELLANT DURING THE APPELLATE PROCEEDING SUBMITTED COPY OF THE RELEVANT RECORDS O F THE CENTRAL EXCISE REGISTERS AND STATUTORY RETURNS FILE D WITH THE CENTRAL EXCISE DEPARTMENT FOR THE PURPOSE OF CE NVAT CREDIT AS WELL AS THE INWARD GATE PASSES (IGP) SHOW ING RECEIPT OF INCOMING MATERIALS / ITEMS IN THE FACTOR Y PREMISES. COPIES OF THE IGPS IN RESPECT OF ITEMS CONTAINED IN THE INVOICES MENTIONED BY THE AO IN TH E ASSESSMENT ORDER WERE ALSO SUBMITTED. AS MENTIONED EARLIER IN THIS ORDER, THE ABOVE DOCUMENTARY EVIDEN CES WERE FORWARDED TO THE AO DURING THE REMAND PROCEEDI NG FOR EXAMINATION. THE AO VIDE HIS REMAND REPORT DATE D 31.01.2012 HAS MENTIONED THAT HE HAS DULY VERIFIED THE STATUTORY EXCISE RETURNS FILED WITH THE CENTRAL EXC ISE DEPARTMENT ALONGWITH CENVAT CREDIT RECORDS WHEREIN THE SAID CENVAT CREDIT PERTAINING THE CHEMICAL RECOVERY PLANT (CRP) WAS ENTERED AND ALSO ITS CORRESPONDING ENTRIES IN THE EXCISE RECORDS - RG 23 C PART II (EN TRY BOOK OF DUTY CREDIT OF CAPITAL GOODS) AND TALLIED T HE SAME WITH THE CENTRAL EXCISE RECORDS, ORIGINAL INVOICES AND ORIGINAL IGPS. THE ORIGINAL IGPS WHICH ARE MADE AT THE TIME RECEIPT OF THE MATERIAL WERE ALSO PRODUCED BEF ORE THE AO DURING THE REMAND PROCEEDING AND WERE DULY VERIFIED BY HIM AND TALLIED WITH THE RELEVANT INVOI CES. THE AO HAS NOT MADE ANY ADVERSE COMMENT WHATSOEVER I.T.A. NO. 2263/DEL/2012 ASSESSMENT YEAR 2008-09 ON MERIT. CONSIDERING THE ABOVE, I FIND THAT THE IMPUGNED ADDITION OF RS.7,44,36,109/- MADE BY THE AO CANNOT BE SUSTAINED ON FACTS OR IN LAW. THE SAME I S, THEREFORE, DELETED. 5.3 THE FACTUAL FINDING OF THE LD. CIT)A) ON THIS ISSUE ALSO COULD NOT BE CONTROVERTED BY THE DEPARTMENT DURING THE PROCEEDINGS BEFORE US AND WE, THEREFORE, FIND NO RE ASON TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A) ON TH IS ISSUE AS WELL AND WHILE UPHOLDING THE SAME, WE DISMISS THIS GROUN D ALSO. 6. IN THE RESULT, THE APPEAL FILED BY THE DEPARTMEN T STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH MAY, 2017. SD/- SD/- (S.V. MEHROTRA) (SUDHANSHU SRIVASTAVA) VICE PRESIDENT JUDICIAL MEMBER DT. 11 TH MAY 2017 GS I.T.A. NO. 2263/DEL/2012 ASSESSMENT YEAR 2008-09 COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSTT. REGISTRAR