DCIT, Moradabad V. M/s Designco, Moradabad

ITA 2760/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97149 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 29-07-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 06-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARWINDER KAUR
• Assessee Lawyers: A K AGARWAL
• Keywords: Depreciation; Retrospective amendment
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B, NEW DELHI BEFORE SH. N. K. SAINI, A.M AND SH. C.M.GARG, J.M ITA NO. 276 0& 2184/DEL./2013 : ASS TT. YEAR : 2002-03 ASSTT. YEAR : 2003-04 DCIT CIRCLE II, MORADABAD VS DESIGNCO GAISHAHEED MORADABAD (APPELLANT) (RESPONDENT) PAN NO. AAAFD9590J C.O. NO. 265 & 208/DEL/2014 (IN ITA NO. 2760/DEL/2013) C.O. NO. 174/DEL/2014 (I N ITA NO. 2184/DEL/2013) DESIGNCO C/O. A.K. AGARWAL & CO., CA STATION ROAD MORADABAD VS ACIT CIRCLE II MORADABAD (APPELLANT) (RESPONDENT) PAN NO. AAAFD9590J APPELLANT BY : SMT. PARWI NDER KAUR, SR. DR RESPONDENT BY : SH. A.K.AGA RWAL, C.A. DATE OF HEARING : 30.07.2015 DATE OF PRONOUNCEMENT : 02.09.2015 ORDER ITA NO.2760& 2184/DEL/2013 (C.O. NO. 208, 265,174/ DEL/ 2014) 2 PER BENCH THE APPEALS BY THE DEPARTMENT AND THE CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE SEPARATE ORDERS D ATED 18.2.2013 AND 28.1.2013 OF THE CIT(A)- BAREILLY, PARTLY FOR THE A SSESSMENT YEAR 2002-03 AND 2003-04 RESPECTIVELY. 2. SINCE THE APPEALS AND THE CROSS OBJECTIONS P ERTAINING TO THE SAME ASSESSEE WERE HEARD TOGETHER SO THESE ARE BEIN G DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENC E AND BREVITY. IN THE DEPARTMENTAL APPEALS, COMMON GROUNDS AR E RAISED WHICH READ AS UNDER :- 1. LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED ON LAW AND IN FACTS OF THE CASE IN FOLLOWING DECISI ON OF HONBLE GUJARAT HIGH COURT IN THE CASE OF M/S AVANI EXPORTS VS. CIT, WHICH IS SUBJUDICE BEFORE THE HONBLE SUPR EME COURT. 2. LD. CIT(A) HAS ALSO ERRED IN LAW AND ON FAC TS IN DELETING THE DISALLOWANCE OF DEPRECIATION WHICH HAS BEEN MADE BY THE AO AFTER PROPER MARSHALLING AND SOUND F OOTING OF FACTS. 3. ANY OTHER GROUNDS RAISED DURING THE PROCEEDIN GS OF APPEAL. 3. FIRST ISSUE VIDE GROUND NO. 1 RELATES TO THE DELETION OF ADDITION MADE BY THE AO ON ACCOUNT OF DEDUCTION U/S 80HHC ON DEPB. 4. FACTS RELATED TO THIS ISSUE IN BRIEF ARE THAT T HE ASSESSEE WAS ENGAGED IN THE BUSINESS OF MANUFACTURING AND EX PORT OF ITA NO.2760& 2184/DEL/2013 (C.O. NO. 208, 265,174/ DEL/ 2014) 3 ARTWARES, EPNS ARTWARES, IRON ARTWARES AND OTHER HANDICRAFTS. THE ASSESSEE HAD CREDITED RS. 68,13,75 5 FOR THE YEAR RELEVANT TO THE ASSESSMENT YEAR 2002-03 AS DEP B AND RS. 93,40,792/- FOR THE ASSESSMENT YEAR 2003-04. TH E AO DID NOT ALLOW THE CLAIM OF THE ASSESSEE FOR DEDUCTION U /S 80HHC ON THE SAID AMOUNTS. 5. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATT ER TO THE LD. CIT(A) AND SUBMITTED THAT THE DEPB LICENSES WER E EXPORT INCENTIVES FOR REFUNDS OF VARIOUS EXCISE AND CUSTOM DUTIES PAID WHILE PROCURING RAW MATERIALS AND MOREOVER, ON LY A UNIT CARRYING OUT EXPORT SALES IS ENTITLED TO GET DEPB L ICENSES ONLY AND ONLY AGAINST EXPORTS MADE. THUS, THE DEPB CREDITS / LICENSES DIRECTLY AROSE DUE TO EXPORTS OF GOOD OR MERCHANDISE. IT WAS FURTHER SUBMITTED THAT VIDE TAX ATION LAWS (AMENDMENT) ACT, 2005 THE BENEFIT U/S 80HHC ON THE AMOUNT OF PROFIT ON SALE OF DEPB TO EXPORTERS HAVING TURN OVER EXCEEDING RS. 10 CRORE WAS DENIED WITH RETROSPECTIV E EFFECT FROM 1.4.98 BUT THE SAID AMENDMENT HAD BEEN HELD TO BE ULTRA VIRUS TO THE EXTENT OF ITS RETROSPECTIVE EFFECT BY THE HONBLE GUJARAT HIGH COURT AND THE BENEFIT OF DEDUCTION U/S 80HHC ON PROFITS ON SALE OF DEPB HAD BEEN ALLOWED VIDE OR DER ITA NO.2760& 2184/DEL/2013 (C.O. NO. 208, 265,174/ DEL/ 2014) 4 DATED 28.01.2013 IN THE CASE OF M/S AVANI EXPORTS V S. CIT REPORTED AT 23 TAXMAN 62. 6. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIO NS OF THE ASSESSEE HELD THAT DEPB LICENSES DIRECTLY AROSE OUT OF EXPORT BUSINESS AND THE ASSESSEE WAS ENTITLED FOR BENEFIT U/S 80HHC IN RESPECT OF DEPB LICENSE IS IN VIEW OF JUDGMENT O F THE HONBLE GUJARAT HIGH COURT IN THE CASE OF MS. AVANI EXPORTS VS. CIT (SUPRA). NOW THE DEPARTMENT IS IN APPEAL. 7. THE LD. DR STRONGLY SUPPORTED THE ORDER OF THE AO AND FURTHER SUBMITTED THAT THE RECEIPT ON ACCOUNT OF D EPB IS NOT DIRECTLY ARISING OUT OF EXPORTS OUT OF INDIA OF ANY GOODS OR MERCHANDISE THEREFORE THE DEDUCTION U/S 80HHC WAS R IGHTLY DENIED BY THE AO AND THE LD. CIT(A) WAS NOT JUSTIFI ED IN ALLOWING THE RELIEF TO THE ASSESSEE. IN HIS RIVAL S UBMISSIONS, THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUB MISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMI TTED THAT THE DEPARTMENT PREFERRED TO FILE THE SLP BEFORE THE HONBLE SUPREME COURT AGAINST THE JUDGMENT GIVEN BY THE HON BLE GUJARAT HIGH COURT IN THE CASE OF AVANI EXPORTS(SUP RA) AND THE ASSESSEE WAS ALSO ONE OF THE PARTIES TO THE ABO VE SLP. IT ITA NO.2760& 2184/DEL/2013 (C.O. NO. 208, 265,174/ DEL/ 2014) 5 WAS FURTHER STATED THAT THE MATTER HAD BEEN DECIDED BY THE HONBLE SUPREME COURT IN FAVOUR OF THE ASSESSEE VID E ITS ORDER DATED 30.3.2015 AND IT HAS BEEN HELD THAT ALL THE EXPORTERS HAVING EXPORT TURN OVER ABOVE OR BELOW RS . 10 CRORES SHALL BE TREATED SIMILARLY COPY OF THE SAID ORDER WAS FURNISHED WHICH IS PLACED ON THE RECORD. 8. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH T HE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE O N THE RECORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE LD CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE BY FOLLOWING THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF M/ S AVANI EXPORTS VS. CIT REPORTED AT 348 ITR 391 WHEREIN IT HAS BEEN HELD AS UNDER :- THAT THE LEGISLATURE SHALL NOT MAKE ANY LAW WH ICH TAKES AWAY OR ABRIDGES THE EQUALITY CLAUSE IN ARTIC LE 14 OF THE CONSTITUTION WHICH ENJOINS THE STATE NOT TO DENY TO ANY PERSON EQUALITY BEFORE THE LAW OR EQUAL PROTECTION OF THE LAWS OF THE COUNTRY. AS LONG AS T HERE IS A RATIONAL BASIS FOR THE CLASSIFICATION, ARTICLE 14 WILL NOT BE IN THE WAY OF SUCH A CLASSIFICATION RESULTIN G IN UNEQUAL BURDENS ON DIFFERENT CLASSES OF PROPERTIES. A TAXING STATUTE IS NOT WHOLLY IMMUNE FROM ATTACKS ON THE GROUND THAT IT INFRINGES THE EQUALITY CLAUSE IN ART ICLE 14, THOUGH THE COURTS ARE NOT CONCERNED WITH THE PO LICY UNDERLYING A TAXING STATUTE. IN THE AMENDMENTS THE CLASSIFICATIONS BASED ON EXPORT TURNOVER IS A RECOGNIZED WAY OF CLASSIFICATION THROUGHOUT THE WOR LD. ITA NO.2760& 2184/DEL/2013 (C.O. NO. 208, 265,174/ DEL/ 2014) 6 PROGRESSIVE LEVY IS BASED ON INCOME CLASSIFICATION IN TERMS OF BOTH, THE BASIS OF TAXATION AND THE RATE O F TAX, AND ON THIS GROUND, THE SAME CANNOT BE SAID TO BE ARBITRARY. THE LEGISLATURE IS NOT BOUND BY THE DOCT RINE OF PROMISSORY ESTOPPELS AND THE AMENDMENT COULD NOT BE STRUCK DOWN ON THE GROUND OF VIOLATION OF PROMISSORY ESTOPPELS. THE OBJECT OF THE AMENDMENT, AS IT APPEARED FROM THE STATEMENTS OF THE FINANCE MINISTER WHILE MOVING THE BILL, WAS TO GET RID OF T HE WRONG DECISION OF THE TRIBUNAL INTERPRETING THE THE N PROVISION OF THE STATUTE IN AWAY BENEFICIAL TO THE ASSESSEE. ACCORIDNGLY TO THE EXISTING LAW ENACTED B Y PARLIAMENT ITSELF, WRONG ORDERS PASSED BY A TRIBUNA L SHOULD BE CHALLENGED BY THE AGGRIEVED PARTY BEFORE THE APPROPRIATE HIGH COURT AND IF SUCH PARTY IS STI LL AGGRIEVED BY THE ORDER OF THE HIGH COURT, HE SHOULD MOVE THE SUPREME COURT. THERE WAS NO DEFECT IN THE ORIGINAL LEGISLATION BUT THE TRIBUNAL HAS INTERPRET ED THE LANGUAGE OF THE VALID PIECE OF LEGISLATION IN A WAY, WHICH BENEFITS THE ASSESSES. IN SUCH A CASE, FOR OVERCOMING THE ADVERSE DECISION OF THE TRIBUNAL, TH E LEGISLATURE CANNOT DELETE A VALID PIECE OF LEGISLAT ION AND INCORPORATE A TOTALLY NEW ONE WITH RETROSPECTIV E EFFECT. ALTHOUGH IN A TAXING STATUTE LAXITY IS PERM ISSIBLE AND AFTER GIVING A BENEFIT TO THE ASSESSES BASED ON SOME SPECIFIC CONDITIONS, SUCH BENEFIT CAN DEFINITE LY BE CURTAILED IT MUST BE EFFECTIVE FROM A FUTURE DATE A ND NOT FROM AN EARLIER POINT OF TIME. THE AMENDMENT GRANTI NG BENEFIT RESTRICTING IT TO A CLASS OF ASSESSES WHOSE TURNOVER IS LESS THAN RS. 10 CRORES IS PERMISSIBLE PROSPECTIVELY BUT THE WAY IT HAS BEEN ENACTED, IT T AKES AWAY AN ENJOYED RIGHT OF A CLASS OF CITIZENS WHO AVAILED OF THE BENEFIT BY COMPLYING WITH THE REQUIREMENTS OF THE THEN PROVISIONS OF LAW. MOREOVE R, THE AMENDMENT HAS BEEN MADE AT A POINT OF TIME WHEN ITA NO.2760& 2184/DEL/2013 (C.O. NO. 208, 265,174/ DEL/ 2014) 7 THE APPLICATION OF SECTION 80HHC HAS ALREADY BEEN EXHAUSTED AND IT WAS NOT EVEN IN THE STATUTE BOOK. IN SUCH A SITUATION, IT IS NOT PERMISSIBLE TO TAKE AWA Y THE BENEFIT ALREADY GRANTED THROUGH A CONCLUDED SCHEME BY INTRODUCING A FRESH AMENDMENT BY VIRTUE OF WHICH A N EXPIRED SCHEME HAS BEEN REVIVED WITH BENEFIT CONFER RED UPON ONLY A LIMITED SECTION AND SNATCHING IT AWAY F ROM SOME OTHER SECTIONS. THE AMENDMENT IS LIABLE TO BE QUASHED TO THE EXTENT THAT THE OPERATION OF THE SEC TION COULD BE GIVEN EFFECT FROM THE DATE OF AMENDMENT AN D NOT IN RESPECT OF EARLIER ASSESSMENT YEARS IN THE C ASE OF ASSESSES WHOSE EXPORT TURNOVER IS ABOVE RS. 10 CROR ES. IN OTHER WORDS, THE RETROSPECTIVE AMENDMENT SHOULD NOT BE DETRIMENTAL TO ANY OF THE ASSESSEES. 9. AGAINST THE AFORESAID ORDER, THE DEPARTMENT PRE FERRED SLP (C. NO. 9273/2013) BEFORE THE HONBLE SUPREME COURT WHERE IN IT HAS BEEN HELD AS UNDER :- WE FIND THAT IN ESSENCE THE HIGH COURT HAS QUASHED THE SEVERABLE PART OF THIRD AND FOURTH PROVISO TO SEC. 80HHC (3) AND IT BECOMES CLEAR THEREFROM THAT CHALLENGE WHICH WAS LAID TO THE CONDITIONS CONTAINED IN THE SAID PROVISOS BY THE RESPONDENT HAS SUCCEEDED. HOWEVER, TO MAKE THE POSITION CRYSTAL CLEAR, WE SUBSTITUTE THE DIRECTION OF THE HIGH COURT WITH THE FOLLOWING DIRECTION : HAVING SEEN THE TWIN CONDITIONS AND SINCE 80HHC BENEFIT IS NOT AVAILABLE AFTER 1.4.05, WE ARE SATIS FIED THAT CASES OF EXPORTERS HAVING A TURNOVER BELOW AND THOSE ABOVE 10 CR. SHOULD BE TREATED SIMILARLY. THI S ORDER IS IN SUBSTITUTION OF THE JUDGMENT IN APPEAL. ITA NO.2760& 2184/DEL/2013 (C.O. NO. 208, 265,174/ DEL/ 2014) 8 10. WE, THEREFORE, BY RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE AFORESAID REFERRED TO JUDGMENT DO NOT SEE ANY MERIT IN THIS GROUND OF THE DEPARTMENTAL APPEAL. 11. GROUND NO. 2 RELATES TO THE DELETION OF DISALL OWANCE ON ACCOUNT OF DEPRECIATION MADE BY THE AO. THE FACTS R ELATED TO THIS ISSUE IN BRIEF ARE THAT THE AO DISALLOWED THE DEPRECIATION TO THE EXTENT OF RS. 60,559/- ON THE V EHICLE BLOCK, RS. 1,49,734/- ON FACTORY/ OFFICE BUILDING B LOCK, AND RS. 5,32,414/- ON MACHINERY & PLANT BLOCK FOR THE ASSESSMENT YEAR 2002-03 BY OBSERVING AS UNDER :- 11) THE ASSESSEE HAS SUBMITTED A CHART OF FIXED AS SETS SHOWING OPENING WDV AND ADDITIONS MADE DURING THE YEAR AND SUBSEQUENTLY DEPRECIATION CHARGED THEREON. THE ASSESSEE WAS ASKE D TO FILE COMPLETE DETAILS OF FIXED ASSETS/ADDITIONS MADE DUR ING THE YEAR. IN THE LIGHT OF REPLY FILE BY THE ASSESSEE ALONG WITH DOCUMENTARY EVIDENCE AND COPY OF ACCOUNTS THE FOLLOWING DISALLO WANCES HAVE BEEN MADE. A. VEHICLE BLOCK DEP. 20% DEP. 10% WDV AS ON 01.04.01 2737149 - ADD: 07.08.01 (CENTER) 640000 - 06.03.02 (MARUTI WAGON) - 378000 LESS: 20.11.01(MATIZ) 140000 - 3237149 378000 DEP. 647430 + 37800=685230 THE ASSESSEE HAS CLAIMED RS. 745789/- AS DEPRECIATI ON ON VEHICLE BLOCK. DETAILS OF PURCHASE OF VEHICLE AMOUNTING TO RS. 605 604/- AS SHOWN IN LEDGER A/C ON 31.03.2002 AS A JOURNAL TRANSFER ENTRY HAS N OT BEEN PROVIDED. HENCE ADDITION OF RS. 605604/- IS DISALLOWED. SECONDLY TH E ASSESSEE HAS CLAIMED RS. ITA NO.2760& 2184/DEL/2013 (C.O. NO. 208, 265,174/ DEL/ 2014) 9 745789/- AS DEPRECIATION WHICH IS EXCESS TO RS. 605 59/- IS DISALLOWED AND ADDED BACK IN TOTAL INCOME. 10% OF THE VEHICLE DEPRECIATION IS ALSO TO BE DISAL LOWED ON THE BASIS OF PERSONAL USE OF THE VEHICLE. HENCE RS. 68523/- OUT OF ADMISSIBLE DEPRECIATION OF RS. 685230/- IS DISALLOWED. (DISALLOWANCE RS. 6 8523/-) B. FACTORY / OFFICE BUILDING BLOCK: DEP. 10% DEP. 5% WDV AS ON 01.04.01 NO. 1 NK ADDITION 183226 28900 NO. 2 LAKRI FAZALPUR 22723355 7222436 ADDITION _____________ __________ 22906581 725133 6 DEPRECIATION 2290658 + 362567 = 2653225 DEPRECIATION ON ADDITIONS MADE DURING THE YEAR IS A LLOWED ONLY ON 5% AS PUT TO USE/COMPLETION CERTIFICATE HAS NOT BEEN FURNISHE D BY THE ASSESSEE. HENCE EXCESS DEPRECIATION IN THIS BLOCK RS. 149734/- (CLA IMED 2802959-2653225) IS DISALLOWED AND ADDED BACK TO TOTAL INCOME. (DISALLOWANCE RS. 149734) C. MACHINERY & PLANT BLOCK : DEP. 25% DEP. 12. 5% WDV AS ON 07.04.01 14541452 ADDITION - 5020911 .. . 14541452 5020911 DEPRECIATION 3635363 + 627614= 4262977 THE ASSESSEE HAS NOT FURNISHED PUT TO USE/INSTALLAT ION CERTIFICATE FOR THE ADDITION OF MACHINERY AND PLANT. IT IS SUPPOSED TO BE ADMITTED THAT THE MACHINERY & PLANT ARE ADDED IN THE SECOND HALF OF T HE FINANCIAL YEAR. HENCE EXCESS DEPRECIATION IN THIS BLOCK RS. 532414/- (CLA IMED 4795391-4262977) IS DISALLOWED ACCORDINGLY. (DISALLOWANCE RS. 532414/-) HENCE TOTAL DISALLOWANCE (60559+68523+ 149734+532 414) = 811230/-. 12. BEING AGGRIEVED THE ASSESSEE CARRIED THE MAT TER TO THE LD. CIT(A) WHO INCORPORATED THE SUBMISSIONS OF THE ASSE SSEE IN PAGE NO. ITA NO.2760& 2184/DEL/2013 (C.O. NO. 208, 265,174/ DEL/ 2014) 10 6 AND 7 OF THE IMPUGNED ORDER WHICH ARE REPRODUCED VERBATIM AS UNDER :- GROUND NO. 1(E), DISALLOWANCE OF RS. 60,559/- AND R S. 68,523/- OUT OF DEPRECIATION ON VEHICLES :- THE DISALLOWANCE OF RS. 60,559/- HAS BEEN MADE ON THE CONTENTION THAT THE JOURNAL ENTRY DATED 31.03.2002 WAS NOT EXPLAINED. THE JOURNAL ENTRY IS THE TRANSFER OF AMO UNT OF CAR PURCHASED FROM M/S MGF AUTOMOBILES LTD. BY DELHI BR ANCH OFFICE OF THE ASSESSEE ON 24.02.2002. THE DETAILED COPY OF ACCOUNT HAVING PARTICULARS OF INVOICE AND CAR AND T HE BILL WERE DULY PRODUCED BEFORE AO AND THE SAME ARE ENCLOSED H EREWITH. IT IS PRAYED THAT THE DISALLOWANCE OF RS. 60,559/- , MAY KINDLY BE DELETED. FURTHER, AFTER ALLOWANCE OF ABOVE RS. 60,559/- THE TOTAL DISALLOWANCE ON ACCOUNT OF DEPRECIATION ON VEHICLES MAY KINDLY BE RESTRICTED TO 6% INSTEAD OF 10%, AS IN EARLIER Y EARS. GROUND NO. 1(F), DISALLOWANCE OF RS. 1,49,734/- OU T OF DEPRECIATION ON FACTORY/OFFICE/BUILDINGS :- THE DEPRECIATION ON ADDITIONS TO FACTORY/OFFICE BUI LDING MADE BEFORE 30.09.2001 HAS BEEN ALLOWED ONLY @5% AS PUT TO USE/COMPLETION CERTIFICATE HAS NOT BEEN FURNISHED. IT IS RESPECTFULLY SUBMITTED THAT THE ABOVE BUILDING IS A LREADY UNDER USE IN WHICH THE ADDITIONS WERE MADE. ACCORDINGLY, THE ASSESSEE IS ENTITLED TO 10% DEPRECIATION IN RESPECT OF SUCH ADDITIONS. THE ASSESSEE HAS CLAIMED ONLY 5% DEPRECI ATION IN RESPECT OF THE ADDITIONS MADE AFTER 30 SEPTERMBER, 2001. THE LD. AO HAS ALSO NOT PUT ANY QUERY ASKING TO FURNISH ANY SUCH CERTIFICATE. THE ONLY QUERY RAISED WAS TO PROVIDE DETAILS OF ADDITIONS IN THE FIXED ASSETS WITH EVIDENCE. IT IS THEREFORE REQUESTED THAT THE ABOVE DISALLOWANCE BEING UNFOUND ED AND BASED ON SURMISES MAY PLEASE BE DELETED. GROUND NO. 1(G), DISALLOWANCE OF RS. 5,32,414/- OUT OF DEPRECIATION ON MACHINERY & PLANT :- ITA NO.2760& 2184/DEL/2013 (C.O. NO. 208, 265,174/ DEL/ 2014) 11 THE DEPRECIATION ON ADDITIONS TO MACHINERY & PLANT BLOCK MADE BEFORE 30.09.2001 HAS BEEN ALLOWED ASSUMING TH AT THE ADDITION HAS BEEN MADE IN SECOND HALF OF THE FINANC IAL YEAR AS THE ASSESSEE HAS NOT FURNISHED PUT TO USE / INSTALL ATION CERTIFICATE WHICH WAS NEVER ASKED FOR. DEPRECIATION ON MACHINERY & PLANT HAS BEEN CORRECTLY CLAIMED AND TH E NECESSARY INVOICES HAVE BEEN PRODUCED. THE MACHINER IES ARE PUT TO USE AS SOON AS THEY ARE PURCHASED. THE ONLY QUERY RAISED WAS TO PROVIDE DETAILS OF ADDITIONS IN THE FIXED ASSETS WITH EVIDENCE . IT IS THEREFORE REQUESTED THAT THE ABOVE DISALLOW ANCE BEING UNFOUNDED AND BASED ON SURMISES MAY PLEASE BE DELETED. 13. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSI ONS OF THE ASSESSEE DELETED THE DISALLOWANCE BY OBSERVING AS UNDER :- IN VIEW OF THE LEDGER A/C AND THE I NVOICE SUBMITTED BY THE APPELLANT, THE ADDITION OF RS. 60,559/- STAN DS DELETED. FURTHER, THE DISALLOWANCE OF DEPRECIATION ON VEHICL ES STANDS RESTRICTED TO 6% IN LINE WITH ORDER OF HONBLE ITAT IN ASSESSEES OWN CASE FOR AY 2001-02. AS FAR AS, ADDITION ON ACCOUNT OF EXCESS DEPRECIATION ON BUILDING CONSTRUCTED DURING THE YEA R, IT HAS BEEN OBSERVED, BY ME, THAT ALL THE DETAILS CALLED F OR WERE DULY SUBMITTED BY THE ASSESSEE. THE AO HAD NOT CALLED FO R ANY COMPLETION CERTIFICATE FROM THE APPELLANT. THE ASSE SSEE HAS ALSO CLAIMED DEPRECIATION @5% ON ADDITION MADE AFTE R 30.09.2001. IN VIEW OF ALL THE DETAILS AND SUBMISSI ON THE ADDITION OF RS. 1,49,734/- IS DELETED. ADDITION ON DEPRECIATION ON PLANT AND MACHI NERY, ASSUMING THE INSTALLATION DATE TO BE POST 30.09.200 1 IS IMPROPER BASED ON SURMISE AND CONJECTURES. ALL THE DETAILS CALLED FOR WERE DULY SUBMITTED WITH PROPER EVIDENCE . THE ADDITION STANDS DELETED. ITA NO.2760& 2184/DEL/2013 (C.O. NO. 208, 265,174/ DEL/ 2014) 12 NOW THE DEPARTMENT IS IN APPEAL. 14. THE LD. DR REITERATED THE OBSERVATIONS MADE BY THE AO AND STRONGLY SUPPORTED THE ASSESSMENT ORDER DATED 21.3. 2005. IN HIS RIVAL SUBMISSIONS, THE LD. COUNSEL FOR THE ASSESSEE REITE RATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND S TRONGLY SUPPORTED THE IMPUGNED ORDER PASSED BY THE LD. CIT(A). 15. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON TH E RECORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE DISALLOWANCE O F DEPRECIATION ON VEHICLES WAS RESTRICTED BY THE LD. CIT(A) TO THE EX TENT OF 6% BY FOLLOWING THE DECISION OF THE ITAT IN ASSESSEES OW N CASE FOR THE PRECEDING ASSESSMENT YEAR 2001,2002, DURING THE COU RSE OF HEARING, NOTHING CONTRARY TO THE SAID DECISION WAS BROUGHT O N RECORD. THEREFORE, WE DO NOT SEE ANY VALID GROUND TO INTERF ERE THE FINDINGS OF THE LD. CIT(A). 16. AS REGARDS TO THE DISALLOWANCE OF DEPRECIA TION ON THE BUILDING, THE LD. CIT(A) CATEGORICAL STATED THAT THE ASSESSEE HAD CLAIMED THE DEPRECIATION @ 5% ON THE ADDITIONS MADE AFTER 30.09 .2001 WHILE THE AO ALLOWED THE DEPRECIATION @ 5% ON ALL THE ADDITIO NS IN THE BUILDING ACCOUNT WITHOUT CONSIDERING THAT CERTAIN ADDITIONS WERE PRIOR TO ITA NO.2760& 2184/DEL/2013 (C.O. NO. 208, 265,174/ DEL/ 2014) 13 30.09.2001 ON WHICH THE DEPRECIATION AT THE RATE OF 10% WAS AVAILABLE. THE LD. CIT(A) DELETED THE ADDITION AFTE R CONSIDERING THE VARIOUS DETAILS WHICH WERE CALLED FOR AND WERE DULY SUBMITTED BY THE ASSESSEE. THEREFORE, THE IMPUGNED ADDITION WAS ALSO RIGHTLY DELETED BY THE LD. CIT(A). 17. THE REMAINING ADDITION ON ACCOUNT OF DEPRECIA TION ON PLANT AND MACHINERY WAS ALSO MADE BY THE AO BY ASSUMING THE I NSTALLATION DATE TO BE POST 30.9.2001 WHILE THE LD. CIT(A) CATEGORIC ALLY STATED THAT THE ASSESSEE FURNISHED ALL THE DETAILS CALLED FOR WITH PROPER EVIDENCES AND AFTER BEING SATISFIED, HE DELETED THE ADDITION MAD E BY THE AO, ON THE BASIS OF THE EVIDENCES FURNISHED BY THE ASSESSEE. WE THEREFORE, DO NOT SEE ANY MERIT IN THIS GROUND OF THE DEPARTMENTA L APPEAL SINCE NOTHING CONTRARY TO THE OBSERVATIONS OF THE LD. CIT (A) IS BROUGHT ON THE RECORD. 18. AS REGARDS TO THE CROSS OBJECTIONS FILED BY T HE ASSESSEE, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT HE HAS THE INSTRUCTION NOT TO PRESS THE SAME AND GAVE IN WRITING C.O.S WITHDRAW N. IN VIEW OF THAT THE CROSS OBJECTIONS FILED BY THE A SSESSEE ARE DISMISSED AS WITHDRAWAN. ITA NO.2760& 2184/DEL/2013 (C.O. NO. 208, 265,174/ DEL/ 2014) 14 19. IN THE RESULT APPEALS OF THE DEPARTMENT AND T HE CROSS OBJECTIONS OF THE ASSESSEE ARE DISMISSED. (ORDER PRONOUNCED IN THE COURT ON 02/09/2015). SD/- SD/- (C.M.GARG) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 02 / 09/2015 *BINITA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITA NO.2760& 2184/DEL/2013 (C.O. NO. 208, 265,174/ DEL/ 2014) 15 DATE INITIAL 1. DRAFT DICTATED ON 27.08.2015 2. DRAFT PLACED BEFORE AUTHOR 28.08.2015 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.