Deputy Commissioner of Income Tax, Circle-1, Aurangabad, Aurangabad V. Maharashtra Water Conservation Corporation, Aurangabad

ITA 266/PUN/2023

AI Insights

The case revolves around the dispute concerning the claim of depreciation by the Maharashtra Water Conservation Corporation, which was initially denied by the Assessing Officer on the grounds that the assets were not used for the main business activities of the assessee. The NFAC, Delhi, reversed this decision, leading to the Revenue's appeal. The Tribunal examined the precedents and found consistency in allowing such claims, thereby dismissing the Revenue's appeal and affirming the NFAC's decision.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 132917 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-05-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 30-04-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 07-03-2023
• Other Referred Cases: ITAT, Pune Benches for A.Ys. 2010-11 and 2011-12
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Depreciation

Judgement Text

आयकर अपीलीय अधिकरण “ए” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपील सं. / ITA No.266/PUN/2023 ननधाारण वषा / Assessment Year : 2017-18 The Dy. Commissioner of Income-tax, Circle – 1, Aurangabad .......अपीलाथी / Appellant बनाम / V/s. Maharashtra Water Conservation Corporation, New Administrative Buildings, Ground Floor, Collector Office, Aurangabad – 431001 PAN: AAMFM1607K ......प्रत्यथी / Respondent Assessee by : Shri Abhay Shastri Revenue by : Shri Mallikarjun Utture, CIT सुनवाई की तारीख / Date of Hearing : 01-05-2023 घोषणा की तारीख / Date of Pronouncement : 02-05-2023 आदेश / ORDER PER S.S. VISWANETHRA RAVI, JM : This appeal by the Revenue against the order dated 27-01-2023 passed by the National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] for assessment year 2017-18. 2 ITA No.266/PUN/2023, A.Y. 2017-18 2. The only issue raised by the Revenue vide ground No.1 challenging the action of NFAC, Delhi in allowing the claim of depreciation as against the order of Assessing Officer in the facts and circumstances of the case. 3. At the outset, we note that the assessee claimed depreciation on its assets to an extent of Rs.52,53,75,679/-. The Assessing Officer asked explanation, as to how the assessee is entitled for claim depreciation on the assets which were not used by the assessee for its business. The assessee explained the same through its written submissions which are reproduced by the Assessing Officer in its order. The Assessing Officer found the written explanation offered by the assessee not acceptable and held no income was earned by the assessee, denied the claim of depreciation. Further, it is noted vide para 6 of the Assessing Officer‟s order that the assessee‟s main business is irrigation and water supply and no income was earned from the said business. According to him, the other business activities relating irrigation such as fisheries, pisciculture, floriculture, horticulture, sericulture, etc. are not forming the main business objects of the assessee. He treated the income earned from the said other activities as „Income from other sources‟. Further, according to him, since the assets were not used for the assessee‟s main business, disallowed the claim of depreciation and added the said amount to the total income of the assessee. Having aggrieved by the said disallowance, the assessee challenged the same before the NFAC, Delhi [CIT(A)]. 4. We note that the assessee submitted its activities before the CIT(A) which are reproduced by the NFAC, Delhi in the impugned order. 3 ITA No.266/PUN/2023, A.Y. 2017-18 According to the CIT(A), a similar issue basing on same identical facts has been adjudicated by the ITAT, Pune Benches and allowed the claim of depreciation vide para 4.3 and 4.4 of the impugned order. 5. Before us, the ld. DR admitted that the issue raised before this Tribunal is similar to the issues raised in A.Ys. 2010-11 and 2011-12 passed by the ITAT, Pune Benches and supported the order of Assessing Officer. 6. The ld. AR drew our attention to the paper book consisting of 17 pages and submitted that this Tribunal initially for A.Ys. 2010-11 and 2011-12 allowed the claim of depreciation and supported the order of CIT(A). 7. We find the order of ITAT, Pune Benches in assessee‟s own case for A.Ys. 2010-11 and 2011-12 placed at page 6 of paper book. On perusal of the relevant part at page 11, para 7, we note that the Tribunal noted the assessee earned income from allocating contract for fishing at newly created reservoir and the same is business income. Consequently, having held so, allowed the claim of depreciation. The ld. DR did not dispute the finding of ITAT and no contrary order was brought on record to the view taken by the ITAT in A.Ys. 2010-11 and 2011-12. Further, it is noted that the ITAT for A.Y. 2014-15 which is at page No.13 of paper book, by following the finding in A.Ys. 2010-11 and 2011-12 allowed the claim of depreciation made by the assessee vide paras 4, 5 and 6. Therefore, having no contrary view, we, by following the orders of Tribunal for A.Ys. 4 ITA No.266/PUN/2023, A.Y. 2017-18 2010-11, 2011-12 and 2014-15, hold that the assessee is entitled to claim depreciation. Thus, we find no infirmity in the finding of NFAC, Delhi and is justified. The only ground raised by the Revenue is dismissed. 8. In the result, the appeal of Revenue is dismissed. Order pronounced in the open court on 2 nd May, 2023. Sd/- Sd/- (R.S. Syal) (S.S. Viswanethra Ravi) VICE PRESIDENT JUDICIAL MEMBER पुणे / Pune; ददनांक / Dated : 2 nd May, 2023. GCVSR आदेश की प्रनतनलनप अग्रेनषत / Copy of the Order forwarded to : 1. अपीलाथी / The Appellant. 2. प्रत्यथी / The Respondent. 3. The concerned CIT, Pune. 4. नवभागीय प्रनतनननध, आयकर अपीलीय अनधकरण, “ए” बेंच, पुणे / DR, ITAT, “A” Bench, Pune. 5. गार्ा फ़ाइल / Guard File./नपत प्रनत// True Copy// आदेशानुसार / BY ORDER, //True Copy// वरिष्ठ निजी सनिव / Sr. Private Secretary आयकि अपीलीय अनिकिण ,पुणे / ITAT, Pune