Dy. Commissioner of Income Tax , Circle-17(1), Hyderabad V. Fenoplast Limited, Secunderabad

ITA 262/Hyd/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 8597 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB-B
• Assessment Year: 2009-2010
• Appeal Filed On: 28-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: B SATYANARAYANA MURTHY
• Keywords: Depreciation; Additional depreciation
• Section: 32(1)(iia)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER I.T.A. NO. 262/HYD/2019 ASSESSMENT YEAR: 2009-10 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-17(1), HYDERABAD VS M/S.FENOPLAST LIMITED, SECUNDERABAD [PAN: AAACF3076C] (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI ROHIT MUJUMDAR, DR FOR ASSESSEE : SHRI B.SATYANARAYANA MURTHY, AR DATE OF HEARING : 05-01-2021 DATE OF PRONOUNCEMENT : 11-01-2021 O R D E R PER BENCH : THIS REVENUES APPEAL FOR AY.2009-10 ARISES FROM THE CIT(A)-5, HYDERABADS ORDER DATED 20-12-2018 PASSED IN CASE NO.0013/2015-16/CIT(A)-5, IN PROCEEDINGS U/S.143(3) R.W.S.147 OF THE INCOME TAX ACT, 1961 [IN SHORT, THE A CT]. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THE REVENUE HAS RAISED THE FOLLOWING SUBSTANTIVE GROUNDS IN THE INSTANT APPEAL: 2.WHETHER, IN VIEW OF FACTS AND LAW, THE LD.CIT(A) IS CORRECT IN ALLOWING THE ADDITIONAL DEPRECIATION WITHOUT CONSID ERING THE FACT THAT SOME ASSETS ARE OLD AND USED. ITA NO. 262/HYD/2019 :- 2 -: 3.WHETHER, IN VIEW OF FACTS AND LAW, THE LD.CIT(A) IS CORRECT IN TREATING THE RE-OPENING AS BAD IN LAW WHEN SECTION 32(1)(IIA) OF THE INCOME TAX ACT, 1961 CLEARLY STIPULATES CONDITIONS REGARDING CLAIM OF ADDITIONAL DEPRECIATION OF ANY NEW MACHINERY OR PLA NT (OTHER THAN SHIPS AND AIRCRAFT) WHICH HAS BEEN ACQUIRED AND INS TALLED AFTER 31 ST MARCH 2005. THE CAPITAL WORK-IN-PROGRESS AS ON 31-0 3-2008 WAS CAPITALIZED DURING THE YEAR RELEVANT TO A.Y.2009-10 AND HENCE THE PLANT AND MACHINERY WERE NOT READY FOR USE TILL SUC H CAPITALIZATION. THEREFORE, PUT TO USE OR READY TO USE TILL SUCH TIM E DOES NOT ARISE. 3. LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY CONTENDED DURING THE COURSE OF HEARING THAT THE ASSESSI NG OFFICER HAD RIGHTLY DISALLOWED THE ASSESSEES ADDITION AL DEPRECIATION CLAIMED OF RS.2,44,40,168/- @20% ON THE CAPITAL WORK IN PROGRESS OF RS.12,22,00,842/- IN PLANT & MAC HINERY BLOCK. HE EMPHASISED THE ASSESSING OFFICERS REASON ING VIDE ORDER DT.03-03-2015 THAT SINCE THE ASSESSEE HAD NOT PUT TO USE ANY NEW ASSET DURING THE RELEVANT PREVIOUS YEAR, I TS IMPUGNED DEPRECIATION CLAIM PERTAINING TO PLANT & MACHI NERY ALREADY PUT TO USE IN THE EARLIER ASSESSMENT YEARS IS N OT ENTITLED FOR THE DEPRECIATIONS IN ISSUE. 4. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO THE REVENUES FOREGOING ARGUMENT. WE FIND NO MERIT TO ACC EPT THE SAME. HON'BLE MADRAS HIGH COURT DECISION IN BRAKES INDIA LTD. VS. DCIT, TAX APPEAL NO.551/2013, DT.14-03-2007 HAS ALREADY REVERSED THE TRIBUNALS ORDER TO THIS EFFECT AC CEPTING THE REVENUES STAND. WE THUS HOLD THE ASSESSEES AS ENT ITLED FOR THE IMPUGNED ADDITIONAL DEPRECIATION CLAIM QUA ASSETS ALREADY PUT TO USE AS WELL. THE SAME THEREFORE COULD N OT HAVE BEEN FORMED THE ASSESSING OFFICERS REASON TO BE THE TA XABLE INCOME HAVING ESCAPED ASSESSMENT THEREBY TRIGGERING S ECTION 148/147 MECHANISM IN MOTION. WE THUS FIND NO MERIT IN THE ITA NO. 262/HYD/2019 :- 3 -: REVENUES INSTANT SOLE SUBSTANTIVE GRIEVANCE AS WELL AS IN THE MAIN APPEAL. 5. THIS REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH JANUARY, 2021 SD/- SD/- (LAXMI PRASAD SAHU) (S.S.GO DARA) ACCOUNTANT MEMBER JUDICIAL MEM BER HYDERABAD, DATED: 11-01-2021 TNMM ITA NO. 262/HYD/2019 :- 4 -: COPY TO : 1.THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-17( 1), HYDERABAD. 2.M/S.FENOPLAST LIMITED, D.NO.306-8, CHENOY TRADE CENTER, PARK LANE, SECUNDERABAD. 3.CIT(APPEALS)-5, HYDERABAD. 4.PR.CIT-5, HYDERABAD. 5.D.R. ITAT, HYDERABAD. 6.GUARD FILE.