DCIT RG- 12 (1)(1), MUMBAI V. ARCHROMA INDIA PVT. LTD., MUMBAI

ITA 2917/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 1436 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2021
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 06-05-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RA J IV HARIT
• Keywords: Depreciation; Set aside

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI SHRI SHAMIM YAHYA (AM) & SHRI PAVANKUMAR GADALE ( JM) I.T.A. NO. 2917/MUM/2019 (ASSESSMENT YEAR 2015-16) DCIT, CIRCLE-12(1)(1) ROOM NO. 128C 1 ST FLOOR AAYAKAR BHAVAN M.K. ROAD MUMBAI-400 020. VS. M/S. ARCHROMA INDIA PRIVATE LIMITED 9 TH FLOOR, D-BUILDING MBC PARK, GHODBUNDER ROAD, KASARWADAVALI THANE(W), PIN-400 615. PAN : AALCA6844Q (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI MADHUR AGARWAL DEPARTMENT BY SHRI RAJIV HARIT DATE OF HEARING 09.02.2021 DATE OF PRONOUNCEMENT 10.02.2021 O R D E R PER SHAMIM YAHYA (AM) :- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A) DATED 5.2.2019 AND PERTAINS TO ASSESSMENT Y EAR 2015-16. 2. THE GROUNDS OF APPEAL READ AS UNDER :- I) WHETHER ON THE FACTS AND IN CIRCUMSTANCES OF THE CAS E, LD. CIT(A) WAS JUSTIFIED IN CONCLUDING THAT THE SUBJECT MATTER OF THE PR ESENT APPEAL WAS CONSEQUENTIAL IN NATURE THEREBY DIRECTING THE AO TO REWORK THE ALLOWABLE DEPRECIATION BY TAKING THE CLOSING WDV FOR PRECEDING Y EAR AY 2014-15 AS THE OPENING WDV FOR THE RELEVANT YEAR WITHOUT APPRECIAT ING THAT THE DECISION FOR AY 2014-15 HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND APPEAL IS STILL PENDING BEFORE THE HON'BLE ITAT? II) THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CIT(A) ON THE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. LEARNED CIT(A) HAS PASSED FOLLOWING APPELLATE OR DER IN THIS CASE :- I HAVE CONSIDERED THE RIVAL CONTENTIONS. I FIND THAT THE SUBJECT MATTER OF THIS APPEAL IS CONSEQUENTIAL IN NATURE. I FIND THAT THE AP PELLANT CLAIMED DEPRECIATION OF RS. 33,96,90,320/ IN ITS RETURN OF I NCOME. THE AO OBSERVED THAT IN THE ASSESSMENT ORDER FOR THE AY 2014-15, HIS P REDECESSOR HAD DENIED M/S. ARCHROMA INDIA PRIVATE LIMITED 2 DEPRECIATION IN RESPECT OF CERTAIN ITEMS AND HAD REW ORKED THE DEPRECIATION. IN THE ASSESSMENT ORDER FOR THE AY 2015-16, THE AO RECO MPUTED THE ALLOWABLE DEPRECIATION. WHILE COMPUTING DEPRECIATION, THE AO TOOK THE CLOSING WDV AS AT 31.03.2014 (AS PER THE ASSESSMENT O RDER FOR THE AY 2014- 15) AS THE OPENING WDV AS AT 01.04.2014. THE APPELLANT HAS POINTED OUT THAT THE CIT(A) HAD PARTLY ALLOWED ITS APPEAL AGAINST THE DISALLOWANCE OF DEPRECIATION FOR AY 2014-1 5. THE AR CONTENDED THAT THE DEPRECIATION OUGHT TO BE REWORKED BASED ON THE CL OSING WDV AS AT 31.03.2014 AFTER GIVING EFFECT TO THE ORDER OF THE CIT (A) FOR THE AY 2014-15. CONSIDERING THE FACT THAT THE CIT(A) HAD PARTLY ALLOWE D ITS APPEAL AGAINST THE DISALLOWANCE OF DEPRECIATION FOR AY 2014-15, I DIREC T THE AO TO REWORK THE DEPRECIATION TO BE ALLOWED AFTER TAKING THE CLOSING W DV IN PURSUANT TO THE ORDER OF THE CIT(A) DATED 21.08.2018 FOR THE AY 2014 -15 AS THE OPENING WDV AS AT. 4. AGAINST THIS ORDER REVENUE IS IN APPEAL BEFORE U S. 5. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORDS. LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ITAT IN APPEAL FOR PREVIOUS YEAR HAS FURTHER MODIFIED THE LEARNED CIT(A)S ORDER. HE PLEADED THAT THE ASSESSING OFFICER MAY BE DIRECTED TO TAKE THE WDV OF ASSET PU RSUANT TO THAT ORDER FOR THE OPENING WDV OF THOSE ASSET FOR COMPUTING DEPRECIATI ON FOR THE YEAR. 6. LEARNED DEPARTMENTAL REPRESENTATIVE DID NOT HAVE OBJECTION TO THIS PROPOSITION. ACCORDINGLY, WE DIRECT THAT THE WDV OF OPENING BALANCE OF ASSET FOR THIS YEAR MAY BE TAKEN AS THE WDV FOR PREVIOUS YEAR COMPUTED PURSUANT TO ITAT ORDER FOR EARLIER YEAR. 7. IN THE RESULT, THIS APPEAL FILED BY THE REVENUE STANDS PARTLY ALLOWED. ORDER PRONOUNCED UNDER RULE 34(4) OF THE ITAT RULE S BY PLACING THE RESULT ON NOTICE BOARD ON 10.2.2021. SD/- SD/- (PAVANKUMAR GADALE) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED : 10/02/2021 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT M/S. ARCHROMA INDIA PRIVATE LIMITED 3 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR) PS ITAT, MUMBAI