The DCIT, Circle-4, Ahmedabad V. Gujarat Mineral Development Corporation Ltd., Ahmedabad

ITA 2423/AHD/2015

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5436 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 13-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RC DANDEY
• Assessee Lawyers: S N SOPARKAR
• Keywords: Depreciation; Additional depreciation; Revised return; Capital expenditure
• Section: 143(3); 201; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER THE DCIT, CIRCLE - 2(1)(1), AHMEDABAD (APPELLANT) VS GUJARAT MINERAL DEVELOPMENT CORPORATION LTD., KHANJI BHAVAN , 132 FEET RING ROAD, NR. UNIVERSITY GROUND VASTRAPUR, AHMEDABD - 380052 PAN: AAACG7987P (RESPONDENT) REVENUE BY : S H RI R.C. DANDEY , CIT - D . R. ASSESSEE BY: SHRI S.N. SOPARKAR, A.R. DATE OF HEARING : 25 - 10 - 2 018 DATE OF PRONOUNCEMENT : 31 - 10 - 2 018 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS REVENUE S APPEAL FOR A. Y. 2009 - 10 , ARI SES FROM ORDER OF THE CIT(A) - 2, AHMEDABAD DATED 20 - 05 - 2 015 , IN PROCEEDINGS UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE SOLITARY GROUND OF APPEAL IS THAT RETURN OF INCOME DECLARING INCOME OF RS. 362 , 21 , 47 , 890/ - WAS FILED ON 26 TH SEP, 2009. SUBSEQUENTLY , REVISED RETURN OF INCOME WAS FILED ON 27 - 09 - 2010 DECLARING INCOME AT RS. 371 , 86 , 0089/ - . THE ASSESSMENT U/S. 143(3) OF T HE ACT WA S COMPLETED ON 25 TH NOV, 2011 AND TOTAL I T A NO . 2423 / A HD/20 15 A SSESSMENT YEAR 200 9 - 10 I.T.A NO. 2423 /AHD/20 15 A.Y. 2009 - 10 PAGE NO D CIT VS. GUJARAT MINERAL DEVELOPMENT CORPORATION LTD. 2 INCOME WAS DETERMINED AT RS. 375 , 34 , 28 , 050/ - . SUBSEQUENTLY , THE CASE OF THE ASSESSEE WAS REOPENED U/S. 147 OF THE ACT ON THE GROUND THAT ASSESSEE HAS WRONGLY CLAIMED ADDITIONAL DEPRECIATION AMOUNTING TO RS. 109 , 04 , 3 35/ - . IN RESPONSE TO THE NOTICE U/S. 148 OF THE ACT , THE ASSESSEE HAS FILED REVISED RETURN OF INCOME ON 11 TH APRIL, 2014 DECLARING TOTAL INCOME AT RS. 371 , 81 , 60 , 080/ - . THEREFORE, ON THE BASIS OF VERIFICATION ON RECORD, THE ASSESSING OFFICER HAS STATED TH AT ASSESSEE HAS CLAIMED ADDITIONAL DEPRECIATION ON ROAD TRANSPORT VEHICLE LIKE WATER TANK, TIPPERS, DUMPERS ETC. AND OBSERVED THAT THE CLAIM OF ADDITIONAL DEPRECIATION OF T HE ASSSESSEE WAS IRREGULAR, THEREFORE, HE HAS WITHDRAWN THE ADDITIONAL DEPRECIATION AND DISALLOWED THE S AME AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 3. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE. THE RELEVANT PART OF THE DECISION OF THE LD. CIT(A) IS REPRODUCED AS UNDER: - 2.3. DECISION: 1 HAVE CAREFULLY PERUSED THE ORDER AND SUBMISSION MADE BY THE AR OF THE APPELLANT. THE ISSUE IS COVERED BY THE DECISION GIVEN BY ME IN APPELLANT'S OWN CASE FOR A. Y. 2010 - 11, VIDE ORDER IN APPEAL NO. CIT(A) - 2/DCIT, CIR. 4/174/ 2013 - 14 DATED 29/01/2015. FOR THE SAKE OF CLARITY, THE RELEVANT PORTION OF THE DECISION IS REPRODUCED HEREUNDER: - 'THE AO HAS DISALLOWED THE ADDITIONAL DEPRECIATION CLAIMED BY THE APPELLANT ON PLANT AND MACHINERY. THE AO HAS HELD THAT SINCE THE DEPRECIATIO N WAS NOT ALLOWABLE ON PARTS OF IMPORTANT/ESSENTIAL PARTS OF PLANT AND MACHINERY, TRANSPORT VEHICLE AND ON OFFICE APPLIANCES, THE CLAIM WAS NOT ADMISSIBLE. THE APPELLANT ON THE OTHER HAND HAS SUBMITTED THAT ADDITIONAL DEPRECIATION HAS NOT BEEN CLAIMED BY I T ON GENERATION OF PLANT AND MACHINERY BUT THE SAME HAS BEEN CLAIMED ON THE PLANT AND MACHINERY WHICH ARE USED IN THE MINING ACTIVITY. THE SAME HAS BEEN CLAIMED ONLY ON MINING MACHINERY AND VEHICLES USED IN MINING ACTIVITY. THE APPELLANT HAS ALSO SUBMITTED A LIST OF MINING MACHINERY ON WHICH THE , ADDITIONAL DEPRECIATION HAS BEEN CLAIMED. ON A CAREFUL CONSIDERATION OF ENTIRE FACTS OF THE CASE, IF IS NOTED THAT THE CLAIM OF THE APPELLANT APPEARS TO BE ALLOWABLE. THE ADDITIONAL DEPRECIATION WHICH HAS BEEN CL AIMED BY IT IS ON THE MINING MACHINERY AND VEHICLES USED IN MINING ACTIVITY. THE MINING ACTIVITY IS CONSIDERED AS A MANUFACTURING ACTIVITY AND, THEREFORE, AS PER THE PROVISIONS OF THE ACT, THE ADDITIONAL DEPRECIATION WOULD BE ALLOWABLE. THE APPELLANT HAS C LAIMED DEPRECIATION ON VEHICLES LIKE HYDRAULIC EXCAVATOR, BULLDOZER WHICH ARE USED FOR THE PURPOSE OF DIGGING MINES AND NOT FOR THE ROAD TRANSPORTATION. THE APPELLANT HAS GIVEN A LIST AND RECONCILIATION OF THE ADDITIONAL DEPRECIATION CLAIMED. THE DISALLOWA NCE IS, THEREFORE, DIRECTED TO BE DELETED.' THE GROUND OF APPEAL IS ACCORDINGLY ALLOWED.' I.T.A NO. 2423 /AHD/20 15 A.Y. 2009 - 10 PAGE NO D CIT VS. GUJARAT MINERAL DEVELOPMENT CORPORATION LTD. 3 IN VIEW OF THE ABOVE FINDINGS, AND SINCE, THE FACTS AND BASIS OF THE DECISION OF THE AO FOR THE PRESENT YEAR ARE ALSO IDENTICAL, THE ADDITION MADE BY THE AO ON ACCOU NT OF ADDITIONAL DEPRECIATION OF RS. 1,09,04,335/ - IS HEREBY DIRECTED TO BE DELETED. THE GROUND OF APPEAL IS ACCORDINGLY ALLOWED. 4. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. THE ASSESSING OFFICER HAD DISALLOWED THE C LAIM OF ADDIT IONAL DEPRECIATION OF THE ASSESSSEE ON THE DUMPERS, DIESEL B USE S , LOADER TIPPERS, WATER TANKER ETC. BY TREATING THE SAME AS ROA D TRANSPORT VEHICLES . IN THI S RE GARD , IT IS NOTICED THAT THE ASSESSEE HAS U S ED EQUIPMENT IN THE MINING ACTIVITIES AND THESE EQUI PMENTS W ERE U S ED FOR PICKING UP TRANSPORTING EXCAVATED MATERIAL IN MINING AREA AS PART AND PARCEL OF PLANT AN D MACHINERY. THE LD. COUNSEL HAS BROUGHT TO OUR NOTICED A T THE T I ME O F APPELLATE PROCEEDINGS THAT IDENTICAL ISSUE ON SIMILAR FA C T IN THE C A S E OF TH E ASSSSSEE ITSELF HAS BEEN DECIDED BY THE CO - ORDINATE BENCH OF THE ITAT AHMEDAB AD VIDE ITA NO. 3010/AHD/2014 DATED 13/12/2017 IN FAVOUR OF THE ASSESSEE. RELEVANT PART OF THE DECISION OF CO - ORDINATE BENCH OF ITAT IS REPRODUCED AS UNDER: - 8. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORDERS OF THE AUTHORITIES BELOW. THERE IS NO DISPUTE THAT THE ASSESSEE HAS PURCHASED CERTAIN SPARE PARTS IN RESPECT OF THE MACHINERY WHICH IS USED FOR THE PURPOSE OF POWER GENERATION UNITS. WE FURTHER FIND THAT THE PURCHA SE OF SPARE PARTS FOR THE MACHINERY WAS TREATED AS CAPITAL EXPENDITURE AND, THEREFORE, MAKES THE ASSESSEE ELIGIBLE FOR CLAIM OF DEPRECIATION AND ALSO THE CLAIM OF ADDITIONAL DEPRECIATION ON THE SAME. WE, THEREFORE, DO NOT FIND ANY ERROR OR INFIRMITY IN THE FINDINGS OF THE CIT(A). IN THE LIGHT OF THE ABOVE FACTS AND RESPECTFULLY THE FOLLOWING DECISION OF THE CO - ORDINATE BENCH, WE DO NOT FIND ANY ERROR IN THE DECISION OF THE LD. CIT(A). THEREFORE , THE APPEAL OF THE REVENUE IS DISMISSED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED . ORDER PR ONOUNCED IN THE OPEN C OURT ON 3 1 - 10 - 201 8 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER I.T.A NO. 2423 /AHD/20 15 A.Y. 2009 - 10 PAGE NO D CIT VS. GUJARAT MINERAL DEVELOPMENT CORPORATION LTD. 4 AHMEDABAD : DATED 31 /10 /2018 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,