Ransar Industries Ltd., CHENNAI V. DCIT, Coimbatore

ITA 2319/CHNY/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7838 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2017
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 05-01-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 15-09-2014
• Court: TRIBUNAL
• Department Lawyers: R DURAI
• Assessee Lawyers: A S SRIRAMAN
• Keywords: Depreciation; Additional depreciation; Difference of opinion; Change of opinion

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: CHENNAI . . . , ! ' .. # $!% , ' () BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S.SUNDER SINGH, ACCOUNTANT MEMBER ! ./ ITA NO.2319/MDS/2014 * +* /ASSESSMENT YEAR: 2005-06 M/S.RANSAR INDUSTRIES LTD., (SINCE MERGED WITH C.R.I. PUMPS (P) LTD.), NO.17, AVARAMPALAYAM ROAD, GANAPATHY, COIMBATORE-641 006. [PAN: AABCR 2862 H] VS. THE DY. COMMISSIONER OF INCOME TAX, COMPANY CIRCLE- IV(2), 63, RACE COURSE ROAD, COIMBATORE-641 018. ( ,- /APPELLANT) ( ./,- /RESPONDENT) ,- 0 1 / APPELLANT BY : MR.A.S.SRIRAMAN, ADV. ./,- 0 1 /RESPONDENT BY : MR.R.DURAIPANDIAN, JCIT # 0 2' /DATE OF HEARING : 05.01.2017 34+ 0 2' /DATE OF PRONOUNCEMENT : 31.01.2017 / O R D E R PER D.S.SUNDER SINGH , ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER DATED 06.08.2014 OF COMMISSIONER OF INCOME TAX (APPEALS) -1, CHENNAI, IN ITA NO.221/13-14 FOR THE AY 2005-06. ITA NO.2319/MDS/2014 :- 2 -: 2.0 GROUND NOS.(I) & (VIII) ARE GENERAL IN NATURE WHIC H DO NOT REQUIRE SPECIFIC ADJUDICATION. 3.0 GROUND NO.(II) IS RELATED TO THE NOTICE ISSUED U/S .148 OF INCOME TAX ACT (IN SHORT THE ACT). THE ASSESSMENT IN THIS C ASE WAS COMPLETED BY AN ORDER DATED 25.03.2013 U/S.143(3) R.W.S.147 OF THE ACT. THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS AO) HAS COMMU NICATED THE REASONS FOR RE-OPENING OF THE ASSESSMENT WHICH WAS DISCUSSED IN THE ASSESSMENT ORDER AS UNDER: ON PERUSAL OF RECORDS IT WAS FOUND THAT THE ASSESS EE COMPANY HAS CLAIMED HUGE DEPRECIATION ON WINDMILL. THE CLAIM OF ADDITIONAL D EPRECIATION OF RS. 89,81,651/- INCLUDES ADDITIONAL DEPRECIATION FOR THE ASSETS FOR WHICH DE PRECIATION / ADDITIONAL DEPRECIATION HAVE ALREADY BEEN CLAIMED DURING THE EARLIER ASSESSMENT YEARS. AS SEEN FROM THE DETAILED STATEMENT OF DEPRECIATIO N FOR THE A.Y 2005-06, ADDITIONAL DEPRECIATION HAS BEEN CLAIMED IN RESPECT OF THE ASS ETS FORMING PART OF THE OPENING WDV. ADDITIONAL DEPRECIATION IS NOT ALLOWABLE IN RESPECT OF THE OLD PLANT AND MACHINERY. ADDITIONAL DEPRECIATION IS ALLOWABLE ONLY ON THE NE W ASSETS ACQUIRED AND INSTALLED DURING THE P.Y RELEVANT TO THE A.Y I.E., IS ALLOWABLE ONLY IN THE YEAR OF ACQUISITION AND USE AND NOT YEAR AFTER YEAR THE WDV. HENCE, THERE ARE REASONS TO BELIEVE THAT THE INCOM E HAS ESCAPED ASSESSMENT DUE TO INAPPROPRIATE CLAIM OF DEPRECIATION ON WINDMILL. HENCE, THE ASSESSMENT IS REOPENED U/S.147 OF THE INCOME TAX ACT. 4.0 THE RE-ASSESSMENT WAS COMPLETED ON A TOTAL INCOME OF RS.14,85,07,372/- DISALLOWING THE ADDITIONAL DEPREC IATION ON WIND MILL AMOUNTING TO RS.3,24,38,932/-. THE ASSESSEE WENT O N APPEAL BEFORE THE CIT(A) AND LEARNED COMMISSIONER OF INCOME TAX(APPEA L) [HEREINAFTER REFERRED TO AS LD.CIT(A)] CONFIRMED THE ADDITION ON ACCOUNT OF ADDITIONAL DEPRECIATION AND ALLOWED THE NORMAL DEPRECIATION ON WIND MILL. HOWEVER, BEFORE THE LD.CIT(A) IN GROUND NO.2, THE ASSESSEE H AS CHALLENGED THE VALIDITY OF RE-OPENING THE ASSESSMENT, AS A CHANG E OF OPINION WHICH WAS ITA NO.2319/MDS/2014 :- 3 -: NOT ADJUDICATED BY THE LD.CIT(A). THEREFORE, THE A SSESSEE FILED APPEAL BEFORE THIS TRIBUNAL CHALLENGING THE VALIDITY OF RE -OPENING OF ASSESSMENT AND RELIEF FOR CLAIM OF ADDITIONAL DEPRECIATION. TH E LD.A.R ARGUED THAT THE ISSUE REGARDING THE ALLOWABILITY OF DEPRECIATION WA S EXAMINED BY THE AO IN ORIGINAL ASSESSMENT AND ON THE SAME ISSUE, THE ASSE SSMENT WAS REOPENED WHICH IS A MERE CHANGE OF OPINION AND NOT PERMITTE D AS PER LAW. THIS GROUND WAS RAISED BEFORE THE LD.CIT(A) AND THE LD.C IT(A) HAS PASSED THE ORDER WITHOUT ADJUDICATING THE GROUND NO.2. THEREF ORE, THE LEARNED AUTHORIZED REPRESENTATIVE (HEREINAFTER REFERRED TO AS LD.AR) ARGUED THAT THE CASE SHOULD GO BACK TO THE FILE OF THE LD.CIT(A ) TO DECIDE THE ISSUE REGARDING RE-OPENING OF ASSESSMENT. ON THE OTHER HA ND LD.D.R RELIED ON THE LOWER AUTHORITIES ORDERS. 5.0 WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MAT ERIAL PLACED ON RECORD. WE HAVE OBSERVED THAT THE ASSESSEE HAS RAISED THE GROUND OF VALIDITY OF RE-OPENING OF ASSESSMENT BEFORE THE CIT (A) AND THE LD.CIT(A) HAS NOT ADJUDICATED THE GROUND. THEREFORE, WE REMIT THE MATTER BACK, TO THE FILE OF THE LD.CIT(A) WITH A DIRECTION TO ADJUD ICATE THE VALIDITY OF ISSUE OF NOTICE U/S.148 AND PASS ORDERS AFRESH. ACCORDIN GLY, WE SET-ASIDE THE ORDERS OF THE LD.CIT(A) AND ISSUE REMITTED TO THE F ILE OF THE CIT(A). ITA NO.2319/MDS/2014 :- 4 -: 6.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST JANUARY, 2017, AT CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( ' . . # $!% ) (D.S.SUNDER SINGH) ' /ACCOUNTANT MEMBER /CHENNAI, 5! /DATED: 31 ST JANUARY, 2017. TLN 0 .2$6 76+2 /COPY TO: 1. ,- /APPELLANT 4. # 82 /CIT 2. ./,- /RESPONDENT 5. 6 9 .2 /DR 3. # 82 ( ) /CIT(A) 6. * < /GF