DCIT, Coimbatore V. M/s. Maple Renewable Power Pvt. Ltd., Coimbatore

ITA 2447/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7708 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 19-01-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 23-08-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: T RAGHUNATHAN
• Keywords: Depreciation

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI [CAMP @ COIMBATORE ] . . . , . , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ./ ITA NO. 2447/MDS/2016 / ASSESSMENT YEAR : 2012-13 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 1, COIMBATORE. V. M/S. MAPLE RENEWABLE POWER (P) LTD., 484, KAMARAJ ROAD, COIMBATORE PAN : AAHCM3979N ( ! /APPELLANT) ( '# ! /RESPONDENT) ! $ /APPELLANT BY : SHRI PATHLAVETH PEERYA, CIT '# ! $ /RESPONDENT BY : SHRI T. RAGHUNATHAN, CA $ /DATE OF HEARING : 19.01.2017 $ /DATE OF PRONOUNCEMENT : 28.02.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-1, COIMBATORE D ATED 31.05.2016 AND PERTAINS TO THE ASSESSMENT YEAR 2012 -13. THE ONLY ISSUE ARISES FOR CONSIDERATION IS DEPRECIATION CLAI MED BY THE ASSESSEE ON THE WINDMILL. 2 I.T.A. NO. 2447/MDS/2016 2. SHRI PATHLAVETH PEERYA, THE LD. DEPARTMENTAL REP RESENTATIVE SUBMITTED THAT ON VERIFICATION OF THE MATERIAL AVAI LABLE ON RECORD, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE CLAIMED D EPRECIATION TO THE EXTENT OF RS.65,44,88,362/- ON THE WINDMILL. THE A SSESSEE EXPLAINED BEFORE THE ASSESSING OFFICER THAT EVEN THOUGH THE C APITAL ASSET WAS ACQUIRED, THE NAME WAS NOT TRANSFERRED BY TNEB IMMED IATELY. REFERRING TO THE COPY OF THE AGREEMENT FOR TRANSFER OF THE WINDMILL WHICH IS AVAILABLE AT PAGE NO.1 OF THE PAPER BOOK, THE LD. D.R., SUBMITTED THAT CLAUSE -3 OF THE AGREEMENT CLEARLY S AYS THAT THE PHYSICAL POSSESSION OF THE WINDMILL SHALL BE HANDED OVER TO THE ASSESSEE ON 23 RD DECEMBER 2011 SUBJECT TO FULL PAYMENT OF LUMPSUM CONSIDERATION OF RS.24.93 CRORES AS STATED IN CLAUS E 5 OF THE AGREEMENT. IN FACT, THE PAYMENT WAS NOT MADE BY TH E ASSESSEE ON 23.11.2011, ON THE DATE OF THE AGREEMENT. UNLESS T HE PAYMENT WAS MADE BY THE ASSESSEE, THE PHYSICAL POSSESSION OF TH E WINDMILL WOULD NOT BE TRANSFERRED. THEREFORE THE ASSESSEE CANNOT B E CONSTRUED AS OWNER OF THE WINDMILL FOR THE PURPOSE OF CLAIMING D EPRECIATION. REFERRING TO THE ORDER OF THE CIT (APPEALS), THE LD . D.R., SUBMITTED THAT THE CIT (APPEALS) WITHOUT CONSIDERING THE AGREE MENT HAS SIMPLY PLACED HIS RELIANCE ON THE DECISION OF THIS BENCH O F THIS TRIBUNAL IN CIT V TUBE INVESTMENTS INDIA LTD, [2010] 131 TTJ 112 AND IN ACIT V BAGHMAR FINANCE LTD., [2012] 20 TAXMANN.COM 360 AND FOUND THAT 3 I.T.A. NO. 2447/MDS/2016 REGISTRATION OF THE OWNERSHIP BY TNEB HAS VERY LITTL E CONSEQUENCES FOR GRANT OF DEPRECIATION. ACCORDING TO THE LD. D.R., WHEN THE TRANSFER OF THE WINDMILL ITSELF WAS DISPUTED, THE CIT (APPEALS) HAS TO FIND OUT WHETHER THE WINDMILL WAS ACTUALLY TRANSFERRED TO TH E ASSESSEE AS PER THE AGREEMENT. THEREFORE, THE CIT (APPEALS) IS NOT J USTIFIED IN ALLOWING THE CLAIM OF THE ASSESSEE. 3. ON THE CONTRARY, SHRI T. RAGHUNATHAN THE LD. REPR ESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE WINDMILL WAS IN FAC T TRANSFERRED ON 23.12.2011 ON THE DATE ON WHICH THE AGREEMENT WAS E NTERED INTO. ACCORDING TO THE LD. REPRESENTATIVE, THE ENTIRE WIN DMILL DIVISION WAS TRANSFERRED AS A SLUMP SALE. REFERRING TO THE FINA NCIAL PERFORMANCE AND ANALYSIS WHICH WAS A PART OF THE ANNUAL REPORT, THE LD. REPRESENTATIVE SUBMITTED THAT DURING THE YEAR UNDER CONSIDERATION, THE VENTURE COMPANY SOLD 3 WINDMILLS. 2 WINDMILLS SITU ATED AT ANTHIYUR VILLAGE AND 1 AT MYWADI VILLAGE IN UDAMALPET DISTRI CT. REFERRING TO THE JUDGMENT OF THE MADRAS HIGH COURT IN MYSORE MINERAL S LTD V CIT [1999] 106 TAXMAN 166, THE LD. REPRESENTATIVE SUBMI TTED THAT WHEN THE ASSESSEE TOOK PHYSICAL POSSESSION OF THE WINDMI LL AND EXERCISING DOMAIN OVER THE WINDMILL EXCLUDING OTHERS, THE ASSE SSEE IS ENTITLED FOR DEPRECIATION EVEN THOUGH, THE SAME WAS NOT REGISTER ED BY TNEB. THEREFORE, THE CIT (APPEALS) HAS RIGHTLY FOUND THAT T HE ASSESSEE TOOK 4 I.T.A. NO. 2447/MDS/2016 PHYSICAL POSSESSION OF THE PROPERTY AFTER PAYING TH E SALE CONSIDERATION BEFORE 31.03.2012. THE REVENUE FROM ELECTRICITY GEN ERATION FROM THE WINDMILL IS ALSO RECOGNIZED IN THE BOOKS OF ACCOUNT S. THEREFORE THE CIT (APPEALS) HAS RIGHTLY ALLOWED THE CLAIM OF THE A SSESSEE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESS ING OFFICER DISALLOWED THE CLAIM OF DEPRECIATION ON THE GROUND THAT THE ASSET WAS NOT IN THE NAME OF THE ASSESSEE DURING THE YEAR UND ER CONSIDERATION. WE HAVE CAREFULLY GONE THROUGH THE ORDER OF THE ASS ESSING OFFICER. THE ASSESSEE EXPLAINED BEFORE THE ASSESSING OFFICER THAT THE WINDMILL WAS ACQUIRED THROUGH SLUMP SALE. THE WINDMILL WAS T AKEN POSSESSION BY THE COMPANY IMMEDIATELY. FOR THE PURPOSE OF CLA IMING DEPRECIATION, THE ASSET SHALL BE OWNED BY THE ASSES SEE EITHER WHOLLY OR PARTIALLY, AND IT ALSO BE USED FOR THE PURPOSE O F BUSINESS AND PROFESSION OF THE ASSESSEE. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE IS NOT THE OWNER OF THE WINDMILL, SINCE TH E SAME WAS NOT REGISTERED BY TNEB IN ITS NAME. THE AGREEMENT SAID TO HAVE BEEN ENTERED CLEARLY SAYS THAT THE PHYSICAL POSSESSION O F THE WINDMILL SHALL BE HANDED OVER TO THE ASSESSEE ON 23.12.2011 SUBJEC T TO FULL PAYMENT OF LUMPSUM CONSIDERATION OF RS.24.93 CRORES. THEREF ORE HANDING OVER OF THE WINDMILL TO THE ASSESSEE WAS SUBJECT TO PAYM ENT OF RS.24.93 5 I.T.A. NO. 2447/MDS/2016 CRORES. THE ASSESSEE HAS TO NOW ESTABLISH THAT THE WINDMILL WAS HANDED OVER TO THE ASSESSEE PHYSICALLY ON 23.12.201 1. AS RIGHTLY SUBMITTED BY THE LD. D.R., WHAT IS TO BE SEEN IS WH ETHER THE ASSESSEE BECOMES THE BENEFICIAL OWNER OF THE WINDMILL IN EXC LUSION OF OTHERS. IF THE ASSESSEE ACQUIRED THE RIGHTLY AND DOMAIN OVER T HE WINDMILL, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT MERELY BE CAUSE IT WAS NOT REGISTERED BY TNEB AND TRANSFER OF NAME WAS NOT EFFE CTED BY TNEB, THAT CANNOT BE A REASON FOR DISALLOWING THE CLAIM O F THE ASSESSEE. WHAT IS TO BE SEEN IS WHETHER THE ASSESSEE HAS TAKE N PHYSICAL CONTROL OF THE WINDMILL AS A BENEFICIAL OWNER. SINCE, THE DETAILS OF PAYMENT OF RS.24.93 CRORES AND THE TAKING OVER OF POSSESSION I S NOT AVAILABLE ON RECORD, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE REEXAMINED BY THE ASSESSING OFFICER. ACCORD INGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ENTIRE CLAIM OF DEPRECIATION IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFIC ER. THE ASSESSING OFFICER SHALL CONSIDER THE MATTER AFRESH AND FIND O UT WHETHER THE ASSESSEE HAS TAKEN POSSESSION OF THE WINDMILL ON 23 .12.2011 AS CLAIMED AND THEREAFTER DECIDE THE ISSUE AFRESH IN T HE LIGHT OF JUDGMENT OF THE APEX COURT IN MYSORE MINERALS LTD ., SUPRA AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. 6 I.T.A. NO. 2447/MDS/2016 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 28 TH FEBRUARY, 2017 AT CHENNAI. SD/- SD/- ( . ) ( . . . ) (ABRAHAM P. GEORGE) (N.R.S. GAN ESAN) / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, /DATED, THE 28 TH FEBRUARY, 2017. JR. $ ' % & % /COPY TO: 1. ! /APPELLANT 2. '# ! /RESPONDENT 3. '() ( )/CIT(A)-1, COIMBATORE 4. '() /CIT 5. ' % /DR 6. *+ /GF.