D.C.I.T Cir - 3,kolkata., Kolkata V. M/s Wires & Fabriks (SA) Ltd., Kolkata

ITA 272/KOL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99718 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2015
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 07-02-2013
• Court: TRIBUNAL
• Department Lawyers: DEBASISH ROYJCIT
• Assessee Lawyers: VIKASH SINGHAL
• Keywords: Depreciation; Additional depreciation; Question of law; Revised return
• Section: 143(3); 139(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH A KOLKATA [BEFORE HON BLE SHRI MAHAVIR SINGH, JM & SHRI M.BALAGANESH, AM ] ITA NO.272/KOL/2013 ASSESSMENT YEAR : 2009 - 10 D.C.I.T., CIRCLE - 3, - VERSUS - M/S. WIRES & FABRIKS (SA)LTD. KOLKATA KOLKATA (PAN: AAACW 2586 L) (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI DEBASISH ROY,JCIT.SR.DR FOR THE RESPONDENT : SHRI VIKASH SINGHAL, FCA DATE OF HEARING : 20/08/2015. DATE OF PRONOUNCEMENT : 31.08.2015. ORDER PER SHRI M.BALAGANESH, AM THIS APPEAL OF THE REVENUE ARISE S OUT OF THE ORDER OF LD. CIT(A) - I, KOLKATA IN APPEAL NO . 823/CIT(A) - I/C - 3/11 - 12 DATED 21.11 .2012 FOR A.Y.2009 - 10 AGAINST THE ORDER OF ASSESSMENT PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS T HE ACT ). 2. THE FIRST ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD. CIT(A) IS CORRECT IN GRANTING ADDITIONAL DEPRECIATION ON WIND MILL WHEN SUCH CLAIM FOR ALLOWANCE WAS NOT MADE BY THE ASSESSEE IN THE ORIGINAL RETURN AS WELL AS REVIS ED RETURN OF INCOME, BUT ONLY IN THE REVISED COMPUTATION FILED BEFORE COMPLETION OF ASSESSMENT PROCEEDINGS. 3. THE BRIEF FACTS OF THIS CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING OF WIRE CLOTH BOTH METALLIC AND SYNTHETIC WHICH ARE USED IN PAPER MAKING FACTORIES. IN ADDITION TO THIS, THE ASSESSEE IS ALSO ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING OF CHEMICALS. THE ASSESSEE FILED THE ORIGINAL RETURN OF INCOME ON 24.09.2009 WHICH WAS LATER REVISED ON 15.0 1.2011. DURING THE COURSE OF ITA NO.272/KOL/2013 M/S. WIRES & FABRIKS (SA)LTD., A.Y.2009 - 10 2 ASSESSMENT PROCEEDINGS, THE ASSESSEE CLAIMED ADDITIONAL DEPRECIATION ON WIND MILL TO THE TUNE OF RS. 72,34,810/ - . THIS CLAIM WAS REJECTED BY THE LD. AO IN VIEW OF THE DECISION OF THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD. VS CIT (2006) 284 ITR 323 (SC) WHEREIN IT WAS HELD THAT ANY CLAIM CAN BE MADE ONLY BY WAY OF A VALID RETURN. AGGRIEVED, THE ASSESSEE CHALLENGED THIS ISSUE BEFORE THE LD. CIT(A), WHO ALLOWED THE CLAIM OF THE ASSESSEE. AGGRIEVED, TH E REVENUE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS : - 1. WHETHER THE LD.CIT(A() WAS CORRECT IN DIRECTING THE A.O. TO ALLOW THE CLAIM OF THE ASSESSEE WITHOUT ADJUDICATING ON THE ISSUE AS TO WHETHER THE ADDITIONAL DEPRECIATION ON WIND MILL IS ALLOW ABLE OR NOT . 2. WHETHER THE LD.CIT(A) WAS CORRECT IN DIRECTING THE A.O. TO ALLOW THE CLAIM OF THE ASSESSEE WHEREAS THE APEX COURT IN THE CASE OF GOETZ (INDIA) LTD. HELD THAT THE ASSESSEE CANNOT AMEND A RETURN FILED BY HIM FOR MAKING A CLAIM FOR DEDUCTION OTHER THAN BY FILING A REVISED RETURN. 3. WHETHER THE LD.CIT(A) WAS CORRECT IN DIRECTING THE A.O., TO ALLOW THE CLAIM OF THE ASSESSEE WITHOUT TAKING INTO CONSIDERATION THAT THE ISSUE OF ADDITIONAL DEPRECIATION ON WIND MILL HAS YET NOT BEEN DECIDED FINALLY AS THE DIFFERENT HIGH COURTS HAS TAKEN DIFFERENT VIEW ON THIS ISSUE. 4. SHRI DEBASISH ROY, JCIT, SR.DR, THE LD. DR ARGUED ON BEHALF OF THE REVENUE. SHRI VIKASH SINGHAL, FCA, THE LD. AR ARGUED ON BEHALF OF THE ASSESSEE. 5. TH E LD. DR ARGUED TH AT THE ASSESSEE DID NOT BOTHER TO MAKE THE CLAIM OF ADDITIONAL DEPRECIATION ON WIND MILL EVEN IN THE REVISED RETURN FILED BY HIM, BUT ONLY CLAIMED THE SAME BY WAY OF A REVISED COMPUTATION FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. ACCORDINGLY, HE R ELIED UPON THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF GOETZ E (INDIA) LTD. VS CIT [2006] 157 TAXMAN 1 (SC) /284 ITR 323 (SC) . 6. IN RESPONSE TO THIS, THE LD. AR ARGUED THAT THE DECISION OF THE GOETZ E INDIA LTD. CASE IS NOT APPLICABLE TO THE APPELLATE AUTHORITIES AND HENCE THE RELIEF GRANTED BY THE LD. CIT(A) BY CONSIDERING THE REVISED COMPUTATION OF INCOME I S VALID. HE FURTHER ARGUED ITA NO.272/KOL/2013 M/S. WIRES & FABRIKS (SA)LTD., A.Y.2009 - 10 3 THAT THE ALLOWANCE OF ADDITIONAL DEPRECIATION ON WIND MILL IS COVERED IN FAVOUR OF THE ASSESSEE BY THE FO LLOWING DECISIONS OF THE HON BLE MADRAS HIGH COURT : ( A ) CIT VS V TM LIMITED [2009] 319 ITR 336 (MAD) ( B ) CIT VS HI TECH ARAI LTD. [2010] 321 ITR 477 (MAD) ( C ) CIT VS TEXMO PRECISION CASTINGS [2010] 321 ITR 481 (MAD) 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERU SED THE MATERIALS AVAILABLE ON RECORD. WE FIND FROM THE ARGUMENTS OF THE LD. DR THAT THE ASSESSEE HAD MADE A CLAIM FOR ADDITIONAL DEPRECIATION ON WIND MILL IN THE REVISED COMPUTATION OF INCOME STATEMENT FILED BEFORE COMPLETION OF ASSESSMENT PROCEEDINGS. AD MITTEDLY, THE ASSESSEE HAD MISSED THE BUS IN THE OPPORTUNITY PROVIDED TO HIM BY THE STATUTE BY FILING THE REVISED RETURN WITHIN THE TIME LIMIT PRESCRIBED U/S 139(5) OF THE ACT. HOWEVER, THAT DOES NOT PREVENT THE ASSESSEE FROM MAKING ITS LEGITIMATE CLAIMS A ND ITS DOORS ARE NOT COMPLETELY SHUT. THE DECISION IN THE CASE OF GOETZ E INDIA LIMITED CLEARLY STATES THAT CONSIDERATION OF THE VALID CLAIM OF THE ASSESSEE OTHER THAN BY WAY OF A VALID RETURN CAN BE ENTERTAINED BY THE APPELLATE AUTHORITIES AND MORE SO THE ITAT. THE HON BLE SUPREME COURT IN THE CASE OF CIT VS KANPUR COAL SYNDICATE REPORTED IN 53 ITR 225(SC) HAD HELD THAT THE POWERS OF CIT(A) IS CO - TERMINUS WITH THAT OF THE AO; THAT THE FIRST APPELLATE AUTHORITY HAS WIDER POWERS, IN THAT HE CAN DO WHAT THE I TO CAN DO AND CAN ALSO DIRECT HIM TO D O WHAT HE FAILED TO DO. . THE QUESTION OF LIMITATION ON THE LD. AO WOULD HAVE NO RELEVANCE IN VIEW OF THE WIDER POWERS OF THE FIRST APPELLATE AUTHORITY. RELIANCE IN THIS REGARD IS PLACED ON THE DECISION OF THE HON BL E ALLAHABAD HIGH COURT IN THE CASE OF SMT. RAJA RANI GULATI VS CIT REPORTED IN (2012) 346 ITR 543 (ALL). 7.1. WE ALSO FIND THAT THE VERACITY OF THE CLAIM OF ADDITIONAL DEPRECIATION ON WIND MILL WAS NEVER DISPUTED BY THE LD. AO. IT IS ALSO SEEN THAT THERE WAS A SPECIFIC QUERY RAISED BY THE LD. AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON THE DEPRECIATION ISSUE. THE ADDITION WAS MADE ON THE SOLE GROUND THAT NO PLAUSIBLE EXPLANATION WAS OFFERED BY THE ASSESSEE REGARDING THE FACT WHY IT HAD NOT CLAI MED THE SAME IN THE REVISED RETURN FILED BY HIM. WE FIND THAT THIS ISSUE ON MERITS IS NOW SETTLED IN FAVOUR OF THE ASSESSEE BY THE FOLLOWING DECISIONS OF THE HON BLE MADRAS HIGH COURT : - ITA NO.272/KOL/2013 M/S. WIRES & FABRIKS (SA)LTD., A.Y.2009 - 10 4 THE HON BLE MADRAS HIGH COURT IN THE CASE OF CIT VS VTM LIMITED [200 9] 319 ITR 336 (MAD) HAS HELD AS UNDER : - IN THE CASE ON HAND, THE ASSESSEE IS STATED TO HAVE SET UP A WINDMILL AT A COST OF RS.5,85,60,000. IT IS TRUE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURE OF TEXTILE GOODS. AS FAR AS THE A PPLICATION OF SECTION 32(1)(IIA) OF THE ACT IS CONCERNED, WHAT IS REQUIRED TO BE SATISFIED IN ORDER TO CLAIM THE ADDITIONAL DEPRECIATION IS THAT THE SETTING UP OF A NEW MACHINERY OR PLANT SHOULD HAVE BEEN ACQUIRED AND INSTALLED AFTER MARCH 31,2002, BY AN A SSESSEE, WHO WAS ALREADY ENGAGED IN THE BUSINESS OF MANUFACTURE OR PRODUCTION OF ANY ARTICLE OR THING. THE SAID PROVISION DOES NOT STATE THAT THE SETTING UP OF A NEW MACHINERY OR PLANT, WHICH WAS ACQUIRED AND INSTALLED UP TO MARCH 31, 2002, SHOULD HAVE ANY OPERATIONAL CONNECTIVITY TO THE ARTICLE OR THING THAT WAS ALREADY BEING MANUFACTURED BY THE ASSESSEE. THEREFORE, THE CONTENTION THAT THE SETTING UP OF A WINDMILL HAS NOTHING TO DO WITH THE TEXTILE INDUSTRY, NAMELY, MANUFACTURE OF TEXTILES, ETC. IS TOTALLY NOT GERMANE TO THE SPECIFIC PROVISION CONTAINED IN SECTION 32(1)(IIA) OF THE ACT. IN SUCH CIRCUMSTANCES, WE ARE NOT ABLE TO APPRECIATE THE CONTENTION OF THE LEARNED STANDING COUNSEL FOR THE APPELLANT ON THE GROUND THAT THE ORDER OF THE COMMISSIONER OF INC OME - TAX (APPEALS) AS CONFIRMED BY THE TRIBUNAL SHOULD BE INTERFERED WITH. IT CANNOT ALSO BE SAID THAT SETTING UP OF A WINDMILL WILL NOT FALL WITHIN THE EXPRESSION SETTING UP OF A NEW MACHINERY OR PLANT . WE DO NOT FIND ANY ERROR IN THE CONCLUSION OF THE T RIBUNAL IN CONFIRMING THE ORDER OF THE COMMISSIONER OF INCOME - TAX (APPEALS). WE, THEREFORE, DO NOT FIND ANY QUESTION OF LAW MUCH LESS SUBSTANTIAL QUESTION OF LAW TO ENTERTAIN THIS APPEAL. THE APPEAL FAILS AND THE SAME IS DISMISSED. NO COSTS. CIT VS HI T ECH ARAI LTD. [2010] 321 ITR 477 (MAD) THE ASSESSE,E ENGAGED IN THE BUSINESS OF MANUFACTURE OF OIL SEEDS, MOULDED RUBBER PAR5TS ETC., APART FROM GENERATION OF POWER, SET UP TWO WIND MILLS IN ADDITION TO THE ALREADY EXISTING FOUR WIND MILLS AND CLAIMED ADD ITIONAL DEPRECIATION UNDER SECTION 32(1)(IIA) OF THE INCOME TAX ACT, 1961. THE ORDER OF THE COMMISSIONER (APPEALS) GRANTING ADDITIONAL DEPRECIATION UNDER SECTION 31(1)(IIA) WAS CONFIRMED BY THE TRIBUNAL. ON APPEAL BY THE DEPARTMENT : HELD, DISMISSING THE A PPEALS, (I) THAT MERELY BECAUSE A CO - ORDINATE BENCH OF THE TRIBUNAL HAD EARLIER TAKEN A DIFFERENT VIEW, THE TRIBUNAL NEED NOT KINDLY FOLLOW THE EARLIER DECISION EVEN IF THE EARLIER DECISION DID NOT REFLECT THE CORRECT POSITION OF LAW. (II) THAT IN ORDER TO CLAIM THE ADDITIONAL DEPRECIATION UNDER SECTION 31(1)(IIA) OF THE ACT, THE NEW MACHINERY OR PLANT WOULD HAVE TO BE ACQUIRED AND INSTALLED AFTER MARCH 31,2002 BY AN ASSESSEE ALREADY ENGAGED IN THE BUSINESS OF MANUFACTURE OR PRODUCTION OF ARTICLE OR THING. THE REQUIREMENT OF THE PROVISION WAS NOT THAT THE SETTING UP OF NEW MACHINERY OR PLANT ACQUIRED AND CONNECTIVITY TO THE ARTICLE OR THING THAT WAS ALREADY BEING MANUFACTURED BY THE ASSESSEE COULD NOT BE SAID THAT THE SETTING UP OF A WIND MILL WOULD NOT FALL WITHIN THE EXPRESSION SETTING UP OF A NEW MACHINERY OR PLANT. THERE WAS NO ERROR IN THE CONCLUSION OF THE TRIBUNAL IN CONFIRMING THE ORDER PASSED BY THE COMMISSIONER (APPEALS). NO SUBS TANTIAL QUESTION OF LAW AROSE . CIT VS TEXMO PRECISION CASTINGS [2010 ] 321 ITR 481 (MAD) ITA NO.272/KOL/2013 M/S. WIRES & FABRIKS (SA)LTD., A.Y.2009 - 10 5 THE ASSESSEE WAS CARRYING ON THE BUSINESS OF CASTINGS FOR EXPORT AND ALSO GENERATING AND SELLING ELECTRICITY FROM WINDMILLS. FOR THE ASSESSMENT YEAR 2003 - 04, THE ASSESSEE CLAIMED ADDITIONAL DEPRECIATION ON NEW WINDMILLS INSTALLED UNDER 31(1)(IIA) OF THE INCOME - TAX ACT, 1961. THE ASSESSING OFFICER AND THE COMMISSIONER OF INCOME - TAX (APPEALS) DISALLOWED THE CLAIM OF THE ASSESSEE. THE TRIBUNAL HELD IN FAVOUR OF THE ASSESSEE. ON APPEAL : HELD, DISMISSING THE APPEAL, THAT THE TRIBUNAL WAS R IGHT IN GRANTING THE ADDITIONAL DEPRECIATION ON THE WINDMILLS INSTALLED BY THE ASSESSEE. RESPECTFULLY FOLLOWING THE JUDICIAL PRECEDENTS ON THE IMPUGNED ISSUE, WE ALLOW THE CLAIM OF ADDITIONAL DEPRECIATION ON WIND MILL TO THE ASSESSEE. ACCORDINGLY, GROUND NOS. 1 TO 3 RAISED BY THE REVENUE ARE DISMISSED. 8. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNC ED IN TH E COURT ON 31.08.2015. SD/ - SD/ - [MAHAVIR SINGH] [M.BALAGANESH] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE : 31.08.2015. R.G .(.P.S.) COPY OF THE ORDER FORWARDED TO : 1 . M/ S. WIRE & FABRIKS (SA)LTD., 7, CHITTARANJAN AVENUE, KOLKATA - 72. 2 D .C.I.T., CIRCLE - 3 , KOLKATA. 3 . THE CIT - KOLKATA 4. THE CIT(A) - I, KOLKATA. 5 . DR, KOLKATA BENCHES, KOLKATA TRUE COPY , BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES