ITO, New Delhi V. M/s Supermax Laboratories, Dehradun

ITA 278/DEL/2016

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 4270 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: SMC 3
• Next Hearing Date: 07-09-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 19-01-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: SANJAY CHABRA
• Keywords: Depreciation
• Section: 32; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : SMC - 3 NEW DELHI BEFORE SH. N.K. SAINI, ACCOUNTANT MEMBER ITA NO S . 278 /DEL/ 2016 & 3197/DEL/2015 ASSESSMENT YEAR S : 2010 - 11 & 2009 - 10 INCOME TAX OFFICER, WARD - 29(5), NEW DELHI VS. M/S. SUPERMAX LABORATORIES, PLOT NO. 40, PHARMA CITY, SELAQUI IND. AREA, DEHRADUN PAN : AABFS3800R (APPELLANT) (RESPONDENT) APPELLANT BY SH. NEERAJ KUMAR, SR.DR RESPONDENT BY SH. SANJAY CHABRA, CA DATE OF HEARING 07.09.2016 DATE OF PRONOUNCEMENT 12.09.2016 ORDER THESE TWO APPEALS BY THE DEPARTMENT ARE DIRECTED AGAINST THE SEPARATE ORDERS DATED 24.11.2015 AND 26.03.2015 OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 10, NEW DELHI, FOR THE ASSESSMENT YEARS 2010 - 11 AND 2009 - 10. 2. AT THE FIRST INSTANCE , I WILL DEAL WITH THE APPEAL IN ITA NO. 278/DEL/2016 FOR THE ASSESSMENT YEAR 2010 - 11. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: I. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WAS RIGHT IN ALLOWING DEDUC TION OF RS.27,78,872/ - U/S. 80IC OF THE INCOME TAX ACT, 1961 EVEN THOUGH THE ASSESSEE DID NOT FULFILL THE CONDITIONS LAID DOWN U/S 80IC(4) OF THE I.T. ACT. II. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX ( APPEALS) HAS ERRED IN ALLOWING DEPRECIATION OF RS.7,88,975/ - ON FIXED ASSETS. 2 ITA NOS. 278/DEL/2016 & 3197/DEL/2015 AY S : 2010 - 11 & 2009 - 10 3. VIDE GROUND NO. 1, GRIEVANCE OF THE DEPARTMENT RELATES TO THE DELETION OF DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SECTION 80IC OF INCOME - TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) . 3.1 THE FACTS OF THE CASE RELATED TO THIS ISSUE IN BRIEF ARE THAT THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE UNDER SECTION 80IC OF THE ACT BY FOLLOWING THE EARLIER ORDER FOR THE ASSESSMENT YEAR 2008 - 09. LEARNED C OMMISSIONER OF INCOME TAX(APPEALS) DIRECTED THE ASSESSING OFFICER TO ALLOW THE CLAIM OF DEDUCTION UNDER SECTION 80IC OF THE ACT , AS HAS BEEN DONE IN THE ASSESSMENT YEAR 2008 - 09. NOW, THE DEPARTMENT IS IN APPEAL. 3.2 LEARNED COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET, STATED THAT THE IDENTICAL ISSUE FOR THE ASSESSMENT YEAR 2008 - 09 HAS BEEN ADJUDICATED BY ITAT, DE LHI BENCHES, NEW DELHI IN ITA NO . 582/DEL/2014 FOR THE ASSESSMENT YEAR 2008 - 09 IN THE ASSESSEE S OWN CASE VIDE ORDER DATED 27.06.2016 AND T HE ISSUE WAS SET ASIDE TO THE FILE OF THE ASSESSING OFFICER. 3.3 THE SAID CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE WAS NOT CONTROVERTED BY THE LEARNED DR. 3.4 AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES AND MATERIAL ON RECORD, IT IS N OTICED THAT THE IDENTICAL ISSUE HAVING SIMILAR FACTS HAS ALREADY BEEN ADJUDICATED BY ITAT, DELHI BENCHES, NEW DELHI, IN THE ASSESSEE S OWN CASE IN ITA NO. 582/DEL/2014 FOR THE ASSESSMENT YEAR 2008 - 09 VIDE ORDER 3 ITA NOS. 278/DEL/2016 & 3197/DEL/2015 AY S : 2010 - 11 & 2009 - 10 DATED 27.06.2016 AND THE RELEVANT FINDINGS HA VE BEEN GIVEN IN PARA 6 OF THE SAID ORDER, WHICH READ AS UNDER: 6. ON PERUSAL OF THE ORDER OF THE LD. CIT (A) IT SEEMS THAT BEFORE HIM THE APPELLANT HAS SUBMITTED THE COMPLETE SET OF BILLS OF MACHINERY ALONG WITH THE CHALLANS PURCHASED AND INSTALLED AT THE NEW UNIT. ON PERUSAL OF THE FIXED ASSET SCHEDULE OF THE ASSESSEE HE HAS NOTED THAT THERE IS A BIFURCATION AVAILABLE FROM THE CONSOLIDATED FIGURE OF CAPITAL WORK IN PROGRESS BETWEEN THE PLANT AND MACHINERY AND BUILDING WHICH WAS NOT PUT TO USE UP TO 31S T OF MARCH 2007 PERTAINING TO THE NEW UNIT. HE FURTHER NOTED THAT BUILDING WAS ALSO SHOWN IN THAT PARTICULAR SCHEDULE OF RS. 56.25 LACS. IN VIEW OF THIS IT APPEARS THAT THE DETAILS OF COMPLETE SET OF BILLS FOR THE PURCHASE OF MACHINERY INCLUDING WHAT WAS S TATED TO BE LYING IN THE OPENING WORK IN PROGRESS AND THE DELIVERY CHALLAN WERE NOT AVAILABLE BEFORE THE LD AO. FURTHER REGARDING THE CLAIM OF THE AREA FOR WHICH EXEMPTION IS AVAILABLE THE ASSESSEE PRODUCED THE LETTER OF TEHSILDAR ALONG WITH SUBMISSION DAT ED 12/08/2013 AND ALSO SUBMITTED HOST OF EVIDENCES SHOWING POSSESSION CERTIFICATE, ELECTRICITY CONNECTION CERTIFICATE, POLLUTION CLEARANCE CERTIFICATE FOR THE REASON OF SHOWING THAT THE AREA IS NOTIFIED FOR EXEMPTION. ALL THESE EVIDENCES HAVE BEEN TAKEN BY THE LD. CIT (A) FOR THE PURPOSE OF ALLOWING THE CLAIM OF THE ASSESSEE. HOWEVER WE DID NOT FIND THAT THESE DETAILS WERE AVAILABLE BEFORE THE LD AO. THEREFORE IN THE INTEREST OF JUSTICE WE SET ASIDE THIS GROUND OF APPEAL TO THE FILE OF ASSESSING OFFICER FOR VERIFICATION AND ASCERTAINING WHETHER THERE IS ANY VIOLATION OF PROVISIONS OF SECTION 80IC (4) OF THE INCOME TAX ACT THAT THERE IS NO SPLITTING UP OF THE EXISTING UNIT. NEEDLESS TO SAY THAT PROPER OPPORTUNITY OF HEARING BE PROVIDED TO THE ASSESSEE FOR SUB STANTIATING ITS CLAIM. IN THE RESULT GROUND NO. 1 OF THE APPEAL OF THE REVENUE IS ALLOWED WITH ABOVE DIRECTION. 3.5 SO RESPECTFULLY FOLLOWING THE AFORESAID DECISION, THE ISSUE INVOLVED IN GROUND NO. 1 IS SET ASIDE TO THE FILE OF THE ASSESSING 4 ITA NOS. 278/DEL/2016 & 3197/DEL/2015 AY S : 2010 - 11 & 2009 - 10 OFFICER TO BE ADJUDICATED, AS HAS BEEN DIRECTED IN THE AFORESAID REFERRED TO ORDER . 4. THE NEXT ISSUE VIDE GROUND NO. 2 RELATES TO THE DEPRECIATION ON FIXED ASSETS. AS REGARD TO THIS ISSUE ALSO, IT WAS THE COMMON CONTENTION OF BOTH THE PARTIES THAT AN IDENTICAL ISSUE HAS ALREADY BEEN ADJUDICATED IN THE AFORESAID REFERRED TO ASSESSEE S OWN CASE VI DE ORDER DATED 27.06.2016 AND THE RELEVANT FINDING HAS BEEN GIVEN IN PARA 7 OF THE SAID ORDER, WHICH READ AS UNDER: ON THE 2ND ISSUE OF GRANT OF DEPRECIATION ON THE ASSE TS WE NOTICED THAT THE PURCHASE AND USE OF THE SAME ASSETS ARE INVOLVED WHICH ARE IN CASE OF SETTING UP ON NEW UNDERTAKING. THEREFORE THE ISSUE OF DEPRECIATION IS ALSO CONNECTED TO THE PURCHASE OF THE FIXED ASSETS BY THE ASSESSEE AND LEARNED 1ST APPELLATE AUTHORITY HAS ALLOWED THE CLAIM OF THE ASSESSEE WITHOUT TESTING THE CONDITIONS PRESCRIBED UNDER SECTION 32 OF THE ACT OF OWNERSHIP AND USER OF THE ASSETS. LD. 1ST APPELLATE AUTHORITY HAS ALSO ALLOWED THE APPEAL OF THE ASSESSEE ON THIS GROUND AS HE HAS ALRE ADY ALLOWED THE CLAIM OF THE ASSESSEE ON EXEMPTION, ACCORDING TO US THIS COULD NOT BE THE CORRECT REASON FOR ALLOWING THE CLAIM OF DEPRECIATION. AS THE GROUND OF EXEMPTION OF THIS APPEAL IS SET ASIDE TO THE FILE OF THE ASSESSING OFFICER WE ALSO DEEM IT NEC ESSARY TO SET ASIDE THIS 2ND GROUND OF THIS APPEAL ON CLAIM OF DEPRECIATION TO THE FILE OF THE ASSESSING OFFICER. NEEDLESS TO SAY THAT THE ASSESSING AUTHORITY WILL PROVIDE ADEQUATE OPPORTUNITY OF HEARING AND OF ADDUCING THE CLAIM OF THE ASSESSEE. IN THE RE SULT GROUND NO. 2 OF THE APPEAL OF THE REVENUE IS ALLOWED WITH ABOVE DIRECTION. 4.1 SO RESPECTFULLY FOLLOWING THE AFORESAID REFERRED TO DECISION DATED 27.06.2016 IN ITA N O . 582/DEL/2014 FOR ASSESSMENT YEAR 2008 - 09 IN THE ASSESSEE S OWN CASE, THIS ISSUE RELATING TO 5 ITA NOS. 278/DEL/2016 & 3197/DEL/2015 AY S : 2010 - 11 & 2009 - 10 DEPRECIATION IS ALSO SET ASIDE TO THE FILE OF THE ASSESSING OFFICER TO BE ADJUDICATED, AS HAS BEEN DIRECTED IN THE AFORESAID REFERRED TO ORDER. 5. IN ITA NO. 3197/DEL/2015 FOR ASSESSMENT YEAR 2009 - 10, IDENTICAL ISSUE S ARE INVOLVED AS WERE IN I TA NO. 278/DEL/2016 (SUPRA), THEREFORE, MY FINDINGS GIVEN IN THE FORMER PART OF THIS ORDER SHALL APPLY MUTATIS MUTANDIS FOR THE ASSESSMENT YEAR 2009 - 10 ALSO. 6. IN THE RESULT, BOT H THE APPEALS OF THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. THE DECI SION IS PRONOUN CED IN THE OPEN COURT ON 1 2 T H SEPT. , 2016 . S D / - ( N.K. SAINI ) ACCOUNTANT MEMBER DATED: 1 2 T H SEPTEMBER , 2016 . RK/ - COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI