DDIT, CHENNAI V. M/s. Tamilnadu Energy Development Agency, CHENNAI

ITA 259/CHNY/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 51869 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 29-08-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 17-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVINASH K SAHAY DRIV
• Keywords: Depreciation; Maximum Marginal Rate
• Section: 143(3)

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL CHENNAI B BENCH, CHENNAI. BEFORE SHRI.U.B.S. BEDI, J.M. & SHRI. N.S. SAINI, A .M. I.T.A. NO. 259/MDS/2011 ASSESSMENT YEAR: 2007-08 THE DEPUTY DIRECTOR OF INCOME TAX (EXEMPTION) I), AAYAKAR BHAVAN, ANNEXE BUILDING, III FLOOR, 121, M.G. ROAD, NUNGAMBAKKAM, CHENNAI 600 034. VS. M/S. TAMILNADU ENERGY DEVELOPMENT AGENCY, EVK SAMPATH MALIGAI, COLLEGE ROAD, CHENNAI 600 006. [PAN:AAAAT0294J] (APPELLANT) (RESPONDENT) REVENUE BY : SHRI AVINASH K. SAHAY, DR. IV ASSESSEE BY : NONE DATE OF HEARING : 29.08.2011 DATE OF PRONOUNCEMENT 09.09.2011 ORDER PER U.B.S. BEDI, J.M. THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT(A) XII, CHENNAI DATED 24.11.2010 RELEVANT TO TH E ASSESSMENT YEAR 2007-08, WHEREBY LD. CIT(A)S ACTION IN DIRECTING THE ASSESS ING OFFICER TO ALLOW DEPRECIATION ON THE WHOLE OF EXPENDITURE INCURRED IN THE ACQUISI TION OF THE ASSETS AS A ONE-TIME ALLOWANCE AND HE OUGHT TO HAVE APPRECIATED THAT TWO ASSETS UNDER CONSIDERATION HAD BEEN CLAIMED IN EARLIER YEARS AND THE LD. CIT(A ) SHOULD NOT HAVE ALLOWED DEDUCTION UNDER SECTION 35(1)(IV) OF THE ACT THAT T OO ON EXPENDITURE INCURRED BY THE ASSESSEE NOT IN THE PREVIOUS YEAR RELEVANT TO THE Y EAR UNDER CONSIDERATION HAVE BEEN CHALLENGED. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE F ILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-08 ADMITTING EXCESS INCOME OVE R EXPENDITURE OF I II I.T.A. NO. .T.A. NO. .T.A. NO. .T.A. NO.259 259259 259/MDS/ /MDS/ /MDS/ /MDS/11 1111 11 2 ` .35,11,733/- AFTER CLAIMING EXEMPTION UNDER SECTION 10(21) OF THE ACT ON THE GROUND THAT THE ASSESSEE WAS APPROVED FOR THE PURPO SES OF SECTION 35(1)(II) AS SCIENTIFIC RESEARCH ASSOCIATION AND ASSESSMENT ORDE R UNDER SECTION 143(3) OF THE ACT WAS PASSED ON 12.10.2009 DETERMINING THE TAXABL E INCOME OF THE ASSESSEE AT ` .61,26,184/-. IN THE SAID ORDER, THE ASSESSING OFFI CER HAD BROUGHT THE EXCESS INCOME OVER EXPENDITURE TO TAX AND CHARGED THE SAME AT MAXIMUM MARGINAL RATE FOR THE REASONS THAT (I) APPROVAL U/S 35(1)(II) WAS RECEIVED ONLY UP TO THE ASSESSMENT YEAR 1997-98 AND THE SAME CANNOT BE CONS IDERED FOR THE YEAR IN QUESTION AND (II) THE CLAIM OF SET OFF OF BROUGHT F ORWARD LOSSES DUE TO THE FACT THAT THE ASSESSEE WAS COVERED UNDER SECTION 10(21) FOR E ARLIER YEARS DURING WHICH PERIOD ITS INCOME WAS EXEMPT. 3. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER , THE ASSESSEE TOOK UP THE MATTER IN APPEAL RAISING VARIOUS OBJECTIONS AND CON TENTION AND THE LD. CIT(A), WHILE CONSIDERING AND ELABORATELY DISCUSSING RELEVANT PRO VISIONS AND FACTS OF THE CASE, HAS PARTLY ALLOWED THE APPEAL AS PER FIRST PARA AT PAGE 4 OF THE IMPUGNED ORDER, WHICH READS AS UNDER: IN VIEW OF THE ABOVE, IT IS HELD THAT THE APPELLA NT IS ELIGIBLE FOR DEPRECIATION IN RESPECT OF ITS 15 KW SPV POWER PLAN T AND 4 KW SPV POWER PLANT SINCE THE SAME HAS NOT BEEN CLAIMED UP TO THE IMPUGNED YEAR, AS COULD BE SEEN FROM THE DETAILS OF CLAIM OF DEPRECIATION FILED AND HENCE, THE ASSESSING OFFICER IS DIRECTED TO ALL OW DEPRECIATION ON THE WHOLE OF EXPENDITURE INCURRED IN THE ACQUISITIO N OF THE ABOVE ASSETS AS A ONE-TIME ALLOWANCE AND REVISE THE IMPUGNED ORD ER ACCORDINGLY. 4. AGGRIEVED BY THIS ORDER OF THE LD. CIT(A), THE DEPARTMENT HAS CAME IN APPEAL AND THE LD. DR SIMPLY RELIED UPON THE GROUND S OF APPEAL. 5. DESPITE SENDING NOTICE WELL IN ADVANCE, THE ASS ESSEE DID NOT CHOOSE TO BE I II I.T.A. NO. .T.A. NO. .T.A. NO. .T.A. NO.259 259259 259/MDS/ /MDS/ /MDS/ /MDS/11 1111 11 3 PRESENT, THEREFORE, WE PROCEEDED TO DECIDE THIS CAS E AFTER HEARING THE LD. DR AND CONSIDERING THE MATERIAL ON RECORD. 6. AFTER HEARING THE LD. DR AND CONSIDERING THE MA TERIAL ON RECORD, WE FIND THAT THE LD. CIT(A) HAS PASSED VERY REASONED AND ELABORA TE ORDER TOUCHING ALL THE LEGAL ASPECTS IN THE LIGHT OF FACTS AND CIRCUMSTANCES OF THE CASE TO ALLOW PART CLAIM OF THE ASSESSEE, AS INCORPORATED IN EARLIER PARAGRAPH, NEI THER ANY CONTRARY MATERIAL HAS BEEN PLACED ON RECORD NOR ANY CONVINCING REASON HAS BEEN GIVEN BY THE LD. DR AND OTHERWISE, WE FIND THAT THE ORDER OF THE LD. CI T(A) IS JUST AND PROPER AND IT DOES NOT CALL FOR ANY INTERFERENCE AT THIS LEVEL. AS SUC H, WHILE CONCURRING WITH THE FINDING AND CONCLUSION OF THE LD. CIT(A), WE UPHOLD HIS ORD ER AND DISMISS THE APPEAL OF THE REVENUE BEING DEVOID OF ANY MERITS. 7. IN THE RESULT, THE APPEAL OF THE DEPARTMENT STA NDS DISMISSED. ORDER PRONOUNCED ON 09.09.2011. SD/- SD/- (N.S. SAINI) ACCOUNTANT MEMBER (U.B.S. BEDI) JUDICIAL MEMBER CHENNAI, DATED, THE 09.09.2011 VM/- TO: THE ASSESSEE//A.O./CIT(A)/CIT/D.R.