ACIT, UDAIPUR V. M/s. K.K. Enterprises, UDAIPUR

ITA 316/JODH/2012

• Counselvise Citation: 31623314 RSA 2012
• Duration Of Justice: 1 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 18-11-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 21-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Assessee Lawyers: G K GARGIEYA
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 316/JODH/2012 (A.Y. 2009-10) ACIT, VS. M/S. K.K. ENTERPRISES, CIRCLE-2, SHREE NIKETAN, 380, UDAIPUR. ASHOK NAGAR, UDAIPUR. PAN NO. AADFK 9054 B (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.K. GARGIEYA & SHRI SARVESH BALDI DEPARTMENT BY : SHRI N.A. JOSHI- D.R. DATE OF HEARING : 18/11/2013. DATE OF PRONOUNCEMENT : 25 /11/2013. O R D E R PER N.K.SAINI, A.M THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE OR DER DATED 07/06/2012 OF LD. CIT (A), UDAIPUR. 2. FIRST ISSUE IN THIS APPEAL RELATES TO THE DISALLOW ANCE OF DEPRECIATION OF RS. 26,41,055/- CLAIMED ON DUMPERS. 2 3. REGARDING THIS ISSUE, LEARNED COUNSEL FOR THE ASS ESSEE AT THE VERY OUTSET STATED THAT IT IS COVERED VIDE ORDER DATED 2 0/11/2013 IN I.T.A.NO. 217/JU/2012 FOR THE A.Y. 2008-09. COPY OF THE SAID ORDER WAS FURNISHED. LEARNED D.R. ALTHOUGH SUPPORTED THE ORDER OF THE AS SESSING OFFICER, BUT COULD NOT CONTROVERT THE AFORESAID CONTENTION OF TH E LEARNED COUNSEL FOR THE ASSESSEE. 4. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PAR TIES AND MATERIAL ON RECORDS, IT IS NOTICED THAT AN IDENTICAL ISSUE H AVING SIMILAR FACTS HAS ALREADY BEEN ADJUDICATED IN ASSESSEES OWN CASE IN I.T.A.NO. 217/JU/2012 VIDE ORDER DATED 20/11/2013, WHEREIN RE LEVANT FINDING HAS BEEN GIVEN IN PARA 8, WHICH READS AS UNDER:- 8 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PART IES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IT IS NOTICED THAT AN IDENTICAL ISSUE HAS ALREADY BEEN DECIDED IN FAVOUR OF THE ASSESSEE VIDE AFORESAID REFERRED TO ORDER DATED 23/ 10/2013, WHEREIN EARLIER DECISION DATED 10/07/2013 IN I.T.A.NO. 135/ JODH/2013 FOR THE A.Y. 2007-08 IN THE CASE OF ITO, WARD-1(4), UDAIPUR VS. M/S. KESHRIYAJI MINERALS PVT. LTD. HAS BEEN FOLLOWED AND THE RELEVA NT FINDINGS HAVE BEEN GIVEN IN PARA 6 OF THE SAID ORDER, WHICH READS AS UNDER:- 6. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE O N RECORD. IT IS NOTICED THAT THE PRESENT ISSUE IS SQUARELY COVERED VIDE ORDER DATED 10/07/2013 PASSED BY THIS BENCH OF THE I.T.A.T. IN THE CASE OF ITO, UDAIPUR VS. M/S. KESHRIYAJI MINERALS PVT. LTD. UDAI PUR (SUPRA), WHEREIN THE RELEVANT OBSERVATIONS ARE GIVEN IN PARA 7 TO 10, WHICH ARE REPRODUCED VERBATIM AS UNDER:- 3 7. THE NEXT ISSUE, VIDE GROUND NO. 2, RELATES TO T HE DELETION OF DISALLOWANCE OF RS.1,41,298/- ON ACCOUNT OF EXCESS DEPRECIATION ON DUMPERS. 8. THE FACTS RELATED TO THIS ISSUE, IN BRIEF, ARE THAT THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED THAT THE ASSESSEE HAD CLAIMED DEPRECIATION OF RS.2,82,597/- @30% ON THE DUMPERS W HILE THE ALLOWABLE RATE OF DEPRECIATION WAS ONLY 15%. WH EN ASKED TO JUSTIFY THE SAME, THE ASSESSEE SUBMITTED A S UNDER: '1. THE DEPRECIATION OF DUMPER IS CLAIMED @30% CONSIDERING THEIR MOTOR LORRIES USED IN A BUSINESS OF RUNNING THEM ON HIRE. THE DUMPERS ARE USED TO TRANS PORT THE MATERIAL ONLY AND ALSO IT SATISFIED THE DEFINIT ION OF MOTOR VEHICLE ACT. THE DUMPERS ARE ALSO REGISTERED UNDER THE MOTOR VEHICLE ACT, THE PHOTOCOPIES OF REGISTRAT ION CERTIFICATES ARE ALREADY SUBMITTED.' 8.1 HOWEVER, THE ASSESSING OFFICER DID NOT FIND ME RIT IN THE SUBMISSIONS OF THE ASSESSEE BY OBSERVING THAT TIPPE RS WERE NON-TRANSPORT VEHICLES ALTHOUGH REGISTERED UNDER MO TOR VEHICLE ACT. HE FURTHER OBSERVED THAT THE DEPRECIAT ION @30% WAS AVAILABLE TO THE VEHICLES WHICH ARE IN THE NATURE OF LORRY HAVING CAPACITY AND CAPABILITY FOR CARRYIN G ON GOODS OR OTHER ITEMS. HE FURTHER STATED THAT THE DUMPER C OMES WITHIN THE EXPRESSION OF EARTH MOVING MACHINERY. TH E RELIANCE WAS PLACED ON THE DECISION OF HON'BLE GUWA HATI HIGH COURT IN THE CASE OF CIT VS. SIBSON CONSTRUCTI ON COMPANY 221 ITR 468 (GAUHATI). THE ASSESSING OFFICE R ALSO OBSERVED THAT THE ASSESSEE WAS NOT IN THE BUSINESS OF RUNNING THE MOTOR BUSES/MOTOR LORRIES ON HIRE AND T HE HIRING BUSINESS OF THE ASSESSEE WAS WITH REGARD TO THE PLANT & MACHINERY PERTAINING TO THE MARBLE BUSINESS RATHE R THAN THE BUSINESS OF RUNNING MOTOR BUSES/MOTOR LORRIES O N HIRE ON WHICH 30% DEPRECIATION WAS ALLOWED. THE ASSESSIN G OFFICER HELD THAT THE ASSESSEE WAS ENTITLED FOR DEP RECIATION @15% AND THE RELIANCE WAS PLACED ON THE FOLLOWING C ASE 4 LAWS: (I) CIT VS. SARDAR STONES 215 ITR 350 (RAJ) (II) CIT VS. AR ENTERPRISES P. LTD. IN DBIT NO. 7 7/2002 DATED 06/09/2007 9. THE ASSESSEE CARRIED THE MATTER TO THE LEARNED CIT(A) AND SUBMITTED AS UNDER: OUR HUMBLE SUBMISSION ON THE SECOND POINT OF THE APPEAL IS THAT THE APPELLANT IS ALSO HAVING BUSINESS OF HI RING OF MINING MACHINERIES AND EQUIPMENTS. THE DUMPERS ALSO USED FOR TRANSPORT VEHICLE ACT. HENCE THE DEPRECIAT ION CLAIMED MAY BE ALLOWED. 9.1 THE LEARNED CIT(A), AFTER CONSIDERING THE SUBM ISSIONS OF THE ASSESSEE, OBSERVED THAT THE ISSUE OF ALLOWABILITY O F DEPRECIATION ON DUMPER/ TIPPER AT THE RATE ON WHICH DEPRECIATION WAS ALLOWABLE ON TRANSPORT VEHICLE HAD BEEN EXAMINED BY THE JURISDICTIONAL TRIBUNAL IN THE CASE OF SAYEED IQBAL IN ITA NO.39/JU/2009 FOR THE ASSESSMEN T YEAR 2005-06. THE LEARNED CIT(A), BY FOLLOWING THE DECIS ION OF THE ITAT JODHPUR BENCH, ALLOWED THE CLAIM OF THE AS SESSEE AND HELD THAT THE ASSESSEE WAS ELIGIBLE FOR CLAIMIN G DEPRECIATION AT THE SAME RATE AT WHICH DEPRECIATION WAS ALLOWABLE ON MOTOR LORRIES. NOW THE DEPARTMENT IS I N APPEAL. 10. WE HAVE CONSIDERED THE SUBMISSIONS OF LEARNED D.R. AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE IT APPEARS THAT LEARNED CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE BY FOLLOWING THE DECISION OF THE JURISDICTIONAL TRIBUNAL AND NOTHING IS BROUGHT ON R ECORD THAT THE DECISION OF THE ITAT JODHPUR BENCH RELIED BY TH E LEARNED CIT(A), HAVING SIMILAR FACTS, HAD BEEN REVERSED BY THE HIGHER FORUM. WE, THEREFORE, DO NOT SEE ANY MERIT IN THIS GROUND OF THE DEPARTMENTAL APPEAL. 5. SO, BY RESPECTFULLY FOLLOWING THE AFORESAID REFERR ED TO ORDER, WE DO NOT SEE ANY MERIT IN THIS GROUND OF THE DEPARTMENTA L APPEAL. 5 6. VIDE GROUND NO.2 IN THIS APPEAL RELATES TO THE DEL ETION OF DISALLOWANCE OF DEPRECIATION OF RS. 17,771/- CLAIME D ON TANKERS. 7 . REGARDING THIS ISSUE, LEARNED COUNSEL FOR THE ASS ESSEE SUBMITTED THAT IT IS ALSO COVERED IN ASSESSEES FAVOUR VIDE A FORESAID REFERRED TO ORDER DATED 20/11/2013. LEARNED D.R. WAS FAIR ENOU GH TO CONCEDE THAT THIS ISSUE IS COVERED VIDE AFORESAID REFERRED TO OR DER. 8. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTI ES, IT IS NOTICED THAT AN IDENTICAL ISSUE HAS BEEN DECIDED IN ASSESSE ES FAVOUR VIDE AFORESAID REFERRED TO ORDER DATED 20/11/2013 IN I.T .A.NO. 217/JU/2012, WHEREIN THE RELEVANT FINDING HAS BEEN GIVEN IN PARA 14, WHICH READS AS UNDER:- 14. LEARNED CIT D.R. ALTHOUGH SUPPORTED THE ORDER OF THE ASSESSING OFFICER, BUT COULD NOT CONTROVERT THE FINDINGS GIVE N BY THE LEARNED CIT(A) THAT THE DISALLOWANCE WAS MADE BY THE ASSESS ING OFFICER ON THE BASIS OF DISALLOWANCE IN THE A.Y. 2004-05, WHICH WA S DELETED BY DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE. THER EFORE, THE DISALLOWANCE MADE DURING THE YEAR WAS LIABLE TO BE DELETED. WE, THEREFORE, DO NOT SEE ANY MERIT IN THIS GROUND OF T HE DEPARTMENTAL APPEAL. 9. SO, BY RESPECTFULLY FOLLOWING THE EARLIER ORDER OF THIS BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE, WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT(A) ON THIS ISSUE. 6 10. THE OTHER ISSUES VIDE GROUNDS NO. 3 & 4 RELATES TO THE DISALLOWANCE OF DEPRECIATION OF RS. 36,338/- AND RS. 3,00,000/- CLAIMED BY THE ASSESSEE ON WIND MILL AND ON COMMON POWER EVACUATIO N RESPECTIVELY. 11. AS REGARD TO THESE ISSUES, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT IS COVERED VIDE ORDER DATED 20/11 /2013 IN ASSESSEES OWN CASE IN I.T.A.NO. 217/JU/2012 FOR THE A.Y. 2008 -09. THE SAID CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE WAS NOT CONTROVERTED BY THE LEARNED D.R. 12. IT IS NOTICED THAT AN IDENTICAL ISSUE HAVING SIMILA R FACTS HAS ALREADY BEEN ADJUDICATED BY THIS BENCH OF THE TRIBUNAL IN A SSESSEES OWN CASE VIDE ORDER DATED 20/11/2013 IN I.T.A.NO. 217/JU/201 2 AND THE RELEVANT FINDING HAS BEEN GIVEN IN PARA 19 OF THE SAID ORDER , WHICH READS AS UNDER:- 19. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTI ES AND THE MATERIAL AVAILABLE ON THE RECORD, IT IS NOTICED THA T AN IDENTICAL ISSUE HAVING SIMILAR FACTS HAS ALREADY BEEN ADJUDICATED B Y THIS BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE A.Y. 20 07-08 IN I.T.A.NO. 438/JU/2010 VIDE ORDER DATED 20/09/2012, WHEREIN TH E RELEVANT FINDINGS HAVE BEEN GIVEN IN PARA 24, WHICH READS AS UNDER:- 24. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES AND MATERIAL AVAILABLE ON RECORD, WE ARE OF THE OPINION THAT THE LD CIT(A) HAS PASSED A JUST ORDER WHICH IS IN CONSONANCE WIT H THE EARLIER ORDER OF THIS BENCH OF THE TRIBUNAL IN THE CASE OF DCIT, BHILWARA VS M/S SARVODAYA SUITINGS PVT LTD, BHILWARA (SUPRA). IN TH E INSTANT CASE, IT IS 7 NOT IN DISPUTE THAT THE ASSESSEE INSTALLED A WINDMI LL. FOR INSTALLING A WINDMILL, CIVIL WORK & FOUNDATION WAS DONE BY INCUR RING AN EXPENDITURE OF RS. 34,60,760/-, WITHOUT DOING THE C IVIL CONSTRUCTION WORK INCLUDING FOUNDATION WORK, IT WAS NOT POSSIBLE TO INSTALL THE WINDMILL. SIMILARLY, THE ELECTRIC ITEMS, COMPONENT AND INSTALLATION WERE NECESSARY FOR THE WINDMILL, BECAUSE IN THE ABS ENCE OF THESE COMPONENTS AND ELECTRIC ITEMS IT WAS NOT POSSIBLE F OR THE WINDMILL TO PRODUCE ELECTRICITY. THEREFORE, IT WAS ALSO AN INT EGRAL PART OF THE WINDMILL. IN THE INSTANT CASE, THE ASSESSEE PAID A SUM OF RS. 31,25,000/- TO M/S SUZLON ENERGY LTD THROUGH WHOM T HE WINDMILL WAS INSTALLED. THE SAID PAYMENT WAS NON-REFUNDABLE. THE SAID EXPENDITURE WAS MADE FOR THE INSTALLATION OF THE WI NDMILL AND IF THERE WAS NO SUCH WINDMILL INSTALLATION, THE ASSESS EE COULD NOT HAVE INCURRED SUCH EXPENSES, THEREFORE, EXPENDITURE INC URRED ON COMMON POWER EVACUATION WAS DIRECTLY RELATED TO THE WINDMI LL AND THE ASSESSEE WAS ENTITLED FOR HIGHER DEPRECIATION. WE, THEREFORE, CONSIDERING THE TOTALITY OF FACTS DO NOT SEE ANY IN FIRMITY IN THE ORDER OF LD CIT(A) ON THIS ISSUE. 13. CONSIDERING THE SIMILARITY IN THE FACTS FOR THE YEA R UNDER CONSIDERATION VIS--VIS A.Y. 2007-08, WE DO NOT SEE ANY VALID GROUND TO INTERFERE WITH THE FINDINGS OF THE LEARNED CIT(A). 14. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMISSE D. (ORDER PRONOUNCED IN THE COURT ON 25 TH NOVEMBER, 2013). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 25 TH NOVEMBER , 2013. VR/- 8 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JODHPUR.