DCIT, New Delhi V. M/s. Alpha Woovens Lables (P) Ltd., New Delhi

ITA 2857/DEL/2012

• Counselvise Citation: 285720114 RSA 2012
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 08-08-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 08-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS ANUSHA KHURANA
• Assessee Lawyers: ASHEEM CHAWLA
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI R.K. GUPTA AND SHRI A.N. PAHUJA ITA NO. 2857/DEL/12 A.YR. 2008-09 DCIT, CIR. 1(1), VS. M/S ALPHA WOOVENS LABLES NEW DELHI. (P) LTD., 46/7, OKHLA INDL. AREA, PHASE-II, NEW DELHI. PAN/ GIR NO. AAACA7707M ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : MRS. ANUSHA KHURANA SR. DR RESPONDENT BY : SHRI ASHEEM CHAWLA CA O R D E R PER R.K. GUPTA, J.M: : THIS IS REVENUES APPEAL AGAINST CIT(A)S ORDER DA TED 29-3-2012 RELATING TO ASSESSMENT YEAR 2008-09. 2. THE DEPARTMENT IS OBJECTING THE DELETION OF DISA LLOWANCE OF RS. 22,40,256/- MADE BY THE ASSESSING OFFICER ON ACCOU NT OF DEPRECIATION CLAIMED ON PLANT & MACHINERY BEING PUT TO USE FOR L ESS THAN 180 DAYS. 3. THE ASSESSEE CLAIMED DEPRECIATION OF RS. 44,80,5 11/- ON NEW PLANT & MACHINERY, WHICH WAS INSTALLED AND USED BY THE ASSE SSEE COMPANY DURING THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER NOTICING THAT COMMERCIAL PRODUCTION STARTED FROM 28-12-2007, THUS THE MACHINERY WAS USED FOR LESS THAN 180 DAYS. ACCORDINGLY, ALLOWED DEPRECIATION AT 50% AND REMAINING 50% AMOUNTING TO RS. 22,40,256/- WAS DISA LLOWED. 2 4. DETAILED SUBMISSIONS WERE FILED BEFORE CIT(A) W HICH HAVE BEEN INCORPORATED IN HIS ORDER IN PARA 4.1. RELIANCE WAS PLACED ON VARIOUS CASE LAWS I.E. 326 ITR 297; 122 TAXMAN 230; AND 164 TAXM AN 567. CIT(A) AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERI AL ON RECORD FOUND THAT ASSESSEE IS ENTITLED FULL DEPRECIATION AS TRIAL PRO DUCTION WAS DONE ON 23-6- 2007. IT WAS FURTHER SEEN THAT ASSESSEE HAD SOLD MA TERIAL TO M/S LASSER OF SWITZERLAND VIE BILL DATED 11-6-2007. COPY OF BILL OF LADING DATED 23-6- 2007; COPY OF BILL OF ENTRY DATED 26-7-2007; COPY O F BANK STATEMENT SHOWING DEBIT OF CUSTOMS DUTY ON 27-7-2007; COPY OF TRANSPO RTERS BILL DATED 30-7- 2007 FOR TRANSPORT FROM AIRPORT TO BHIWADI WAS FILE D. COPY OF CERTIFICATE ISSUED BY DGFT, NEW DELHI DATED 23-7-2007 WAS ALSO FILED. IT WAS SEEN BY CIT(A) THAT ALL TH4ESE DETAILS WERE FILED BEFORE AS SESSING OFFICER . HOWEVER, HE HAS NOT CONSIDERED. ACCORDINGLY, CIT(A) HELD TH AT MACHINERY HAD BEEN PUT TO USE FOR MORE THAN 180 DAYS AND THEREFORE ASS ESSEE WAS ENTITLED TO FULL DEPRECIATION. NOW DEPARTMENT IS IN APPEAL BEFORE T HE TRIBUNAL. 5. LD. DR PLACED RELIANCE ON THE ORDER OF ASSESSING OFFICER . IT WAS FURTHER SUBMITTED THAT THOUGH TRIAL PRODUCTION WAS DONE BUT IN FACT MACHINERY WAS PUT TO USE PRACTICALLY ON 31-12-2007. ACTUAL USER HAS TO BE SEEN. IN SUPPORT OF THIS CONTENTION RELIANCE WAS PL ACED ON THE RATIO OF DECISIONS IN 231 ITR 298; 260 ITR 655; AND 267 ITR 76F7. 6. ON THE OTHER HAND, LD. AR OF THE ASSESSEE PLACED RELIANCE ON THE ORDER OF CIT(A). 7. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING T HE MATERIAL ON RECORD, WE FIND NO INFIRMITY IN THE FINDING OF LD. CIT(A). LD. CIT(A) HAS ASCERTAINED THAT TRIAL PRODUCTION WAS DONE MUCH EAR LIER I.E. BEFORE 30-9- 2007. AS THE MATERIAL WHICH WAS PRODUCED ON ACCOUNT OF TRIAL PRODUCTION WAS SOLD VIDE INVOICE DATED 11-6-2007. ALL THE DETA ILS PROVING THAT TRIAL 3 PRODUCTION WAS DONE BEFORE 30-9-2007 WERE FILED, WH ICH HAVE BEEN MENTIONED SOME WHERE ABOVE ALSO IN THIS ORDER. PAYM ENT ON ACCOUNT OF TRIAL BALANCE WAS RECEIVED ON 31-10-2007 OF RS. 3,43,736/ -. ALL THESE EVIDENCES PROVE THAT TRIAL PRODUCTION WAS DONE BEFORE 30-9-20 07.IT MEANS THE MACHINERY WAS PUT TO USE FOR MORE THAN 180 DAYS. 8. REGARDING VARIOUS CASE LAWS RELIED UPON BY LD. D R, WE FIND THAT THEY ARE DISTINGUISHABLE ON FACTS. RATHER THEY ARE IN SU PPORT OF THE CASE OF THE ASSESSEE. IN THESE CASES IT HAS BEEN HELD THAT THER E SHOULD BE ACTUAL USER OF MACHINERY. ACTUAL USE OF MACHINERY WAS DONE BEFORE 30-9-2007 WHEN THE MACHINERY WAS PUT TO USE FOR TRIAL PRODUCTION. THER EFORE, THE RATIO OF THESE CASES WAS IN FAVOUR OF THE ASSESSEE AND NOT IN FAVO UR OF THE DEPARTMENT. IN VIEW OF THESE FACTS AND CIRCUMSTANCES AND IN VIEW O F THE FINDING GIVEN BY LD. CIT(A) WE UPHOLD HIS ORDER. 9. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS D ISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 09-08-2012. SD/- SD/- ( A.N. PAHUJA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 09-08-2012. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR 4