Rajmal Lakhichand Jewellers P Ltd, Jalgaon V. DCIT Cir 2, Jalgaon

ITA 319/PUN/2012

• Counselvise Citation: 31924514 RSA 2012
• Duration Of Justice: 1 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 16-02-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANN KAPTHUAMA
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 319/PN/2012 (ASSTT.YEAR : 2008-09) RAJMAL LAKHICHAND JEWELLERS PVT. LTD., 169, BALAJI PETH, JOHARI BAZAR, JALGAON .. APPELLANT PAN NO. AAECS 0061L VS. DCIT CIRCLE-2, JALGAON .. RESPONDENT ITA NO. 320/PN/2012 (ASSTT.YEAR : 2008-09) M/S.RAJMAL LAKHICHAND 169, BALAJI PETH, JOHARI BAZAR, JALGAON-425001 .. APPELLANT PAN NO. AACFR 8609L VS. DCIT CIRCLE-2, JALGAON .. RESPONDENT ITA NO. 321/PN/2012 (ASSTT.YEAR : 2008-09) MANRAJ JEWELLERS PVT. LTD., 169, BALAJI PETH, JOHARI BAZAR, JALGAON-425001 .. APPELLANT PAN NO. AADCM 3254E VS. DCIT CIRCLE-2, JALGAON .. RESPONDENT ITA NO. 322/PN/2012 (ASSTT.YEAR : 2008-09) R.L. GOLD PVT. LTD., 169, BALAJI PETH, JOHARI BAZAR, JALGAON-425001 .. APPELLANT PAN NO. AABCG 5201D VS. DCIT CIRCLE-2, JALGAON .. RESPONDENT 2 ASSESSEE BY : SRI NIKHIL PATHAK REVENUE BY : MS. ANN KAPTHUAMA DATE OF HEARING : 14-05-2013 DATE OF PRONOUNCEMENT : 29-05-2013 ORDER PER SHAILENDRA KUMAR YADAV, JM : ALL THE 4 APPEALS PERTAIN TO THE SAME GROUP ON SIMI LAR ISSUE, SO THEY ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. IN ITA NO.319/PN/2012 THE ASSESSEE HAS RAISED TH E FOLLOWING GROUNDS : THE GROUNDS OF APPEAL STATED BELOW ARE WITHOUT PREJUDICE TO EACH OTHER. 1. THE LEARNED CIT (A) ERRED IN RESTRICTING THE CLA IM FOR DEPRECIATION TO RS.88,955 APPLYING THE RATE 10% ON THE COST OF ELECT. YARD FENCING OF RS.4,00,298 AND COST OF PREPARATION OF ROAD OF RS.4,89,254 (RS.8,89,552 IN THE AGGREGATE) INCURRED IN RELATION TO INSTALLATION OF WIND MILL AS AGAINST RS.7,11,642 CLAIMED BY THE APPELLANT APPLYING THE RATE OF 80%. 2. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE RE WAS NO CONSTRUCTION INVOLVING CIVIL WORK IN RELATIO N TO BUILDING OR ANY ASSET OF SIMILAR NATURE INDEPENDENT OF WINDMILL AND CONSEQUENTLY FURTHER ERRED IN APPLYING THE RATE APPLICABLE TO BUILDING TO THE COST OF ELEC T. YARD FENCING AND PREPARATION OF ROAD. 3. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE , THE APPELLANT'S CLAIM FOR DEPRECIATION OF RS.3,20,2 38 AND RS.3,91,403 (RS.7,11,641 IN THE AGGREGATE) IN RESPE CT OF ACTUAL COST OF ELECT. YARD FENCING OF RS.4,00,298 A ND 3 PREPARATION OF ROAD OF RS.4,89,254 (AGGREGATE COST RS.8,89,552) AS CLAIMED IN THE RETURN OF INCOME BE ALLOWED. 4. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR DELETE ANY ONE OR MORE OF THE GROUNDS OF APPEALS AS MAY BE REQUIRED IN THE NATURE AND CIRCUMSTANCES OF THE CASE. 5. THE APPELLANT PRAYS LEAVE TO ADDUCE SUCH FURTHER EVIDENCE TO SUBSTANTIATE ITS CASE AS THE OCCASION M AY DEMAND. 3. AT THE OUTSET OF HEARING THE LD. AUTHORISED REPRESENTATIVE POINTED OUT THAT ISSUE AT HAND IS C OVERED BY THE DECISION OF ITAT IN CASE OF DEVI CONSTRUCTION C OMPANY VS. ACIT VIDE ITA NO.1390 AND 1391PN/2010 AND OTHER S WHEREIN THE TRIBUNAL HAS DISCUSSED THE SIMILAR ISSU E AND HELD AS UNDER : 13. THE GROUND NO.3 READS AS UNDER : 3. ON THE FACTS & CIRCUMSTANCES PREVAILING IN THE CASE & AS PER PROVISIONS OF LAW, IT BEHELD THAT THE ASSESSING OFFICER HAS ERRED IN HOLDING PART OF THE EXPENDITURE INCURRED PERTAINING TO WINDMILLS AS RELATED TO CIVIL WORK ON WHICH DEPRECIATION IS ADMI TTED @10% AS AGAINST 80% CLAIMED BY THE APPELLANT. IT B E HELD THAT AS PER FACTS PREVAILING IN THE CASE, THE ENTIRE EXPENDITURE PERTAINING TO WINDMILL IS ELIGIBLE FOR DEPRECIATION @80% & NO PART OF SUCH EXPENDITURE CAN BE CONSIDERED AS RELATED TO CIVIL WORK. JUST & PRO PER RELIEF BE GRANTED TO THE APPELLANT IN THIS RESPECT . 14. THE BRIEFLY STATED FACTS PERTAINING TO THE GROU ND NO.3 ARE AS UNDER. THE ASSESSEE HAS CLAIMED DEPRECIATION AT THE RATE OF 80% ON THE WINDMILLS. THE 4 80% OF THE DEPRECIATION WAS ON THE TOTAL COST OF TH E WINDMILLS INCLUDING THE CIVIL WORK. THE ASSESSING OFFICER HAS OBSERVED THAT M/S. SUZLON INFRASTRUCTUR E HAS RAISED COMPOSITE BILLS OF RS.31,96,616/- FOR CI VIL WORK CONSISTING OF CONSTRUCTION OF ONE WINDMILL FOUNDATION AND TRANSFORMER PLINTH, ELECTRICAL YARD FENCING, ROAD FOR MOVEMENT OF CRANE AND PREPARATION OF CRANE PLATFORM. THE ASSESSING OFFICER HAS RESERVAT ION IN ALLOWING THE EXPENDITURE RELATED TO THE ELECTRIC AL YARD FENCING ROAD FOR MOVEMENT OF CRANE AND PREPARATION OF CRANE PLATFORM AS IN HIS OPINION, ON LY 10% DEPRECIATION CAN BE ALLOWED. HE ALLOWED THE DEPRECIATION ON THE WINDMILL FOUNDATION AND TRANSFORMER PLINTH TAKING THE SAME AS DIRECTLY RELA TED AND NECESSARY FOR THE WORKING OF THE WINDMILL. THE LD. COUNSEL RELIED ON THE DECISION OF THE ITAT, AHMEDAB AD IN THE CASE OF ACIT (OSD), AHMEDABAD VS. PARRY ENGINEERING AND ELECTRONICS P. LTD. ITA NO.3317/AHD/2011 DATED 02-03-2012. HE PRAYED FOR ALLOWING THE DEPRECIATION AT 80% ON THE ENTIRE CAPI TAL EXPENDITURE. WE HAVE ALSO HEARD THE LD. DR. 15. IN THE CASE OF PARRY ENGINEERING AND ELECTRONIC S P. LTD. (SUPRA), IT IS HELD THAT FOUNDATION, CIVIL AND ELECTRICAL WORK ARE NECESSARY FOR THE INSTALLATION OF THE WINDMILL AND IS CLEARLY PART AND PARCEL OF THE WIND MILL PROJECT ON WHICH DEPRECIATION AT THE RATE OF 80% IS ALLOWABLE. IN THE PRESENT CASE, THE ASSESSING OFFI CER HAS DISALLOWED ON ELECTRICAL YARD FENCING AND ROAD FOR MOVEMENT OF THE CRANE, BUT ALLOWED THE DEPRECIATION ON WINDMILL FOUNDATION AND TRANSFORMER PLINTH. IN OUR OPINION, ROAD CONSTRUCTED FOR MOVEMENT OF THE CRANE CANNOT BE SAID TO BE THE PART OF THE WINDMILL BUT T HE ELECTRICAL YARD FENCING IS A PART OF THE WINDMILL. WE ACCORDINGLY DIRECT THE ASSESSING OFFICER TO ALLOW T HE DEPRECIATION AT THE RATE OF 80% ON THE ELECTRICAL Y ARD FENCING. ACCORDINGLY, GROUND NO.3 IS PARTLY-ALLOWE D. 5 THUS, WE FIND FOUNDATION, CIVIL AND ELECTRICAL WORK WAS NECESSARY FOR INSTALLATION OF WIND MILL AND IS CLEA RLY A PART AND PARCEL OF WINDMILL PROJECT ON WHICH DEPRECIATIO N @80% IS ALLOWABLE. REGARDING ROAD IT WAS HELD THAT CONS TRUCTION FOR MOVEMENT OF CRANE COULD NOT BE ALLOWED AS PART OF WINDMILL BUT ELECTRIC YARD WAS HELD AS PART OF WIND MILL. ACCORDINGLY, THE TRIBUNAL DIRECTED THE ASSESSING OF FICER TO ALLOW IN SIMILAR SITUATION THE DEPRECIATION @80% ON ELECTRIC YARD FENCING. 4. FACTS BEING SIMILAR, SO FOLLOWING SAME REASONING WE DIRECT THE ASSESSING OFFICER TO ALLOW THE DEPRECIAT ION @80% ON ELECTRIC YARD FENCING. BUT ON THE POINT OF DEPR ECIATION OF APPROACH ROAD 10% IS JUSTIFIED. WE UPHOLD THE SAME . 5. AS A RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. SIMILAR ISSUE AROSE IN REMAINING THREE AP PEALS, SO FOLLOWING THE SAME RATIO ALL THE REMAINING THREE AP PEALS ARE ALSO PARTLY ALLOWED AS DISCUSSED ABOVE. PRONOUNCED IN THE OPEN COURT ON THIS THE 29 TH DAY OF MAY, 2013. (R.K. PANDA) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED : 29 TH MAY 2013 SATISH 6 COPY OF THE ORDER IS FORWARDED TO : 1. THE ASSESSEE 2. THE DEPARTMENT 3. THE CIT(A)-V, PUNE 4. THE CIT-V, PUNE 5. D.R. A BENCH, PUNE 6. GUARD FILE BY ORDER // TRUE COPY // PRIVATE SE CRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE 7