M/s. Nabros Transport Pvt. Ltd., Ahmedabad V. The Deputy Commissioner of Income Tax, Circle-3(1)(1), Ahmedabad

ITA 2847/AHD/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4952 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 15-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K DEV
• Keywords: Depreciation; Set aside
• Section: 143(3)

Judgement Text

, A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MADHUMITA ROY, JUDICIAL MEMBER ./ I.T.A. NO. 2847/AHD/2017 ( / ASSESSMENT YEAR : 2011-12) M/S. NABROS TRANSPORT PVT. LTD. D-1201, TITANIUM SQUARE, THALTEJ CROSS ROAD, THALTEJ, AHMEDABAD - 380054 / VS. DCIT CIRCLE-3(1)(1), AHMEDABAD. ./ ./ PAN/GIR NO. : AAA CN3 724 D ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : ARTI N. SHAH, A.R. / RESPONDENT BY : S.K. DEV, SR. DR / DATE OF HEARING 06/05/2019 !'# / DATE OF PRONOUNCEMENT 28/05/2019 $%/ O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-7, AHMEDAB AD (CIT(A)) IN SHORT), DATED 08.09.2017 ARISING IN THE ASSESSMENT ORDER DATED 24.11.2016 PASSED BY THE ASSESSING OFFICER (AO) UND ER S. 143(3) R.W.S 147 OF THE INCOME TAX ACT, 1961 (THE ACT) CONCERNIN G A.Y. 2011-12. ITA NO.2847/AHD/2017 [M/S. NABROS TRANSPORT PVT. LT D. VS. DCIT] A.Y. 2011-12 - 2 - 2. THE SOLITARY ISSUE IN THE PRESENT APPEAL IS TOW ARDS DISALLOWANCE OF DEPRECIATION AMOUNTING TO RS. 38,07,910/-. 3. THE ASSESSEE IS A PRIVATE LIMITED COMPANY CARRYI NG ON BUSINESS OF TRANSPORTATION SERVICES. THE RETURN FILED BY TH E ASSESSEE FOR A.Y. 2011-12 WAS REOPENED AND SUBJECTED TO SCRUTINY ASSE SSMENT. THE AO INTER ALIA NOTICED THAT ASSESSEE HAS CLAIMED DEPRECIATION OF RS. 54,39,870/- @ 50% ON WRITTEN DOWN VALUE OF RS. 1,08 ,79,739/- ON VEHICLES CATEGORIZED UNDER PLANT AND MACHINERY. IT WAS FURTHER NOTICED BY THE AO THAT THE VEHICLES IN QUESTION WER E PURCHASED IN EARLIER F.Y. 2009-10 ON WHICH ASSESSEE HAS ALREADY CLAIMED DEPRECIATION @ 50% IN A.Y. 2010-11. THE ASSESSEE H AS CONTINUED TO CLAIM DEPRECIATION @ 50% IN THE IMPUGNED ASSESSMENT ORDER 2011-12 AS WELL ON THE REMAINING WDV. IN AN EXPLANATION CA LLED FOR TOWARDS THE ACCELERATED DEPRECIATION CLAIMED @ 50%, THE ASS ESSEE RELIED UPON A NOTIFICATION NO. 37/2009/F. NO. 142/01/2009-TPL R EAD WITH NOTIFICATION NO. 10/2009 DATED 19.01.2009 WHEREBY T HE CBDT HAS AMENDED THE TABLE TO THE NEW APPENDIX-I PRESCRIBING THE RATES AT WHICH DEPRECIATION IS ADMISSIBLE. AS PER THE AFORE SAID NOTIFICATIONS, NEW COMMERCIAL VEHICLE WHICH IS ACQUIRED ON OR AFTE R 01.01.2009 BUT BEFORE 01.10.2009 AND IS PUT TO USE BEFORE 01.10.20 09 FOR THE PURPOSES OF BUSINESS OR PROFESSION WILL GET 50% DEPRECIATION . THE ASSESSEE THUS CLAIMED DEPRECIATION AT HIGHER RATE ON ACQUISITIONS OF COMMERCIAL VEHICLES DURING THE WINDOW PERIOD. HOWEVER, THE AO DID NOT FIND THE ENHANCE CLAIM OF DEPRECIATION @ 50% VALID FOR THE S UBSEQUENT A.Y. ITA NO.2847/AHD/2017 [M/S. NABROS TRANSPORT PVT. LT D. VS. DCIT] A.Y. 2011-12 - 3 - 2011-12 PRESENTLY IN QUESTION. THE AO OBSERVED THA T THE ENHANCED DEPRECIATION WAS VALID FOR ONLY ONE YEAR I.E. PRECE DING ASSESSMENT ORDER 2010-11 ONLY ON THE GROUND THAT NO SEPARATE B LOCK FOR CLAIMING DEPRECIATION @ 50% HAS BEEN INSERTED IN THIS REGARD . THE AO ACCORDINGLY ADOPTED NORMAL RATE OF DEPRECIATION @ 1 5% AND CONSEQUENTLY DISALLOWED EXCESS DEPRECIATION TO THE TUNE OF RS. 38,07,910/- AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 4. THE FIRST APPEAL OF THE ASSESSEE BEFORE THE CIT( A) AGAINST THE AFORESAID ACTION OF THE AO ALSO WENT WITHOUT SUCCES S. 5. FURTHER AGGRIEVED, THE ASSESSEE IS IN APPEAL B EFORE THE TRIBUNAL. 6. THE LD. AR FOR THE ASSESSEE REFERRED TO CLAUSE 3 2(1)(II) TO SUBMIT THAT THE ASSESSEE IS ENTITLED TO SUCH PERCEN TAGE OF DEPRECIATION ON WRITTEN DOWN VALUE OF ASSETS AS MAY BE PRESCRIBE D FOR ANY BLOCK OF ASSETS. IT WAS CONTENDED BY THE LD. AR FOR THE ASS ESSEE WITH REFERENCE TO SEC. 43(6)(C) THAT ONCE THE ASSET FALLS IN ANY B LOCK OF ASSETS, THE ASSESSEE WILL BE ENTITLED TO THE RATE APPLICABLE FO R THE ASSETS FALLING WITHIN THE BLOCK FOR THE PURPOSES OF GRANTING DEPRE CIATION. IT WAS FURTHER CONTENDED WITH REFERENCE TO THE DECISION OF CIT VS. SONAL GUM INDUSTRIES [2010] 322 ITR 542 (GUJARAT) THAT ONCE I T IS FOUND THAT ASSETS ARE USED FOR BUSINESS, IT IS NOT NECESSARY T HAT ALL ITEMS FALLING WITHIN THAT BLOCK HAVE TO BE SIMULTANEOUSLY USED FO R BEING ENTITLED TO DEPRECIATION. THE LD. AR, THEREFORE, REFERRED TO T HE ORIGINAL NOTIFICATION NO. 10/2009, DATED 19.01.2009 AND SUBS EQUENT ITA NO.2847/AHD/2017 [M/S. NABROS TRANSPORT PVT. LT D. VS. DCIT] A.Y. 2011-12 - 4 - MODIFICATION THEREIN TO SUBMIT THAT THE NOTIFICATIO N IN UNEQUIVOCAL TERMS ENABLES DEPRECIATION AT ACCELERATED RATE ON A LL NEW COMMERCIAL VEHICLES ACQUIRED WITHIN THE SPECIFIED PERIOD OF 01 .01.2009 AND 01.10.2009 AND PUT TO USE FOR THE PURPOSES OF BUSIN ESS OR PROFESSION WITHIN THAT PERIOD. IT WAS CONTENDED THAT IN VIEW OF EXPRESS STIPULATIONS MADE IN THE NOTIFICATION BY SEEKING TO AMEND THE TABLE TO NEW APPENDIX-I, THERE WAS NO WARRANT FOR THE AO TO TAKE A DIFFERENT VIEW AND RESTRICT THE DEPRECIATION AT 15% ARTIFICIA LLY WITHOUT ANY RATIONALE. 7. THE LD. DR ON THE OTHER HAND RELIED UPON THE ORD ER OF THE LOWER AUTHORITIES. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. THE ELIGIBILITY OF DEPRECIATION AT ACCELERATED RATE ON NEW COMMERCIAL VEHICLES ACQUIRED BETWEEN 01.01.2009 TO 01.10.2009 IS IN CONTROVERSY. AS NOTED EXTENSIVELY IN EARLIER PARAS, NOTIFICATION NO. 10/2009 ISSUED BY THE CBDT DATED 19.01.2009 ALONG WITH SUBSEQUENT MODIFICATION THEREIN (TOWARDS PERIOD OF ACQUISITION OF ASSET), T HE ASSESSEE IS ENTITLED TO DEPRECIATION @ 50% ON ALL NEW COMMERCIA L VEHICLES ACQUIRED WITHIN THE STIPULATED TIME FRAME. THE TAB LE TO NEW APPENDIX-I PRESCRIBING THE RATES AT WHICH DEPRECIAT ION IS ADMISSIBLE HAS ALSO BEEN SIMULTANEOUSLY AMENDED BY THE CBDT IN EXCISE OF POWERS CONFERRED TO IT BY SEC. 295 OF THE INCOME TA X ACT, 1961. THEREFORE, APPLYING LOWER RATE OF DEPRECIATION IN V ARIANCE WITH THE ITA NO.2847/AHD/2017 [M/S. NABROS TRANSPORT PVT. LT D. VS. DCIT] A.Y. 2011-12 - 5 - SPECIAL RATE OF DEPRECIATION ALLOWANCE DO NOT RESON ATE WITH THE AMENDED POSITION OF LAW. WE THUS, FIND CONSIDERABL E MERIT IN THE PLEA TAKEN ON BEHALF OF THE ASSESSEE AS NOTED IN PRECEDI NG PARAGRAPH. THE ACTION OF REVENUE TO RESTRICT THE HIGHER DEPRECIATI ON TO ONLY FIRST YEAR WHERE ASSETS WERE ACQUIRED IS DEVOID OF SOUND BASIS AND CONTRARY TO THE NOTIFICATION. CONSEQUENTLY, WE SET ASIDE THE O RDER OF THE CIT(A) AND DIRECT THE AO TO RESTORE THE CLAIM OF DEPRECIAT ION ALLOWANCE ON COMMERCIAL VEHICLES AT ACCELERATED PERCENTAGE. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOW ED. SD/- SD/- (MADHUMITA ROY) (PRADIP KUMA R KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 28/05/2019 TANMAY TRUE COPY !' #' / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. $ / ASSESSEE 3. ) *+ , / CONCERNED CIT 4. ,- / CIT (A) 5. 012 33*+, *+#, 56$)$ / DR, ITAT, AHMEDABAD 6. 289 : / GUARD FILE. BY ORDER / $% , ;/5 *+#, 56$)$ < THIS ORDER PRONOUNCED IN OPEN COURT ON 2 8/05/2019