The ACIT,Sabarkantha Circle, Himatnagar V. Regent Granito (India)Ltd., Sabarkantha

ITA 2968/AHD/2011

• Counselvise Citation: 296820514 RSA 2011
• Duration Of Justice: 3 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 02-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 30-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANTOSH KARNANI
• Assessee Lawyers: S N DIVATIAAR
• Keywords: Depreciation

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD .. , ( .) , BEFORE SHRI G.D. AGARWAL,VICE PRESIDENT (AZ) AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ I.T.A. NO.2968/AHD/2011 ( / ASSESSMENT YEAR : 2008-09) THE ASST.COMMISSIONER OF INCOME-TAX SABARKANTHA CIRCLE, HIMATNAGAR / VS. REGENT GRANITO (INDIA) LTD. HAJIPUR, NEAR SABAR DAIRY DIST.SABARKANTHA % & ./ ./ PAN/GIR NO. : AACCR 5441 B ( %( / APPELLANT ) .. ( )*%( / RESPONDENT ) %( + / APPELLANT BY : SHRI SANTOSH KARNANI, SR.DR )*%( , + / RESPONDENT BY : SHRI S.N. DIVATIA, A.R. -. , /& / DATE OF HEARING 02/07/2015 0123 , /& / DATE OF PRONOUNCEMENT 03/07/2015 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-VIII, AHMEDA BAD (CIT(A) IN SHORT) DATED 22/09/2011 PERTAINING TO ASSESSMEN T YEAR (AY) 2008-09. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL:- 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN ALL OWING THE CLAIM OF ASSESSEE FOR DEDUCTION OF DEPRECIATION OF RS.14, 68,762/- WITHOUT ITA NO.2968/AHD /2011 THE ACIT VS. REGENT GRANITO (INDIA) LTD. ASST.YEAR 2008-09 - 2 - APPRECIATING THE FACT THAT SEPARATE RATES FOR DEPRE CIATION ARE PROVIDED FOR THE BLOCK OF ELECTRIFICATION EQUIPMENT S WHICH IS 10%. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFF ICER. 3. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD.C IT(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER MAY BE REST ORED TO THE ABOVE EXTENT. 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE AS SESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 24/11/2010, THEREBY THE ASSESSING OFFICER (AO IN SHORT) MADE DISALLOWANCE(S) ON ACCOUNT OF EXCESS DEPRECIATION O N OLD AND NEW ELECTRIC INSTALLATION AMOUNTING TO RS.14,68,762/-/ THE AO WHILE MAKING DISALLOWANCE ADOPTED THE RATE OF DEPRECIATION AT 10 %. AGAINST THIS, THE ASSESSEE FILED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS AND FOLLOWING THE EARLIER YEARS DECISI ON OF HIS PREDECESSOR, ALLOWED THE APPEAL. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), NOW THE REVENUE IS IN APPEAL BEFORE US. 3. APROPOS TO GROUND NO.1, THE LD.SR.DR SUPPORTED T HE ORDER OF THE AO. 3.1. ON THE CONTRARY, LD.COUNSEL FOR THE ASSESSEE S HRI S.N.DIVATIA SUPPORTED THE ORDER OF THE LD.CIT(A) AND SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF ASSESSEE. HE SUBMITTED THAT T HE LD.CIT(A) HAS ITA NO.2968/AHD /2011 THE ACIT VS. REGENT GRANITO (INDIA) LTD. ASST.YEAR 2008-09 - 3 - FOLLOWED THE DECISION OF HIS PREDECESSOR PASSED IN AY 2007-08. THE REVENUE HAD CHALLENGED THE ORDER OF LD.CIT(A) PASSE D IN AY 2007-08 BEFORE THIS TRIBUNAL (ITAT A BENCH-AHMEDABAD) BY WAY OF ITA NO.280/AHD/2011 AND THIS TRIBUNAL WAS PLEASED TO RE JECT THE GROUND OF THE REVENUE AND CONFIRM THE ORDER OF THE LD.CIT(A). 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT TH E LD.CIT(A) HAS FOLLOWED HIS PREDECESSORS ORDER PASSED IN AY 2007- 08. THE OPERATING PORTION OF THE IMPUGNED ORDER OF THE LD.CIT(A) IS R EPRODUCED HEREUNDER:- I HAVE BEEN CAREFULLY CONSIDERED THE FACTS OF THE CASE AND SUBMISSION OF THE APPELLANT. THE IDENTICAL ISSUE WAS INVOLV ED IN AY 2007-08 AND THE APPEAL WAS DECIDED BY MY PREDECESSOR CIT(A) VID E ORDER NO.CIT(A)-VIII/DCIT/S.K.CIR./143/09/10 AND AS PER O RDER DATED 23/11/10, THE CLAIM OF DEPRECIATION WAS ALLOWED AFT ER CONSIDERING THE ABOVE FACTS. IN VIEW OF THE DISCUSSION HELD ABOVE AND PARTICULARLY WITH REFERENCE TO THE DECISION OF JURISDICTIONAL ITAT TH E ADDITION MADE BY THE A.O. ON ACCOUNT OF DEPRECIATION IS DELETED. THE AP PELLANT GETS RELIEF OF RS.14,68,762/-. 4.1. WE FIND THAT THE REVENUE IN AY 2007-08 HAD CHA LLENGED THE ORDER IN ITA NO.280/AHD/2011 AND THE GROUND SO RAISED BEF ORE THE TRIBUNAL AS GROUND NO.1.1 IS REPRODUCED HEREUNDER:- 1.1. THE LEARNED CIT(A)-VIII, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF DEPRECIATI ON OF RS.2,96,968/- MADE BY THE ASSESSING OFFICER BY ALLO WING DEPRECIATION @ 10% ON ELECTRICAL FITTINGS INSTEAD O F 15% CLAIMED ITA NO.2968/AHD /2011 THE ACIT VS. REGENT GRANITO (INDIA) LTD. ASST.YEAR 2008-09 - 4 - BY THE ASSESSEE, WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND THE MATERIAL BROUGHT ON RECORD BY THE ASSESSING OFFICER. 4.2. THE HONBLE COORDINATE BENCH IN ITA NO.280/AHD /2011 FOR AY 2007-08 VIDE ORDER DATED 31/12/2014, AFTER CONSIDER ING THE SUBMISSIONS, DECIDED THE ISSUE AS UNDER:- 3.2. AFTER GOING THROUGH THE RIVAL SUBMISSION AND THE MATERIALS ON RECORD, WE FIND THAT ASSESSEE HAS CLAIMED DEPRECIAT ION @ 15% ON ELECTRIC INSTALLATION WHEREAS ASSESSING OFFICER HAS ALLOWED DEPRECIATION @10% INTER ALIA STATING THAT ELECTRIC INSTALLATION IS A SEPARATE BLOCK AND CORRECT RATE OF DEPRECIATION FOR THAT BLOCK IS ONLY 10% AND ACCORDINGLY HE DISALLOWED DEPRECIATION @5% WHICH WO RKED OUT TO RS.2,96,968/-. THE STAND OF THE ASSESSEE IS THAT I MPUGNED ELECTRIC INSTALLATION IS PART OF PLANT AND MACHINERY; THEREF ORE, DEPRECIATION SHOULD BE ALLOWED @15%. IN APPEAL CIT(A) OBSERVED THAT IMPUGNED ELECTRIC INSTALLATION IS A PART OF PLANT AND MACHIN ERY. ASSESSING OFFICER HAS NOT GIVEN NEGATIVE FINDING IN THIS REGARD. HAV ING CONSIDERED THE FACTS AND LAW ON THE RECORDS CIT(A) WAS JUSTIFIED I N HOLDING THAT ELECTRIC INSTALLATION UNDER SUBJECT IS INTEGRATED P ART OF PLANT AND MACHINERY. IN ABSENCE OF ELECTRICITY INSTALLATION THE PLANT CANNOT RUN AND ACCORDINGLY ASSESSEE RIGHTLY CLAIMED DEPRECIATI ON @15%. THIS REASONED FINDING OF CIT(A) WHEREBY IT HAS HELD IN C ASE ELECTRIC INSTALLATION IS THE PART AND PARCEL OF PLANT AND MA CHINERY THEN ASSESSEE IS ENTITLED FOR DEPRECIATION @15% WHICH IS APPLICAB LE TO PLANT AND MACHINERY. THIS REASONED FINDING NEED NO INTERFERE NCE FROM OUR SIDE, WE UPHOLD THE ORDER OF CIT(A) ON THIS ISSUE. 4.3. SINCE THE REVENUE HAS NOT PLACED ANY MATERIAL ON RECORD SUGGESTING THAT THERE IS CHANGE INTO THE FACTS AND CIRCUMSTANCES IN THIS YEAR, THEREFORE TAKING A CONSISTENT VIEW, WE DO NOT SEE ANY REASON TO ITA NO.2968/AHD /2011 THE ACIT VS. REGENT GRANITO (INDIA) LTD. ASST.YEAR 2008-09 - 5 - INTERFERE WITH THE ORDER OF THE LD.CIT(A), SAME IS HEREBY UPHELD. THUS, GROUND RAISED IN THE REVENUES APPEAL IS REJECTED. 5. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED . ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 3 RD DAY OF JULY, 2015 AT AHMEDABAD. SD/- SD/- ( .. ) ( ) ( . ) ( G.D. AGARWAL ) ( KUL BHARAT ) VICE PRESIDENT (AZ) JUDICIAL MEMBER AHMEDABAD; DATED 3/ 07 /2015 6/..-, .-../ T.C. NAIR, SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. %( / THE APPELLANT 2. )*%( / THE RESPONDENT. 3. 789 : / CONCERNED CIT 4. : ( ) / THE CIT(A)-VIII, AHMEDABAD 5. ;< )-89 , / 893 , 7 / DR, ITAT, AHMEDABAD 6. <= >. / GUARD FILE. / BY ORDER, *; ) //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD