ACIT, CIR- 8, Nagpur V. M/S. BOMBAY GOODS TRANSPORT GARAGE, Nagpur

ITA 324/NAG/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2204 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 11 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 31-03-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 20-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Question of law; Reason to believe
• Section: 147

Judgement Text

1 ITA NOS. 324,326,327/NAG/2014 & ITA NO. 186/NAG/2015 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. S.NO. I.T.A. NO. ASSTT. YEAR. 1. 324/NAG/2014 2007 - 08. 2. 326/NAG/2014 2008 - 09. 3. 327/NAG/2014 2010 - 11. 4. 186 /NAG/2015 2009 - 10. ASSTT. COMMISSIONER OF INCOME - TAX, M/S BOMBAY GOODS TRANSPORT CIRCLE - 8 / CIRCLE - 4, NAGPUR. VS. GARAGE, NAGPUR. PAN AABFB3874E . (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI NARENDRA KANE. RESPONDENT : SHRI K.P. DEWANI. DATE OF HEARING : 31 - 03 - 2016 DATE OF PRONOUNCEMENT : 31 ST MAY , 2016. O R D E R PER MUKUL K. SHRAWAT, J.M. THESE FOUR APPEALS HAVE BEEN FILED BY THE REVENUE EMANATING FROM THE FOUR SEPARATE ORDERS OF LEARNED CIT(APPEALS) - II, NAGPUR DATED 12 TH MARCH, 2014 AND 8 TH APRIL, 2015. THE GROUNDS RAISED ARE REPRODUCED FROM THE LED YEAR I.E. ASSESSMENT YEAR 2007 - 08 A S UNDER : 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, WHETHER THE LD. CIT(APPEALS) WAS RIGHT IN HOLDING THE REASSESSMENT PROCEEDING INVALID WITHOUT APPRECIATING THE FACT THAT THE ISSUE RAISED IN THE REASSESSMENT PROCEEDING WAS NOT EXAMINED BY AO IN THE ORIGINAL ASSESSMENT? 2 ITA NOS. 324,326,327/NAG/2014 & ITA NO. 186/NAG/2015 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, WHETHER THE LD. CIT(APPEALS) WAS RIGHT IN HOLDING REASSESSMENT PROCEEDING INVALID WITHOUT APPRECIATING THE FACT THAT IN VIEW OF SECOND PROVISO TO SEC. 147 OF THE I.T. ACT EVEN PRODUCTION BEFORE THE ASSESSING OFFICER OF ACCOUNTS BOOKS OR OTHER EVIDENCE S FROM WHICH MATERIAL EVIDENCE COULD HAVE BEEN DISCOVERED BY THE ASSESSING OFFICER WILL NOT NECESSARILY AMOUNT TO DISCLOSURE WITHIN THE MEANING OF THIS SECTION? 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, WHETHER THE LD. CIT(APPEALS) WAS RIGHT IN D IRECTING TO DELETE ADDITIONS WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE FAILED TO SHOW THAT THE VEHICLE UNDER CONSIDERATION WERE ACTUALLY GIVEN ON HIRE WHICH IS IN PRIMARY CONDITION FOR ALLOWABILITY OF DEPRECIATION. 4. WHETHER ON THE FACTS AND CIRCUMSTAN CES OF THE CASE, WHETHER THE LD. CIT(APPEALS) WAS RIGHT IN DIRECTING TO DELETE THE ADDITION WITHOUT DISCUSSING MERITS OF DISALLOWANCES IN RESPECT OF PUMPS, TRACTORS AND COMPACTORS? 2. IN RESPECT OF GROUND NOS. 1 AND 2 FACTS HAVE REVEALED THAT ORDER U/S 143 (3) READ WITH SECTION 147 WAS PASSED FOR ASSESSMENT YEAR 2007 - 08 ON 18 TH MARCH, 2013. IN THE ASSESSMENT ORDER THE AO HAD MADE AN OBSERVATION THAT THE ASSESSEE HAD NOT TAKEN ANY OBJECTION FOR THE REOPENING OF THE CASES. THE CASES WERE REOPENED ON THE GROUND THAT THE AO HAD REASON TO BELIEVE THAT EXCESS DEPRECIATION WAS ALLOWED. THE AS S ESSEE HAD CLAIMED DEPRECIATION ON TRANSIT MIXTURES, TRACTORS, JCB AT THE RATE OF 20%. AS AGAINST THAT THE AO HAS HELD THAT THE ASSESSEE WAS ENTITLED FOR THE DEPRECIATION ONLY A T THE RATE OF 15% . THE EXCESS DEPRECIATION WAS , THEREFORE, DISALLOWED FOR THE YEARS UNDER CONSIDERATION. 3. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, LEARNED CIT(APPEALS) HAS HELD THAT THE REOPENING WAS NOT IN ACCORDANCE WITH TH E PROVISIONS OF SECTION 147 OF I.T. ACT. ACCORDING TO LEARNED CIT(APPEALS), AT THE TIME OF ORIGINAL ASSESSMENT ALL THE FACTS WERE AVAILABLE AND NO NEW MATERIAL WAS ON RECORD. THE ACTION OF THE AO WAS NOTHING BUT THE REVIEW OF THE INFORMATION ALREADY ON REC ORD. THE GROUND CHALLENGING THE REOPENING WAS, THEREFORE, ALLOWED. 3 ITA NOS. 324,326,327/NAG/2014 & ITA NO. 186/NAG/2015 4. ON HEARING THE SUBMISSIONS OF BOTH THE SIDES WE HAVE NOTICED THAT THE LEARNED CIT(APPEALS) HAS NOT ONLY QUASHED THE PROCEEDINGS INITIATED U/S 147/148 OF I.T. ACT BUT ALSO DECIDED THESE CASES ON MERITS PERTAINING TO THE CORRECT RATE OF DEPRECIATION TO BE APPLIED ON THE MACHINERIES IN QUESTION. 5. FROM THE SIDE OF THE REVENUE THE ONLY OBJECTION OF THE LEARNED D.R. WAS THAT THE ASSESSEE HAD NOT CONTESTED THE REOPENING BEFORE THE AO THEREFOR E, IT WAS NOT LEGALLY PERMISSIBLE TO CHALLENGE THE REOPENING BEFORE THE LEARNED CIT(APPEALS). 6. ON THE OTHER HAND, FROM THE SIDE OF THE RESPONDENT - ASSESSEE LEARNED A.R. HAS PLEADED T HAT ON THE LEGALITY OF THE REOPENING AS WELL AS ON THE ISSUE OF CLAIM OF DEPRECIATION, BOTH THE GROUNDS ARE IN FAVOUR OF THE ASSESSEE AS HELD BY LEARNED CIT(APPEALS) . TO KEEP BREVITY IN MIND AND CONSIDERING FEW DECISIONS, NAMELY, KELVILATOR INDIA 320 ITR 561 (SC), AVENTIS PHARMA LTD. VS. ACIT 323 ITR 570 (BOM.), ASIAN PAINTS LTD. VS. DCIT 308 ITR 195 (BOM.), ALL THESE DECISIONS AS CITED BY LEARNED CIT(APPEALS), WE ARE NOT INCLINED TO INTERFERE WITH THE FINDINGS OF LEARNED CIT(APPEALS). AS A RESULT, THESE TWO GROUNDS OF THE REVENUE DEPARTMENT ARE HEREBY DISMISSED. 7. FOR THE SAKE OF COMPLETENESS AND TO RESOLVE THE ISSUE AS RAISED BY THE REVENUE DEPARTMENT IN GROUND NOS. 3 AND 4 AS REPRODUCED ABOVE, WE HAVE PERUSED THE ORDER OF LEARNED CIT(APPEALS) WHO HAS EXAMINED THE SEVERAL DECISIONS AS WELL AS DISCUSSED EACH MACHINE RY USED BY THE ASSESSEE AND THEREUPON ARRIVED AT A CONCLUSION THAT THE ASSESSEE IS ELIGIBLE FOR THE HIGHER RATE OF DEPRECIATION AT 30% IN RESPECT OF PAYMENTS TO CONTRACTORS, JVB, TROLLY ETC. ADMITTED FACTUAL POSITION IS THAT THE RESPECTED COORDINATE BENCHE S OF THE TRIBUNAL HAVE ALSO DECIDED THIS ISSUE IN SEVERAL OTHER CASES ALLOWING THE HIGHER RATE OF DEPRECIATION. THE DECISION OF SHAH CONSTRUCTION CO. 188 ITR 537 (BOM.) SUPPORTS THE VIEW TAKEN BY LEARNED CIT(APPEALS). LIKEWISE THE DECISION 4 ITA NOS. 324,326,327/NAG/2014 & ITA NO. 186/NAG/2015 OF G UJCO CARRIE RS 256 ITR 50 (GUJ.) HAS ALSO CONSIDERED THE ISSUE OF HEAVY MOTOR VEHICLES AND DIRECTED TO GRANT HIGHER RATE OF DEPRECIATION. WE HAVE ALSO NOTED THAT LEARNED CIT(APPEALS) HAS FOLLOWED THE DECISION OF GST INFRASTRUCTURE OF ITAT, NAGPUR BEARING ITA NOS 95 & 96/NAG/2012 ORDER DATED 06 - 02 - 2013. IN ONE OF THE SISTER CONCERN THE HONBLE HIGH COURT OF JUDICATURE AT BOMBAY (NAGPU R BENCH) IN INCOME TAX APPEAL NO. 65 OF 2013 TITLED AS DCIT VS. GST INFRASTRUCTURE, ORDER DATED 11 TH FEBRUARY, 2013 HAS HELD THAT THE CON CRETE MIXTURES ARE PERMANENTLY FITTED TO THE TRUCK AND IN SUCH SET OF FACTS THE COMMISSIONER AS WELL AS THE TRIBUNAL HELD THAT THE TRUCKS CARRYING THE CONCRETE MIXTURES ARE ENTITLED TO 30% DEPRECIATION, HENCE NO SUBSTANTIAL QUESTION OF LAW ARISES AND THOS E ORDERS WERE AFFIRMED. SEVERAL OTHER CASES HAVE ALSO BEEN CITED BEFORE US BUT WE DID NOT CONSIDER IT NECESSARY TO DISCUSS IN - EXTENSO. SINCE THE ISSUE OF CLAIM OF DEPRECIATION IS SQUARELY COVERED BY SEVERAL PRECEDENTS, THEREFORE, WE HEREBY AFFIRM THE FINDI NG OF LEARNED CIT(APPEALS). GROUNDS RAISED BY THE REVENUE FOR ALL THE YEARS ARE, THEREFORE, DISMISSED. 8. IN THE RESULT, THE APPEAL S OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 31 ST DAY OF MAY , 2016. SD/ - SD/ - (SHAMIM YAHYA) (M UKUL K. SHRAWAT) ACCOUNTANT MEMBER JUDICIAL MEMBER NAGPUR, DATED: 31 ST MAY , 2016. 5 ITA NOS. 324,326,327/NAG/2014 & ITA NO. 186/NAG/2015 COPY FORWARDED TO : 1. M/S BOMBAY GOODS TRANSPORT GARAGE, 5 MAK AZAD SCHOOL BUILDING, GANDHIBAGH, NAGPUR - 440 002. 2. A.C.I.T. , CIRCLE - 8 / CORCLE - 4, NAGPUR. 3. COMMISSIONER OF INCOME - TAX - ,NAGPUR. 4. CIT(APPEALS) - II, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, ITAT, NAGPUR . WAKODE.