Gupta Syntex Pvt. Ltd., Ahmedabad V. The Dy.CIT, Circle-2(1)(1), Ahmedabad

ITA 2817/AHD/2015

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5980 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 06-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VIJAY RANJAN
• Keywords: Depreciation; Additional depreciation
• Section: 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH (BEFORE SHRI PRAMOD KUMAR, VICE PRESIDEN T & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ) ITA. NO: 2817/AHD/2015 (ASSESSMENT YEAR: 2012-13) GUPTA SYNTEX PVT. LTD. 193/2/1, OPP: RANIPUR CHURCH, NR. JAGDAMBA PROCESS, NAROL, AHMEDABAD V/S DY. CIT CIRCLE-2(1)(1), AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AADCG 6387L APPELLANT BY : SHRI VIJAY RANJAN & IRA KAPOOR, A .R. RESPONDENT BY : SHRI MUDIT NAGPAL, SR. D.R. ( )/ ORDER DATE OF HEARING : 01 -11-201 8 DATE OF PRONOUNCEMENT : 31-12-2018 PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-2, AHMEDABAD DATED 31.07.2015 PERTAINING TO A.Y. 2012- 13 AND FOLLOWING GROUNDS HAVE BEEN TAKEN: ITA NO. 2817 /AHD/2015 . A.Y. 2012-13 2 1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) 2 HAS ERRED ON FACTS AS WELL AS IN LAW IN CONFIRMING THE ADDITIONS MADE BY THE LEARNED DY. CIT CIRCLE 2(1)(1) ON A/C OF APPELLANT'S CLAIM OF DEPRECIATION OF RS.2,30,942/- AND ADDITIONAL DEPRECIATION OF RS.3,07,923/- GIVING THE REASON THAT THE MACHINE WAS NOT INSTALLED BEFORE 31/03/2012. 2. 'VIDE POINT NO. 7 OF THE NOTICE U/S. 142(1), THE AS SESSEE WAS ASKED TO FURNISH COMPLETE DETAILS AND EVIDENCES WITH THE COPIES OF T HE BILLS AND VOUCHERS EXCEEDING RS.1,00,00/-. FURTHER, VIDE POINT NO. 18 OF THE NOTICE U/S. 18 OF THE NOTICE U/S. 142(1), THE ASSESSEE WAS ASKED TO FURNI SH JUSTIFICATION FOR THE CLAIM OF ADDITIONAL DEPRECIATION. IN RESPONSE, THE ASSESS EE VIDE LETTER DATED 10/12/2014 FURNISHED THE DETAILS OF ADDITION TO THE ASSETS. FROM THE DETAILS SUBMITTED BY THE ASSESSEE, IT WAS NOTICED THAT THE ASSESSEE HAD MADE AN ADDITION OF LIZ MACHINE IN BLOCK OF PLANT & MACHINE RY OF RS.30,79,226/- ON 30/03/2012 ON WHICH THE ASSESSEE HAD CLAIMED DEP RECIATION AS WELL AS ADDITIONAL DEPRECIATION. SINCE THE ASSESSEE HAD NOT GIVEN ANY DOCUMENTARY EVIDENCES PERTAINING TO INSTALLATION AND PUTTING TO USE OF THE SAID LIZA MACHINE BEFORE 31/03/2012 AND HAD NOT GIVEN ANY EVI DENCE / OF PRODUCTION FROM THE SAID LIZA MACHINE, THE AR OF TH E ASSESSEE WAS ASKED TO FURNISH AND PRODUCE ALL THE RELEVANT DOCUMENTS / PAPERS / THIRD PARTY EVIDENCES / DETAILS TO PROVE THAT THE LIZA MACHINE WAS PUT TO USE ON OR BEFORE 31/03/2012 AND HAD STARTED PRODUCTION ON OR BEFORE 31/03/2012. 3. IN RESPONSE, THE ASSESSEE FILED A REPLY ON 04/02/20 15 WHICH IS REPRODUCED BELOW:- 'THAT THE BILL OF MACHINERY HAVE BEEN ISSUED BY THAK ORE EXPORTS ON 30/03/2012 FOR AMOUNT OF RS.30,79,226/-. HOWEVER, THE DELIVERY HAVE BEEN MADE ON 02/02/2012, 03/02/2012 AND 08-09/02/2012 (COPY OF P ACKING SLIP AND CHALLAN IS ITA NO. 2817 /AHD/2015 . A.Y. 2012-13 3 ENCLOSED) AND ACCORDINGLY THE INSTALLATION IS DONE IN THE MONTH OF FEBRUARY BY THE SUPPLIER OF THE MACHINE AND PRODUCTION IS ACCORDING LY STARTED IN THE MONTH OF FEBRUARY. THE INVOICE OF AMOUNT OF RS.30,79,226/- A LONG WITH CERTIFICATE ISSUED BY THE PARTY THAKORE EXPORTS IS ENCLOSED FOR YOUR K IND VERIFICATION.' THE ABOVE REPLY OF THE ASSESSEE HAS BEEN CAREFULLY CONSIDERED BUT THE SAME IS NOT FOUND ACCEPTABLE AS THE ASSESSEE HAS NOT GIVEN ANY CERTIFICATE OF TECHNICAL EXPERT WITH REGARD TO THE INSTALLATION, TEST AND TRIAL RUN AND PUTTING TO USE OF THE ASSET I.E. LIZA MACHINE ON OR BEFORE 31/03/2012. FURTHER, THE ASSESSEE HAS ALSO NOT GIVEN ANY EVIDENCE OF PRODUCTION FROM THE SAID LIZA MACHINE ON OR BEFORE 31/03/2012. THUS, THE ASSESSEE HAS FAILED TO JUSTIF Y THAT THE PRODUCTION WAS COMMENCED ON OR BEFORE 31/03/2012 BY THE SAID LIZA MACHINE BY WAY OF PRODUCING ANY THIRD PARTY EVIDENCE OR CONCLUSIVE EV IDENCES. THE CONTENTION OF THE ASSESSEE THAT THE MACHINE WAS INSTALLED IN THE MONT H OF FEBRUARY AND THE INVOICE WAS RAISED BY THE PARTY ON 30/03/2012 HAS NO LEGAL VALIDITY IN ABSENCE OF EVIDENCES. THEREFORE, THE CONTENTIONS OF THE ASSESS EE ARE NOT FOUND ACCEPTABLE AND ARE REJECTED IN TOTALITY. IN VIEW OF THE ABOVE, THE CLAIM OF DEPRECIATION TOG ETHER WITH ADDITIONAL DEPRECIATION ON THE AMOUNT OF RS.30,79,226/- IS DIS ALLOWED AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE, THE WORKING OF WH ICH IS GIVEN AS UNDER:- CLAIM OF DEPRECIATION ON RS.30,79,226/- @ 7.5% = RS.2,30,942/- CLAIM OF ADDITIONAL DEPRECIATION @ 10% OF RS.30,79, 226/- = RS.3,07,923/- THUS, A SUM OF RS. 5,38,865/- IS DISALLOWED AND ADD ED BACK TO THE TOTAL INCOME OF THE ASSESSEE 4. IN APPEAL BEFORE THE LD. CIT(A), HE CONFIRMED THE F INDING OF THE A.O. 5. NOW APPELLANT IS BEFORE US. ITA NO. 2817 /AHD/2015 . A.Y. 2012-13 4 6. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMPUGN ED ORDER. AS WE CAN SEE, THE ASSESSEE DERIVES INCOME FROM BUSINESS OF TRADIN G IN FABRICS CLOTH, PROCESSING OF FABRICS ON JOB-WORK . 7. THAT THE LEARNED COMMISSIONER OF INCOME-TAX (A) 2 H AS DISALLOWED THE AMOUNT OF DEPRECIATION AS WELL AS ADDITIONAL DEPREC IATION BASED ON THE FACT THAT MACHINE HAS NOT BEEN INSTALLED IN THE MONTH OF FEBRUARY AND PRODUCTION WAS ALSO NOT STARTED IN THE MONTH OF FEBRUARY. IN T HIS RESPONSE ASSESSEE SUBMITS THAT THE ASSESSEE HAD MADE ADDITION OF LIZA MACHINE IN BLOCK OF PLANT & MACHINERY OF RS. 30,79,226/- IN THE MONTH O F FEBRUARY. THAT THE SAID MACHINERY HAS BEEN DELIVERED & INSTALLED IN THE MON TH OF FEBRUARY ONLY BUT THE BILLS HAVE BEEN ISSUED ON 30/03/2012 & ACCORDINGLY THE PRODUCTION HAS ALSO BEEN STARTED IN THE MONTH OF FEBRUARY ONLY. THAT TH E MACHINERY HAS BEEN PURCHASED FROM THAKORE EXPORTS. THE CERTIFICATE HAS ALSO BEEN ISSUED BY THE PARTY THAKORE EXPORTS THAT INSTALLATION, TEST & TRI AL RUN OF THE SAID ASSET HAS BEING CARRIED OUT IN MONTH OF FEBRUARY. ALL THE REL EVANT DOCUMENTS FOR THE PROOF OF PURCHASE, INSTALLATION & DELIVERY ARE FILE D DURING THE COURSE OF PROCEEDINGS. 8. THAT CIT(A) HAS DISALLOWED DEPRECIATION AND ADDITIO NAL DEPRECIATION ON BASIS OF BILL ISSUED BY THE SUPPLIER ON 30/03/2012 & IN H IS OPINION, WITHOUT PAYING EXCISE DUTY GOODS CANNOT BE REMOVED FROM THE FACTOR Y PREMISES. THAT THE SAID MACHINE HAS BEEN DELIVERED BY THE SUPPLIER IN THE M ONTH OF FEBRUARY 2012, & ALL THE DELIVERY CHALLANS, TRANSPORT RECEIPTS HAVE ALREADY BEEN FILED ALONG WITH SUPPLIER CERTIFICATE FOR INSTALLATION, TRAIL RUN & READY TO USE FOR COMMERCIAL PRODUCTION. ALL THE PAYMENTS OF THE MACHINE HAVE BE EN PAID DURING THE YEAR. AS THE MACHINE HAS BEEN RECEIVED & INSTALLED IN MON TH OF FEBRUARY. ITA NO. 2817 /AHD/2015 . A.Y. 2012-13 5 9. IN OUR CONSIDERED OPINION, ASSESSEE IS ENTITLED FOR DEPRECIATION AND ADDITIONAL DEPRECIATION AND WOULD BE GOVERNED BY SECTION 32 & 32(II). THEREFORE, WE ALLOW THIS GROUND OF APPEAL OF THE ASSESSEE. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 31 - 12- 2018 SD/- SD/- (PRAMOD KUMAR) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPY JUDICIAL MEMBER AHMEDABAD: DATED 31/12/2018 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD