The ITO, Ward-5(3), Ahmedabad V. Royal Manor Hotels & Ind, Limited, Ahmedabad

ITA 2991/AHD/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6715 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 29-04-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 02-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RIGNESH K DAS
• Assessee Lawyers: P M MEHTA
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI D.C. AGRAWAL, ACCOUNTANT MEMBER DATE OF HEARING : 29.4.11 DRAFTED ON: 29.4 .11 ITA NO.2991/AHD/2010 ASSESSMENT YEAR : 2004-05 THE ITO WARD-5(3) AHMEDABAD VS. M/S.ROYAL MANOR HOTEL & INDUSTRIES LTD. AIRPORT CROSS ROAD HANSOL, AHMEDABAD PAN/GIR NO. : AABCR 5304 T ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI RIGNESH K.DAS, D.R. RESPONDENT BY: SHRI P.M. MEHTA O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE REVENUE WH ICH HAS EMANATED FROM THE ORDER OF THE LEARNED CIT(APPEALS) -I, AHMEDABAD DATED 28/08/2010 PASSED FOR ASSESSMENT YEAR 2004-05 AND THE SUBSTANTIVE GROUND WHICH IS ARGUED BEFORE US IS GRO UND NO.1; REPRODUCED BELOW:- 1. THE LD. COMMISSIONER OF INCOME TAX (A)-I, AHME DABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDIT ION TO THE EXTENT OF RS.24,51,262/- MADE ON ACCOUNT OF DEPREC IATION ON ELECTRIC FITTINGS. 2.1. FACTS IS BRIEF AS EMERGED FROM THE CORRESPONDI NG ASSESSMENT ORDER PASSED U/S.143(3) OF THE ACT DATED 15/11/2006 WERE THAT THE ITA NO.2991/AHD /2010 ITO VS. M/S.ROYAL MANOR HOTELS & INDS.LTD. ASST.YEAR 2004-05 - 2 - ASSESSEE-COMPANY IS IN THE HOTEL BUSINESS. THE AS SESSEE HAS CLAIMED DEPRECIATION ON ELECTRIC INSTALLATIONS @ 25 %, WHEREAS AS PER AO THE RATE APPLICABLE WERE 15%. THE A.O.HAS WOR KED OUT THE EXCESS CLAIM OF DEPRECIATION AND THE IMPUGNED ADDIT ION WAS MADE. 3. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APP ELLATE AUTHORITY, FEW CASE LAWS WERE DISCUSSED AS ALSO THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE AND THE DISALLOWANC E WAS RESTRICTED TO RS.33,198/- AND BALANCE WAS DELETED AS PER THE F OLLOWING OBSERVATION:- 4.2. I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDER AND THE SUBMISSIONS MADE BY THE APPELLANT. THE APPELL ANT IS ENGAGED IN HOTEL BUSINESS, AND THEREFORE, APPELLANT SUBMITTED THAT ELECTRIC INSTALLATION THEREIN CONSTITUTED PLAN T AND FALLS IN THE CATEGORY OF PLANT & MACHINERY ON WHICH DEPRECIA TION @ 25% IS ALLOWABLE. THE APPELLANT HAS POINTED OUT TH AT SIMILAR ISSUE HAS ARISEN IN THE CASE OF APPELLANT IN A.Y. 2 002-03 AND HON.ITAT D BENCH, AHMEDABAD, IN ITA NO.881/AHD/2006 , VIDE ORDER DATED 20 TH OCTOBER 2006 HAD HELD THAT DECISION IN THE CASE OF M/S.GEETA HOTELS 254 ITR 649 IS APPLICA BLE AND ELECTRIC INSTALLATION IN THE HOTEL ARE IN THE CATEG ORY OF PLANT. SIMILAR ISSUE HAS ALSO ARISEN IN THE CASE OF THE AP PELLANT IN A.Y. 2003-04, WHEREIN CIT(A)-VIII, VIDE HIS ORDER D ATED 7 TH FEBRUARY 2007 HAS HELD AS PER RATIO OF THE DECISION OF THE SUPREME COURT IN CASE OF TAJ MAHAL HOTELS AND IN TH E CASE OF GEETA HOTELS PVT.LTD., APPELLANT IS ENTITLED TO DEP RECIATION @ 25% ON ELECTRIC INSTALLATION USED IN HOTEL. AND AP PEAL FILED BY DEPARTMENT AGAINST SUCH ORDER IS DISMISSED BY HON'B LE ITAT IN ITA NO.1959/AHD/2007 VIDE ORDER DATED 13 TH APRIL 2010. ITA NO.2991/AHD /2010 ITO VS. M/S.ROYAL MANOR HOTELS & INDS.LTD. ASST.YEAR 2004-05 - 3 - 4.3. BEFORE ME, THE APPELLANT HAS ALSO SUBMITTED RE VISED CHART OF DEPRECIATION WHEREIN IT HAS BIFURCATED ELE CTRIC INSTALLATION BEING PLANT & MACHINERY ELIGIBLE FOR D EPRECIATION @ 25% AND ELECTRIC FITTINGS OTHER THAN PLANT & MACH INERY ELIGIBLE FOR DEPRECIATION @ 15%. AS PER REVISED CH ART, THE APPELLANT IS ENTITLED TO DEPRECIATION AT RA.51,46,0 58/- AS AGAINST ORIGINAL CLAIM OF APPELLANT FOR RS.51,79,26 6/-. RESPECTFULLY FOLLOWING THE DECISION OF HON.ITAT IN APPELLANTS OWN CASE, ORDER OF MY PREDECESSOR CIT(A) AND AFTER CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE APPE LLANTS CASE, APPELLANT IS ENTITLED TO DEPRECIATION @ 25% O N ELECTRIC INSTALLATION AND DISALLOWANCE IS REQUIRED TO BE RES TRICTED TO THE BLOCK OF ELECTRIC FITTINGS AND CONSIDERING SAME , DISALLOWANCE IS RESTRICTED TO RS.33,198/- AS PER RE VISED CHART AND BALANCE AMOUNT OF RS.24,51,262/- IS THEREFOR4E DELETED. THE GROUND OF APPEAL IS ALLOWED ACCORDINGLY. 4. ON HEARING THE SUBMISSIONS OF BOTH THE SIDE S, WE FIND NO FALLACY IN THE JUDGEMENT OF LD.CIT(A) SPECIALLY WHE N HE HAS FOLLOWED THE PAST HISTORY OF THE CASE AS SETTLED BY THE RESPECTED CO- ORDINATE BENCHES. WE FIND NO FORCE IN THE ARGUM ENT OF THE REVENUE AND, THEREFORE, DISMISSED. 5. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 29 / 4 /2011. SD/- SD/- ( D.C. AGRAWAL) ( MUKUL KR. SH RAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBE R AHMEDABAD; DATED 29 / 04 /2011 T.C. NAIR, SR. PS ITA NO.2991/AHD /2010 ITO VS. M/S.ROYAL MANOR HOTELS & INDS.LTD. ASST.YEAR 2004-05 - 4 - COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE DEPARTMENT. 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-I, AHMEDBAD 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD 1. DATE OF DICTATION..29.4.11 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 29.4.11 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S29.4.11 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 29.4.11 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER