DCIT Circle 18 (1), V. Whirlpool of India Ltd,

ITA 3087/DEL/2007

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9835 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 04-08-2009
• Assessment Year: 1999-2000
• Appeal Filed On: 22-06-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHSIN ALAM
• Assessee Lawyers: DHRUV SANGHAVI CAS
• Keywords: Depreciation
• Section: 43B; 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `I : NEW DELHI) BEFORE SHRI I.P. BANSAL, JUDICAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NOS.2084 & 3087/DEL./2007 (ASSESSMENT YEARS : 1997-98 & 1999-2000) DCIT, CIRCLE 18(1), VS. M/S WHIRLPOOL OF INDIA L TD., NEW DELHI. 7 TH FLOOR, ATMA RAM HOUSE, NEW DELHI. (PAN/GIR NO.AACK1024B) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AJAY VOHRA, ADV., S/SH. AVDHESH BANSAL & DHRUV SANGHAVI, CAS. REVENUE BY : SHRI MOHSIN ALAM, CIT(DR) ORDER PER BENCH : BOTH THE APPEALS OF THE REVENUE ARE DIRECTED AGAINS T THE TWO SEPARATE ORDERS OF THE LD.COMMISSIONER OF INCOME-TAX (APPEALS)-IX, NEW DEL HI DATED 11.1.2007 FOR ASSESSMENT YEAR 1997-98 AND DATED 26.3.2007 FOR AS SESSMENT YEAR 1999-2000. FOR THE SAKE OF CONVENIENCE, BOTH THESE APPEALS ARE BEING D ISPOSED OF BY THIS COMMON ORDER. 2. FIRST, WE TAKE UP APPEAL FOR ASSESSMENT YEAR 199 7-98 IN ITA NO.2084/DEL./2007. GROUND NO.1 OF THE APPEAL READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN ALLOWING THE ASSESSEE NOT TO CLAIM DEPRECIATION OF RS.23,38,88,128. 3. BRIEFLY STATED, THE FACTS ARE THAT IT IS NOTED B Y THE ASSESSING OFFICER IN PARA.5 IN THE ASSESSMENT ORDER THAT AS PER THE RETURN OF INCO ME FILED BY THE ASSESSEE, IT IS SEEN THAT THE ASSESSEE HAS FOREGONE DEPRECIATION WHICH AS PER BOOKS COMES TO RS.1535.33 LAKHS. THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN AS TO WHY DEPRECIATION SHOULD NOT BE ALLOWED AS IT WAS A STATUTORY DEDUCTION PROVIDED IN THE ACT FOR DETERMINING TAXABLE INCOME OF THE ASSESSEE. IN REPLY, IT WAS SUBMITTED BY THE LD.AR OF THE ASSESSEE THAT ITA NOS.2084 & 3087/DEL./2007 (A.YS. 1997-98 & 1999-2000) 2 PRIOR TO ITS AMENDMENT BY FINANCE ACT, 1998, SECTIO N 32 SPECIFICALLY PROVIDED THAT IN RESPECT OF DEPRECIATION OF BUILDING, MACHINERY, PLA NT OR FURNITURE OWNED BY THE ASSESSEE AND USED FOR THE PURPOSE OF BUSINESS, DEDUCTION SHA LL BE ALLOWED SUBJECT TO PROVISIONS OF SECTION 34 OF THE ACT. IT WAS SUBMITTED THAT THE A LLOWANCE CAN BE GIVEN ONLY WHEN IT IS CLAIMED. IT WAS ALSO SUBMITTED THAT UNDER SECTION 32, THE ASSESSING OFFICER CANNOT FORCE IT UPON THE ASSESSEE. RELIANCE WAS PLACED ON THE J UDGMENT OF THE HONBLE BOMBAY HIGH RENDERED IN THE CASE OF CIT VS. SOMESHWAR SAHKARI K ARKHANA LTD., 177 ITR 443. THE ASSESSING OFFICER DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE. IT IS NOTED BY HIM THAT THE CASE LAW QUOTED BY THE ASSESSEE PERTAINED TO A PERIOD WHEN SECTION 34 WAS ON STATUTE BOOK. AFTER THE DELETION OF THIS SECTION W.E.F. 1. 4.1988, DEPRECIATION SHALL BE GRANTED EVEN IF THE PRESCRIBED PARTICULARS HAVE NOT BEEN FU RNISHED. THE ASSESSING OFFICER THRUSTED UPON THE ASSESSEE OF THE DEPRECIATION OF RS.2338.88 LAKHS. 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS). BEFORE THE C OMMISSIONER OF INCOME-TAX (APPEALS), RELIANCE WAS PLACED ON THE JUDGMENT OF T HE HONBLE APEX COURT RENDERED IN THE CASE OF CIT VS. MAHINDRA MILLS, 243 ITR 56. RE LIANCE WAS ALSO PLACED ON THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT RENDERED IN THE CASE OF CIT VS. SOMESHWAR SEHKARI KARKHANA LTD., (SUPRA). RELIANCE WAS ALSO PLACED ON THE JUDGMENT OF THE HONBLE MADRAS HIGH COURT RENDERED IN THE CASE OF CIT VS. SREE SENHAVALLI TEXTILES PVT. LTD., 259 ITR 77 AND OF THE HONBLE KERALA HIGH CO URT IN THE CASE OF CIT VS. KERALA ELECTRIC LAMP WORKS LTD., 261 ITR 721. THE COMMISS IONER OF INCOME-TAX (APPEALS) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. I T IS OBSERVED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) IN PARA.9 OF HIS ORDER THAT SO ME OF THE HIGH COURTS RELIED UPON BY THE LD.AR OF THE ASSESSEE HAVE HELD THAT THE AMENDM ENT OF SECTION 32 WHEREBY EXPLANATION 5 HAS BEEN INSERTED IS PROSPECTIVE IN N ATURE AND WILL NOT BE EFFECTIVE IN ASSESSMENT YEARS PRIOR TO 1.4.2002. ON THIS BASIS, THE COMMISSIONER OF INCOME-TAX (APPEALS) DECIDED THIS ISSUE IN FAVOUR OF THE ASSES SEE. NOW, THE REVENUE IS IN APPEAL BEFORE US. 5. BEFORE US, IT WAS SUBMITTED BY THE LD.DR OF THE REVENUE THAT EXPLANATION 5 TO SECTION 32 IS EFFECTIVE FROM ASSESSMENT YEAR 2002-0 3, BUT IS CLARIFICATORY IN NATURE. HENCE, APPLICABLE IN THE PRESENT YEAR ALSO. HE SUP PORTED THE ASSESSMENT ORDER. AS AGAINST ITA NOS.2084 & 3087/DEL./2007 (A.YS. 1997-98 & 1999-2000) 3 THIS, LD. AR OF THE ASSESSEE SUPPORTED THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS). IT WAS HIS SUBMISSION THAT EXPLANATION 5 TO SECTION 32(1) IS APPLICABLE FROM ASSESSMENT YEAR 2002-03 AND IT IS PROSPECTIVE IN NA TURE. IN SUPPORT OF THIS CONTENTION, RELIANCE WAS PLACED BY HIM ON VARIOUS JUDICIAL PRON OUNCEMENT AS UNDER: CIT VS. SREE SENHAVALLI TEXTILES PVT. LTD., 259 ITR 77 (MAD.) CIT VS. KERALA ELECTRIC LAMP WORKS LTD., 261 ITR 72 1 (KER.) RAM NATH JINDAL VS. DCIT (2001), 252 ITR 590 (P&H) CIT VS. FRIENDS CORPORATION, 180 ITR 334 (P&H) PARKSONS PRESS VS. ITO, 12 SOT 128 (MUM.) DCIT VS. SEAGRAM DISTILLERIES LTD. IN ITA NO.2532/D /06,AY.2001-02 ACIT VS. KRBL LTD. IN ITA NOS.3771 TO 3777/DEL./200 6. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL PLACED ON RECORD. WE FIND THAT EXPLANATION 5 HAS BEEN INSERTED IN SEC TION 32(1) BY FINANCE ACT, 2001 W.E.F. 1.4.2002. EXPLANATION 5 READS AS UNDER: FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED T HAT THE PROVISIONS OF THIS SUB- SECTION SHALL APPLY WHETHER OR NOT THE ASSESSEE HAS CLAIMED THE DEDUCTION IN RESPECT OF DEPRECIATION IN COMPUTING HIS TOTAL INCO ME. IT WAS HELD BY VARIOUS HIGH COURTS RELIED UPON BY T HE LD.AR OF THE ASSESSEE AS NOTED ABOVE THAT THE ABOVE EXPLANATION IS PROSPECTIVE IN NATURE. NO CONTRARY JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT OR OF THE HON'BLE APEX COURT OR OF ANY OTHER HIGH COURT WAS BROUGHT TO OUR NOTICE AND HENCE RESPECTFU LLY FOLLOWING THE JUDGMENTS OF VARIOUS HIGH COURTS AND THE TRIBUNAL CITED ABOVE, W E UPHOLD THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) ON THIS ISSUE. THIS GROUND OF THE REVENUE IS REJECTED. 7. GROUND NO.2 OF THE REVENUES APPEAL READS AS UND ER: ON THE FACTS AND IN THE CIRCUMSTANCES O THE CASE, THE LD.CIT(A) HAS ERRED IN ALLOWING THE DEPRECATION OF RS.5,66,095 U/S 43A ON INCREASED COST OF ASSETS DUE TO FOREIGN EXCHANGE RATE. 8. LD.DR OF THE REVENUE SUPPORTED THE ASSESSMENT OR DER WHEREAS IT IS SUBMITTED BY THE LD.AR OF THE ASSESSEE THAT THIS ISSUE IS NOW C OVERED IN FAVOUR OF THE ASSESSEE BY THE ITA NOS.2084 & 3087/DEL./2007 (A.YS. 1997-98 & 1999-2000) 4 JUDGMENT OF THE HON'BLE APEX COURT IN THE CASE OF C IT VS. WOODWARD GOVERNORS INDIA PVT. LTD., REPORTED IN 312 ITR 254. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE GON E THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND THE JUDGMENT OF THE HON'BLE A PEX COURT CITED BY THE LD.AR OF THE ASSESSEE AND WE FIND THAT THIS ISSUE IS NOW COVER ED IN FAROUR OF THE ASSESSEE BY THE JUDGMENT OF HON'BLE APEX COURT NOTED ABOVE AND HENC E WE FIND NO REASON TO INTERFERE IN THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEAL S) ON THIS ISSUE. THIS GROUND OF THE REVENUE IS ALSO REJECTED. 10. GROUND NO.3 OF THE REVENUES APPEAL READS S UND ER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN ALLOWING A RELIEF OF RS.27,19,371 OUT OF TOTAL DISA LLOWANCE OF RS.39,71,698 MADE BY THE ASSESSING OFFICER BEING PRIOR PERIOD EXPENSE S. 11. BRIEFLY STATED, THE FACTS ARE THAT IT IS NOTED BY THE ASSESSING OFFICER IN PARA.4 OF THE ASSESSMENT ORDER THAT THE ASSESSEE HAS CLAIMED DEDUCTION OF RS.39,71,697 ON ACCOUNT OF BANK CHARGES. IT IS ALSO NOTED BY THE ASSESSING OFFICER THAT AS PER THE TAX AUDIT REPORT THIS EXPENDITURE WAS INCURRED DURING ASSESSMENT YEA R 1996-97. THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN AS TO HOW THIS AMOUNT COULD BE SAID TO HAVE CRYSTALIZED DURING THIS YEAR. IN REPLY, IT WAS SUBMITTED BY TH E LD.AR OF THE ASSESSEE THAT THESE CHARGES PERTAINED TO THE SERVICES RENDERED BY THE B ANK DURING ASSESSMENT YEAR 1996-97 AND IT WAS ERRONEOUSLY TAKEN FOR THE SERVICES RENDE RED IN ASSESSMENT YEAR 1997-98. THIS REPLY OF THE ASSESSEE SHOWS THAT IT HAS NOT BEEN A BLE TO ESTABLISH THAT THIS EXPENDITURE IN FACT CRYSTALLIZED DURING THIS YEAR. THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE TO THIS EXTENT. 12. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R IN APPEAL BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS). IT WAS SUBMI TTED BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS) THAT OUT OF THIS AMOUNT OF RS. 39,71,697, AN AMOUNT OF RS.27,19,371 WAS PERTAINING TO BANK CHARGES BY CORP ORATION BANK, MADRAS DURING MARCH, 1995 TO DECEMBER, 1996 AS APPEARING IN THE B ANK RECONCILIATION STATEMENT. IT WAS EXPLAINED BY THE ASSESSEE BEFORE THE COMMISSIONER O F INCOME-TAX (APPEALS) THAT PURSUANT TO AMALGAMATION APPROVED BY THE HONBLE DE LHI HIGH COURT BY ORDER DATED ITA NOS.2084 & 3087/DEL./2007 (A.YS. 1997-98 & 1999-2000) 5 27.8.96 AND BY HONBLE MADRAS HIGH COURT BY ORDER D ATED 9.7.96, WHIRLPOOL WASHING MACHINES LTD. (WWML) GOT MERGED WITH THE ASSESSEE C OMPANY. IT WAS SUBMITTED THAT PRIOR TO THE AMALGAMATION, WWML WERE MAINTAINING A COLLECTION ACCOUNT WITH CORPORATION BANK, MADRAS AND THE PAYMENTS RECEIVED FROM PARTIES WERE DEPOSITED IN THIS ACCOUNT. BANK HAS BEEN CREDITING PROCEEDS NET OF C OLLECTION CHARGES, BUT THE ERSTWHILE WWML WAS NOT ACCOUNTING FOR THE COLLECTION CHARGES RECOVERED BY THE BANK. IT WAS ALSO SUBMITTED THAT THE BANK ACCOUNT WAS NOT RECONCILED AT THE TIME OF MERGER, BUT AFTER THE MERGER, RECONCILIATION WAS DONE IN DECEMBER, 96 AND IT WAS FOUND THAT THE BANK HAS CREDITED THE PROCEEDS NET OF COLLECTION CHARGES AMO UNTING TO RS.27,19,371. IT WAS ALSO EXPLAINED THAT THIS INCLUDED AN AMOUNT OF RS.23,82, 128 FOR THE PERIOD FROM MARCH, 95 TO MARCH, 96 AND THE BALANCE AMOUNT OF RS.3,37,242 WER E THE CHARGES FOR THE PERIOD APRIL, 96 TO DECEMBER, 96. THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS DECIDED THIS ISSUE TO THE EXTENT OF THIS AMOUNT OF RS.27,19,371 IN FAV OUR OF THE ASSESSEE ON THE BASIS THAT EVEN IF THE EXPENDITURE DOES NOT RELATE TO THE YEAR UNDER CONSIDERATION, BUT IF THE LIABILITY HAS BEEN QUANTIFIED IN THIS YEAR AND HAS CRYSTALLIZ ED/ACCRUED IN THIS YEAR, THE SAME WOULD BE ALLOWABLE AS A DEDUCTION. IT IS HELD BY THE COM MISSIONER OF INCOME-TAX (APPEALS) THAT THIS LIABILITY HAS CRYSTALLIZED DURING THIS YEAR AN D HENCE ALLOWABLE. NOW, THE REVENUE IS IN APPEAL BEFORE US. 13. LD.DR OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS IT IS SUBMITTED BY THE LD.AR OF THE ASSESSEE THAT THE LIABILITY ON ACC OUNT OF BANK CHARGES HAS CRYSTALLIZED ONLY AFTER THE SANCTION OF MERGER BY THE HIGH COURT S AND THE SUBSEQUENT RECONCILIATION OF THE ACCOUNT WITH THE BANK. RELIANCE HAS BEEN PLACE D ON THE JUDGMENT OF THE HONBLE DELHI HIGH RENDERED IN THE CASE OF SHRIRAM PISTONS & RINGS LTD., REPORTED IN 220 CTR 404. 14. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BEL OW AND THE JUDGMENT CITED BY THE LD.AR OF THE ASSESSEE. WE FIND THAT IT HAS BEEN PO INTED OUT BY THE COMMISSIONER OF INCOME-TAX (APPEALS) THAT OUT OF THIS AMOUNT OF RS. 27,19,371, AN AMOUNT OF RS.3,37,242 IS RELATING TO THIS YEAR ONLY AND NOT TO ANY PRIOR PERIOD. LD.DR OF THE REVENUE COULD NOT CONTROVERT THIS FINDING OF THE COMMISSIONER OF INCO ME-TAX (APPEALS) AND HENCE TO THIS ITA NOS.2084 & 3087/DEL./2007 (A.YS. 1997-98 & 1999-2000) 6 EXTENT, NO DISALLOWANCE CAN BE MADE ON THE BASIS TH AT THE EXPENDITURE IS RELATED TO PRIOR PERIOD. RELATING TO THE BALANCE AMOUNT OF RS.23,82 ,128, WE FIND THAT RELIEF HAS BEEN ALLOWED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON THE BASIS THAT THE EXPENSES HAS CRYSTALLIZED DURING THIS YEAR. LD.AR OF THE ASSESS EE SUBMITTED BEFORE US, THE COPY OF ORDER DATED 27.8.96 OF THE JUDGMENT OF THE HON'BLE DELHI HIGH COURT AND HONBLE MADRAS HIGH COURT SANCTIONING THE CLAIM OF AMALGAMA TION OF WWML WITH THE ASSESSEE COMPANY AND COPY OF THE JUDGMENT IS AVAILABLE ON PA PER BOOK PAGES 106-112. IT IS THE CLAIM OF THE ASSESSEE THAT THIS AMOUNT WAS LYING IN THE BANK ACCOUNT OF WWML AND COLLECTION CHARGES WERE DEDUCTED BY CORPORATION BAN K, MADRAS, BUT NOT ACCOUNTED FOR BY ERSTWHILE WWML. BOTH THESE ORDERS OF THE HON'BLE DELHI HIGH COURT AND MADRAS HIGH COURT WERE PASSED DURING THIS YEAR AND ALTHOUGH THE AMALGAMATION WAS MADE EFFECTIVE FROM 1.4.1996, BUT THE EFFECT WAS GIVEN ONLY AFTER PASSING OF AMALGAMATION ORDER BY HIGH COURTS. CORPORATION BANK, MADRAS HAD CHARGED COMMI SSION WHICH WERE NOT ACCOUNTED FOR BY ERSTWHILE WWML. WE ARE IN AGREEMENT WITH TH E LD.AR OF THE ASSESSEE THAT THE SAME HAS CRYSTALLIZED IN THE PRESENT YEAR WHEN THE BANK ACCOUNTS WERE RECONCILED AFTER PASSING OF THE ORDERS OF AMALGAMATION BY THE HON'B LE DELHI HIGH COURT AND HONBLE MADRAS HIGH COURT. IN THE LIGHT OF THIS FACTUAL PO SITION, NOW WE EXAMINE THE JUDGMENT OF THE HON'BLE DELHI HIGH COURT RENDERED IN THE CASE O F SHRIRAM PISTONS & RINGS LTD. (SUPRA). IT IS OBSERVED BY THE HON'BLE DELHI HIGH COURT THAT THERE IS NO DOUBT THAT THE ASSESSEE HAS INCURRED AN EXPENDITURE AND THE ONLY D ISPUTE IS RELATING TO THE DATE ON WHICH THE LIABILITY HAS CRYSTALLIZED. IT IS ALSO OBSERVE D THAT THERE WAS NO CHANGE IN THE RATE OF TAX FOR THE ASSESSMENT YEAR 1983-84. WE FEEL THAT PARA .18 OF THE JUDGMENT OF THE HON'BLE HIGH COURT IS RELEVANT AND HENCE THE SAME IS REPRO DUCED BELOW:- IN THE REFERENCE THAT IS BEFORE US THERE IS NO DOU BT THAT THE ASSESSEE HAD INCURRED AN EXPENDITURE. THE ONLY DISPUTE IS REGARDING THE DATE ON WHICH THE LIABILITY HAD CRYSTALLIZED. IT APPEARS THAT THERE WAS NO CHANGE IN THE RATE OF TAX FOR THE ASSESSMENT YEAR 1983-84 WITH WHICH WE ARE CONCERNED . THE QUESTION, THEREFORE, IS ONLY WITH REGARD TO THE YEAR OF DEDUCTION AND IT IS A PITY THAT ALL OF US HAVE TO EXPEND SO MUCH TIME AND ENERGY ONLY TO DETERMINE TH E YEAR OF TAXABILITY OF THE AMOUNT. 15. IN THE PRESENT CASE ALSO, WE FIND THAT THERE IS NO CHANGE IN THE RATE OF TAX. IT HAS BEEN BROUGHT TO OUR NOTICE THAT THE ENTIRE LOSS OF RS.65.05 CRORES ASSESSED BY THE ITA NOS.2084 & 3087/DEL./2007 (A.YS. 1997-98 & 1999-2000) 7 ASSESSING OFFICER HAS LAPSED BECAUSE NO PART OF THE SAME COULD BE SET OFF UP TO ASSESSMENT YEAR 2006-07 TILL THE END OF 8 ASSESSMEN T YEARS FROM THE END OF THIS ASSESSMENT YEAR. IN VIEW OF THIS FACTUAL POSITION AND BY RESPECTFULLY FOLLOWING THE JUDGMENT OF THE HON'BLE DELHI HIGH COURT CITED BEF ORE US, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF THE COMMISSIONER OF INCOME-TAX (A PPEALS) AS PER WHICH THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS DELETED TH E DISALLOWANCE ON ACCOUNT OF PRIOR PERIOD EXPENSES ON THE BASIS THAT BANK CHARGES OF R S.23,82,128 OUT OF RS.27,19371 HAS CRYSTALLIZED DURING THIS YEAR. WE, THEREFORE, UPHOL D THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) ON THIS ISSUE AND THIS GROUND OF THE REVENUE IS ALSO REJECTED. ASSESSMENT YEAR 1999-2000 16. NOW, WE TAKE UP THE APPEAL FOR ASSESSMENT YEAR 1999-2000. GROUND NO.1 OF THE APPEAL READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN DISALLOWING THE DEPRECIATION OF RS,.93,25,62,056 AL LOWED BY THE ASSESSING OFFICER. 17. IT WAS AGREED BY BOTH THE SIDES THAT THIS ISSUE IS IDENTICAL TO GROUND NO.1 IN ASSESSMENT YEAR 1997-98 AND THE SAME CAN BE DECIDED ON SIMILAR LINES. IN THAT YEAR, THIS ISSUE HAS BEEN DECIDED BY US IN FAVOUR OF THE ASSES SEE AS PER THE PARA.6 ABOVE. ON THE SAME LINES, IN THIS YEAR ALSO, THIS ISSUE IS DECIDE D IN FAVOUR OF THE ASSESSEE AND THIS GROUND OF THE REVENUE IS REJECTED. 18. GROUND NO.2 OF THIS APPEAL READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN ALLOWING DELAYED PAYMENTS OF RS.2,56,592 AND RS.62, 449 MADE TOWARDS PF & ESI. 19. LD.DR OF THE REVENUE SUPPORTED THE ASSESSMENT O RDER WHEREAS IT IS SUBMITTED BY LD.AR OF THE ASSESSEE THAT THIS ISSUE IS NOW COVER ED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF THE HON'BLE DELHI HIGH COURT RENDERED I N THE CASE OF CIT VS. DHARMENDER SHARMA AS REPORTED IN 297 ITR 320. RELIANCE WAS PL ACED ON ANOTHER JUDGMENT OF THE HON'BLE DELHI HIGH COURT RENDERED IN THE CASE OF P. M. ELECTRONICS AS REPORTED IN 313 ITR 161. ITA NOS.2084 & 3087/DEL./2007 (A.YS. 1997-98 & 1999-2000) 8 20. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL PLACED ON RECORD AND GONE THROUGH THE JUDGMENTS CITED BEFORE US. WE FIND THAT IN THE CASE OF CIT VS. DHARMENDER SHARMA, REPORTED SUPRA, THE ISSUE IN VOLVED WAS RELATING TO DELAYED PAYMENT OF PF & ESI AND THE THE HON'BLE DELHI HIGH COURT HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE ON THE BASIS THAT THE ASSESS EE WAS ENTITLED TO CLAIM THE BENEFIT PROVIDED U/S 43B OF THE I.T. ACT IN VIEW OF THE FAC T THAT HE HAD CONTRIBUTED TO PF BEFORE FILING THE RETURN OF INCOME. IN THE CASE OF PM ELE CTRONICS LTD. (SUPRA) ALSO, THE HON'BLE DELHI HIGH COURT WAS CONCERNED WITH SIMILAR ISSUE A ND THE SAME WAS DECIDED IN FAVOUR OF THE ASSESSEE. LD. DR OF THE REVENUE COULD NOT S HOW AS TO HOW THESE JUDGMENTS OF THE HON'BLE DELHI HIGH COURT ARE NOT APPLICABLE IN THE PRESENT CASE. HENCE, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF THE COMMISSIO NER OF INCOME-TAX (APPEALS) ON THIS ISSUE. WE, THEREFORE, CONFIRM THE SAME. THIS GROUN D OF THE REVENUE IS ALSO REJECTED. 21. GROUND NO.3 OF THIS APPEAL READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN ALLOWING EXPENSES PERTAINING TO PRIOR PERIOD AMOUNT ING TO RS.3,10,36,379. IT WAS AGREED TO BY BOTH THE SIDES THAT THIS ISSUE IS SIMILAR TO THE ISSUE RAISED IN ASSESSMENT YEAR 1997-98 AS PER THE GROUND NO.3 AND THE SAME CAN BE DECIDED ON SIMILAR LINES. 22. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. W E FIND THAT IN THIS YEAR ALSO, THE CLAIM OF THE ASSESSEE WAS ALLOWED BY THE COMMISSIONER OF INCOME-TAX (APPEALS). THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS GIVEN A FI NDING THAT OUT OF EXPENSES OF RS.356.23 LAKH, EXPENSES TO THE EXTENT OF RS.310.36 LAKH HAS CRYSTALLIZED DURING THIS YEAR. LD.DR OF THE REVENUE HAS DISPUTED THIS FINDING OF T HE COMMISSIONER OF INCOME-TAX (APPEALS), BUT IN VIEW OF THIS FACT THAT THE ASSES SEE HAS INCURRED LOSSES IN THE PRESENT YEAR AS WELL AS IN THE PRECEDING TWO YEARS I.E. ASSESSME NT YEARS 1997-98 & 98-99 AND LOSSES OF THIS YEAR HAVE ULTIMATELY LAPSED EXCEPT THE LOSS TO THE EXTENT OF RS.1303.80 LAKH FOR THE CURRENT YEAR, WE FIND THAT EVEN IF DEDUCTION ON ACC OUNT OF THESE EXPENSES OF PRIOR PERIOD ARE NOT ALLOWED IN THE PRESENT YEAR, THE SAME HAS T O BE ALLOWED IN THE PRECEDING YEAR TO ITA NOS.2084 & 3087/DEL./2007 (A.YS. 1997-98 & 1999-2000) 9 WHICH THE EXPENSES ARE RELATED TO AND THE RESULT WI LL BE SAME BECAUSE THE LOSS OF THAT YEAR WILL GO UP WHICH WILL ALSO LAPSE. CONSIDERING THES E FACTS AND THE JUDGMENT OF THE HON'BLE DELHI HIGH COURT, RENDERED IN THE CASE OF SHRIRAM PISTONS & RINGS LTD. (SUPRA), RELEVANT PORTION OF WHICH HAS BEEN REPRODUCED BY US WHILE DECIDING GROUND NO.3 IN ASSESSMENT YEAR 1997-98, WE FIND NO REASON TO INTER FERE WITH THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) ON THIS ISSUE. WE THEREFORE, CONFIRM THE SAME. THIS GROUND IS ALSO REJECTED. 23. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. 24. ORDER PRONOUNCED IN OPEN COURT ON 21.08.2009. (I.P. BANSAL) (A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: AUG. 21, 2009. *SKB* COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A)-IX, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. AR/ITAT