K.U.Sodalamuthu and Co (P) Ltd., CHENNAI V. ITO, Coimbatore

ITA 2355/CHNY/2015

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 9422 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 07-06-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 31-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S SRIDHAR
• Keywords: Depreciation; Set aside

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , ! ' # , % #& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ ITA NO.2355/CHNY/2015 ) *) / ASSESSMENT YEAR : 2012-13 M/S K.U. SODALAMUTHU & CO.(P) LTD., 428, METTUPALAYAM ROAD, COIMBATORE 641 043. PAN : AAACK 7236 M V. THE INCOME TAX OFFICER, CORPORATE WARD 2, COIMBATORE. (,-/ APPELLANT) (./,-/ RESPONDENT) ,- 0 1 / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE ./,- 0 1 / RESPONDENT BY : SHRI AR.V. SREENIVASAN, JCIT 2 0 3% / DATE OF HEARING : 22.10.2019 45* 0 3% / DATE OF PRONOUNCEMENT : 29.11.2019 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -1, COIMBATORE , DATED 28.10.2015 AND PERTAINS TO ASSESSMENT YEAR 2012-13. 2. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSEE , SUBMITTED THAT THE ASSESSEE CLAIMED DEPRECIATION AT THE RATE OF 40 % IN THE BOOKS OF ACCOUNT AS AGAINST THE MINIMUM RATE OF 15.33% PRESC RIBED UNDER 2 I.T.A. NO.2355/CHNY/15 COMPANIES ACT, 1956. ACCORDING TO THE LD. COUNSEL, THIS TRIBUNAL EXAMINED THIS ISSUE IN I.T.A. NOS.936 & 937/MDS/201 5 DATED 25.10.2016 AND FOUND THAT WHAT WAS PRESCRIBED UNDER THE COMPAN IES ACT, 1956 IS ONLY MINIMUM DEPRECIATION. THERE WAS NO BAR UNDER THE COMPANIES ACT, 1956 TO CHARGE HIGHER DEPRECIATION. PLACING RELIAN CE ON THE CIRCULAR ISSUED BY MINISTRY OF INDUSTRY IN CIRCULAR NO.2 OF 1989 DATED 07.03.1989, THE LD.COUNSEL SUBMITTED THAT THE CIRCULAR CLARIFIE D THAT THE ASSESSEE IS ENTITLED TO PROVIDE HIGHER DEPRECIATION IN THE BOOK S ON THE BASIS OF THE TECHNOLOGICAL RISK PERCEIVED BY THE MANAGEMENT. TH EREFORE, ACCORDING TO THE LD. COUNSEL, THE CIT(APPEALS) IS NOT JUSTIFI ED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER. ON A QUERY FROM TH E BENCH WHEN THE ASSESSEE COULD CLAIM HIGHER RATE OF DEPRECIATION ON THE BASIS OF TECHNOLOGICAL REPORT, WHETHER ANY TECHNOLOGICAL REP ORT WAS PROVIDED OR FURNISHED BEFORE THE ASSESSING OFFICER? THE LD.COU NSEL SUBMITTED THAT THE TECHNOLOGICAL REPORT WAS AVAILABLE BUT IT WAS N OT IMMEDIATELY AVAILABLE TO PRODUCE BEFORE THE TRIBUNAL. THEREFOR E, THE LD.COUNSEL SUBMITTED THAT THE MATTER MAY BE REMITTED BACK TO T HE FILE OF THE ASSESSING OFFICER FOR RECONSIDERATION. 3. WE HEARD SHRI AR.V. SREENIVASAN, THE LD. DEPARTM ENTAL REPRESENTATIVE ALSO. ACCORDING TO THE LD. D.R., ON THE BASIS OF TECHNOLOGICAL REPORT, THE ASSESSEE MAY CLAIM HIGHER DEPRECIATION OVER AND ABOVE 15.33%. HOWEVER, IN THIS CASE, ACCORDING TO THE LD. D.R., 3 I.T.A. NO.2355/CHNY/15 TECHNOLOGICAL REPORT WAS NOT FILED AND DEPRECIATION AT THE RATE OF 40% WAS CLAIMED BEFORE THE ASSESSING OFFICER ON THE BASIS O F AUDITORS REPORT, THEREFORE, THE CIT(APPEALS) HAS RIGHTLY CONFIRMED T HE ORDER OF THE ASSESSING OFFICER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. FROM THE CIRCULAR OF MINISTRY OF INDUSTRY, IT IS OBVIOUS THAT THE ASSESS EE MAY CLAIM HIGHER DEPRECIATION OVER AND ABOVE 15.33% PRESCRIBED UNDER THE COMPANIES ACT, 1956 ON THE BASIS OF TECHNOLOGICAL EVOLUTION R EPORT. IN THIS CASE, EVEN THOUGH THE ASSESSEE CLAIMS THAT A TECHNOLOGICA L EVOLUTION REPORT WAS AVAILABLE, THERE IS NO EVIDENCE TO SUGGEST THAT IT WAS FILED EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE CIT(APPE ALS). IT IS ALSO NOT FILED BEFORE THIS TRIBUNAL. CONSIDERATION OF TECHN OLOGICAL REPORT IS ESSENTIAL FOR ALLOWING HIGHER RATE OF DEPRECIATION. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE RE-EXAMINED BY THE ASSESSING OFFICER. ACCORDINGLY, ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE ENTIRE ISSUE RAISED BY THE AS SESSEE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSIN G OFFICER SHALL RE- EXAMINE THE MATTER ON THE BASIS OF TECHNOLOGICAL EV OLUTION REPORT WHICH MAY BE FILED BY THE ASSESSEE AND THEREAFTER DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW, AFTER GIVING A REASONABLE OPPO RTUNITY TO THE ASSESSEE. 4 I.T.A. NO.2355/CHNY/15 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 29 TH NOVEMBER, 2019 AT CHENNAI. SD/- SD/- ( ! ' # ) ( . . . ) (INTURI RAMA RAO) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 7 /DATED, THE 29 TH NOVEMBER, 2019. KRI. 0 .389 :9*3 /COPY TO: 1. ,- /APPELLANT 2. ./,- /RESPONDENT 3. 2 ;3 () /CIT(A)-1, COIMBATORE 4. PRINCIPAL CIT- 1, COIMBATORE 5. 9< .3 /DR 6. =) > /GF.