DCIT, Coimbatore V. M/s. Lotus Clean Power Venture Pvt. Ltd., Coimbatore

ITA 3178/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7685 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 17-11-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: T RAGHUNATHAN
• Keywords: Depreciation

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI [CAMP @ COIMBATORE ] . . . , . , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ./ ITA NO. 3178/MDS/2016 / ASSESSMENT YEAR : 2012-13 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 1, COIMBATORE. V. M/S. LOTUS CLEAN POWER VENTURE PVT. LTD., NO.484, KAMARAJ ROAD, UPPILIPALAYAM, COIMBATORE 641 015. PAN : AACCL0985E ( ! /APPELLANT) ( '# ! /RESPONDENT) ! $ /APPELLANT BY : SHRI PATHLAVETH PEERYA, CIT '# ! $ /RESPONDENT BY : SHRI T. RAGHUNATHAN, CA $ /DATE OF HEARING : 19.01.2017 $ /DATE OF PRONOUNCEMENT : 28.02.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-1, COIMBATORE D ATED 22.08.2016 AND PERTAINS TO THE ASSESSMENT YEAR 2012 -13. THE ONLY ISSUE ARISES FOR CONSIDERATION IS DEPRECIATION CLAI MED BY THE ASSESSEE ON THE WINDMILL. 2 I.T.A. NO. 3178/MDS/2016 2. SHRI PATHLAVETH PEERYA, THE LD. DEPARTMENTAL REP RESENTATIVE SUBMITTED THAT BY VIRTUE OF SLUMP SALE DEED DATED 2 3.06.2012, THE ASSESSEE PURCHASED WINDMILL. AS PER THIS SLUMP SAL E AGREEMENT, THE PHYSICAL POSSESSION OF THE WINDMILL HAS TO BE HANDE D OVER TO THE ASSESSEE COMPANY ON 26.03.2012, SUBJECT TO FULFILLM ENT OF THE LUMPSUM PAYMENT OF RS.90.08 CRORES TO THE ASSESSEE. THEREFORE THE TRANSFER OF WINDMILL IS SUBJECT TO PAYMENT OF ENTIR E CONSIDERATION OF RS.90.08 CRORES. ADMITTEDLY ACCORDING TO THE LD. C OUNSEL, THE PAYMENT WAS NOT MADE ON 26.03.2012. THEREFORE, THER E WAS NO TRANSFER OF WINDMILL. REFERRING TO THE ORDER OF T HE CIT (APPEALS), THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE CIT (APPEALS) HAS NOT CONSIDERED ANYTHING ABOUT THE TRANSFER OF WINDM ILL. THE CIT (APPEALS) SIMPLY OBSERVED THAT MAJOR PORTION OF THE AMOUNT WAS DEBITED BEFORE 31.03.2012. THEREFORE, IT IS OBVIOU S THAT THE FULL CONSIDERATION WAS NOT PAID ON 26.03.2012. HENCE, A S PER THE AGREEMENT THE ASSESSEE CANNOT BECOME THE OWNER OF T HE WINDMILL. THEREFORE THE CIT (APPEALS) IS NOT JUSTIFIED IN ALLOW ING THE CLAIM OF THE ASSESSEE. 3. ON THE CONTRARY, SHRI T. RAGHUNATHAN THE LD. REPR ESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE SUBSTANTIAL PAYMENT FOR PURCHASE OF THE WINDMILL WAS PAID BEFORE 31.03.2016. THEREFORE, THE ASSESSEE 3 I.T.A. NO. 3178/MDS/2016 BECOMES THE BENEFICIAL OWNER OF THE WINDMILL, EVEN THOUGH IT WAS NOT REGISTERED BY TNEB. WHEREAS THE ASSESSEE BECOMES TH E BENEFICIAL OWNER AND GENERATES THE ELECTRICITY, ACCORDING TO T HE LD.REPRESENTATIVE THE ASSESSEE IS ENTITLED FOR DEPRECIATION IN VIEW O F THE JUDGMENT OF THE SUPREME COURT IN MYSORE MINERALS LTD V CIT(1999) 106 TAXMAN 166 (SC). THEREFORE, THE CIT (APPEALS) HAS RIGHTLY ALL OWED THE CLAIM OF THE ASSESSEE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF BOTH THE AUTHORITIES BELOW AN D ALSO THE SLUMP SALE DEED DATED 26.03.2012. AS PER CLAUSE 3 OF THE SLUMP SALE DEED DATED 26.03.2012, THE PHYSICAL POSSESSION OF T HE WINDMILL SHALL BE HANDED OVER TO THE ASSESSEE ON 26.03.2012 SUBJECT TO FULL PAYMENT OF LUMPSUM CONSIDERATION OF RS.90.08 CRORES . NOW, THE ASSESSEE CLAIMS THAT SUBSTANTIAL PAYMENT WAS MADE A ND THE SAME WAS DEBITED IN THE BOOKS OF ACCOUNT ON 31.03.2012. WHEN THE AGREEMENT SAYS THAT THE ASSESSEE HAS TO PAY THE ENT IRE CONSIDERATION, IT IS NOT KNOWN WHETHER THE PHYSICAL POSSESSION OF THE WINDMILL WAS DELIVERED TO THE ASSESSEE ON PAYME NT OF THE SO CALLED SUBSTANTIAL PORTION OF THE SALE CONSIDERATIO N. FOR THE 4 I.T.A. NO. 3178/MDS/2016 PURPOSE OF APPLYING THE JUDGMENT OF THE APEX COURT IN M/S. MYSORE MINERALS LTD, SUPRA, THE ASSESSEE HAS TO TAKE OVER THE PHYSICAL POSSESSION OF THE WINDMILL FOR THE PURPOSE OF CLAIM ING BENEFICIAL OWNERSHIP. OF COURSE REGISTRATION BY TNEB AND OTH ER REQUIREMENTS UNDER THE COMMON LAW FOR THE PURPOSE OF TRANSFER OF OWNERSHIP MAY NOT BE A PRECONDITION FOR THE PURPOSE OF CLAIMING D EPRECIATION UNDER THE INCOME TAX ACT. HOWEVER, THE ASSESSEE HAS TO E STABLISH THAT IT HAS TAKEN OVER THE PHYSICAL POSSESSION OF THE PROPE RTY AND ENJOYED THE SAME AS IT IS OWNED. THEREFORE, THE ASSESSEE H AS TO ESTABLISH BEFORE THE AUTHORITIES BELOW THAT IT HAS TAKEN OVER THE PHYSICAL POSSESSION OF THE PROPERTY ON 26.03.2012. SINCE, T HIS FACT WAS NOT EXAMINED BY CIT (APPEALS), THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE REEXAMINED. AC CORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND T HE ENTIRE CLAIM OF DEPRECIATION IS REMITTED BACK TO THE FILE OF THE AS SESSING OFFICER. THE ASSESSING OFFICER SHALL CONSIDER THE MATTER AFR ESH IN THE LIGHT OF THE MATERIAL THAT MAY BE AVAILABLE ON RECORD AND TH EREAFTER BRING ON RECORD, THE ACTUAL DATE ON WHICH THE PHYSICAL DELIV ERY OF THE WINDMILL WAS TAKEN OVER BY THE ASSESSEE AND THEREAFTER DECID E THE ISSUE AFRESH IN ACCORDANCE WITH LAW, AFTER GIVING REASONA BLE OPPORTUNITY TO THE ASSESSEE. 5 I.T.A. NO. 3178/MDS/2016 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED ON 28 TH FEBRUARY, 2017 AT CHENNAI. SD/- SD/- ( . ) ( . . . ) (ABRAHAM P. GEORGE) (N.R.S. GAN ESAN) / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, /DATED, THE 28 TH FEBRUARY, 2017. JR. $ ' % & % /COPY TO: 1. ! /APPELLANT 2. '# ! /RESPONDENT 3. '() ( )/CIT(A)-1, COIMBATORE 4. '() /CIT 5. ' % /DR 6. *+ /GF.