DCIT, Pondicherry V. Grace Infrastructure Pvt. Ltd., Pondicherry

ITA 3273/CHNY/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6132 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 04-07-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 02-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAILENDRA MAMMIDI
• Assessee Lawyers: J SREE VIDYA
• Keywords: Depreciation

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: CHENNAI , ' , & ' BEFORE SHRI SANJAY ARORA, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER ./ ITA NOS.1899 & 3273/MDS/2016 &' ' /ASSESSMENT YEARS: 2006-07 & 2007-08 THE DY. COMMISSIONER OF INCOME- TAX, PONDICHERY CIRCLE, NO.378-386, MAHATMA GANDHI ROAD, PONDICHERRY-605 001. VS. M/S.GRACE INFRASTRUCTURE- PVT. LTD., A-5, INDUSTRIAL ESTATE, THATTANCHAVADY, PONDICHERRY-605 009. [PAN: AACCG 1992 N ] ( ) /APPELLANT) ( *+) /RESPONDENT) CROSS - OBJECTION NO S . 139/MDS/2016 & 11 /MDS/20 17 &' ' /ASSESSMENT YEARS: 2006-07 & 2007-08 M/S.GRACE INFRASTRUCTURE PVT. LTD., A-5, INDUSTRIAL ESTATE, THATTANCHAVADY, PONDICHERRY-605 009. VS. THE DY. COMMISSIONER OF- INCOME TAX, PONDICHERY CIRCLE, NO.378-386, MAHATMA GANDHI ROAD, PONDICHERRY-605 001. [PAN: AACCG 1992 N ] ( ) /APPELLANT) ( *+) /RESPONDENT) ASSESSEE BY : MS.J.SREE VIDYA, ADV. DEPARTMEN T BY : MR.SAILENDRA MAMMIDI, CIT - /DATE OF HEARING : 20.09.2017 - /DATE OF PRONOUNCEMENT : 21.09.2017 ITA NOS.1899 & 3273/MDS/2016 CO NO.139/MDS/2016 & CO NO.11/MDS/2017 :- 2 -: / O R D E R PER GEORGE MATHAN , JUDICIAL MEMBER : ITA NO.1899/MDS/2016 IS AN APPEAL FILED BY THE REV ENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), PUDUCHERRY , IN ITA NO.519/CIT(A)-PDY/2013-14 DATED 22.03.2016 FOR THE AY 2006-07 & CO NO.139/MDS/2016 IS A CROSS-OBJECTION FILED BY THE A SSESSEE IN THE REVENUES APPEAL NO.1899/MDS/2016 . ITA NO.3273/M DS/2016 IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CO MMISSIONER OF INCOME TAX (APPEALS), PUDUCHERRY, IN ITA NO.518/CIT(A)-PDY /2013-14 DATED 22.03.2016 FOR THE AY 2007-08 & CO NO.11/MDS/2017 I S A CROSS- OBJECTION FILED BY THE ASSESSEE IN THE REVENUES AP PEAL NO.3273/MDS/2016. 2.0 MR.SAILENDRA MAMMIDI, CIT., REPRESENTED ON BEHA LF OF THE REVENUE AND MS.J.SREE VIDYA, ADV., REPRESENTED ON BEHALF OF THE ASSESSEE. 3.0 AS THE ISSUES IN BOTH THE APPEALS ARE INTER-CON NECTED, COMMON AND RELATE TO THE SAME ASSESSEE, BOTH ARE DISPOSED OF B Y THIS COMMON ORDER. 4.0 THE COMMON ISSUE IN BOTH THE APPEALS OF THE REV ENUE AGAINST THE ACTION OF THE LD.CIT(A) IN ALLOWING THE CLAIMING OF DEPRECIATION AT 80% ON THE WIND MILLS. IT WAS SUBMITTED BY THE LD.DR THAT THE ASSESSEE HAS NOT ITA NOS.1899 & 3273/MDS/2016 CO NO.139/MDS/2016 & CO NO.11/MDS/2017 :- 3 -: EXERCISED THE OPTION UNDER RULE-5(1) OF THE IT RULE S, 1962 R.W.S.32(1)(II). THE AO HAD DISALLOWED THE ASSESSEES CLAIM FOR HIGH ER RATE OF DEPRECIATION AT 80%. IT WAS FAIRLY AGREED BY BOTH THE SIDES THA T THE ISSUE WAS SQUARELY COVERED BY THE DECISION OF THE HONBLE JURISDICTION AL HIGH COURT OF MADRAS IN THE CASE OF CIT VS. KIKANI EXPORTS PVT. LTD. REP ORTED IN 369 ITR 500 WHEREIN WHICH HAS BEEN HELD THAT THE ASSESSEE IS EN TITLED TO CLAIM OF DEPRECIATION ON WIND MILLS AT 80% IF THE OPTION IS EXERCISED IN THE RETURN FILED WITHIN THE TIME LIMIT PRESCRIBED UNDER THE SE COND PROVISO TO RULE 5(1A) OF IT RULES. IT WAS A SUBMISSION BY THE LD.A R THAT THE ASSESSEE HAVING FILED RETURN OF INCOME WITHIN THE TIME PROVI DED U/S.139(1) AND HAVING CLAIMED HIGHER RATE OF DEPRECIATION AT 80%, IN VIEW OF THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT REFERRED T O SUPRA, THE ASSESSEE WAS ENTITLED TO THE HIGHER RATE OF DEPRECIATION. 4.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AS I T IS NOTICED THAT THE LD.CIT(A) HAS FOLLOWED THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF KIKANI EXPORTS PVT. LTD., REFE RRED TO SUPRA, WE FIND NO ERROR IN THE FINDINGS OF THE LD.CIT(A) WHICH CALLS ANY INTERFERENCE ON THIS ISSUE. IN THESE CIRCUMSTANCES, GROUND NO.2 OF THE REVENUES APPEAL IN ITA NO.1899/MDS/2016 AND GROUND NOS.2 & 3 OF THE RE VENUES APPEAL IN ITA NO.3273/MDS/2016 STANDS DISMISSED. ITA NOS.1899 & 3273/MDS/2016 CO NO.139/MDS/2016 & CO NO.11/MDS/2017 :- 4 -: 5.0 IN REGARD TO GROUND NO.3 OF THE REVENUES APPEA L IN ITA NO.1899/MDS/2016, IT WAS SUBMITTED BY THE LD.DR THA T THE ISSUE WAS AGAINST THE ACTION OF THE LD.CIT(A) IN DELETING THE ADDITION OF RS.27.00 LAKHS MADE U/S.68 BY ADMITTING FRESH EVIDENCE. IT WAS A SUBMISSION THAT IN THE COURSE OF THE ASSESSMENT, IT WAS NOTICED THA T THE ASSESSEE HAD SHOWN A LOAN OF RS.27.00 LAKHS FROM SHRI L.M.SHAH, THE MD OF THE ASSESSEE COMPANY WHEREAS THE RECORDS OF SHRI L.M.SH AH FOR THE RELEVANT AY DID NOT SHOW THE AMOUNT OF RS.27.00 LAKHS. IT W AS A SUBMISSION THAT BEFORE THE LD.CIT(A) IT WAS EXPLAINED BY THE ASSESS EE THAT THE AMOUNT WAS RECEIVED FROM SHRI A.L.SHAH AND NOT FROM SHRI L .M.SHAH AND IT WAS ONLY A CLERICAL MISTAKE OF THE ACCOUNTANT OF THE AS SESSEE COMPANY WHICH HAD BEEN RECTIFIED. IT WAS A SUBMISSION THAT THE L D.CIT(A) HAD ACCEPTED THE CLAIM OF THE ASSESSEE WITHOUT GRANTING THE AO O PPORTUNITY TO EXAMINE THE SAME. 5.1 IN REPLY, THE LD.AR SUBMITTED THAT SHE HAD NO O BJECTION IF THIS ISSUE WAS RESTORED TO THE FILE OF THE AO FOR EXAMINATION. 5.2 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AS ADMITTED BY THE LD.AR THE ISSUE OF CASH CREDIT OF RS.27.00 LAKHS MA DE BY INVOKING THE PROVISIONS OF SEC.68 HAS TO BE RESTORED TO THE FILE OF THE AO FOR RE- ADJUDICATION TO VERIFY AS TO WHETHER THE SAME WAS G IVEN BY THE MD, SHRI L.M.SHAH OR WAS LOAN TAKEN FROM SHRI A.L.SHAH, WRON GLY ACCOUNTED IN THE ITA NOS.1899 & 3273/MDS/2016 CO NO.139/MDS/2016 & CO NO.11/MDS/2017 :- 5 -: LEDGER OF SHRI L.M.SHAH. THE AO SHALL RE-ADJUDICAT E THE ISSUE AFTER GRANTING THE ASSESSEE ADEQUATE OPPORTUNITY TO SUBST ANTIATE HIS CLAIM. 6.0 IN THE RESULT, THE APPEAL FILED BY THE REVENUE IN ITA NO.1899/MDS/2016 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES AND THE APPEAL FILED BY THE REVENUE IN ITA NO.3273/MDS/2016 STANDS DISMISSED. 7.0 AT THE TIME OF HEARING, THE LD.AR DID NOT WISH TO PRESS THE CROSS- OBJECTIONS FILED BY THE ASSESSEE. CONSEQUENTLY, TH E CROSS-OBJECTIONS FILED BY THE ASSESSEE STANDS DISMISSED AS WITHDRAWN. ORDER PRONOUNCED IN THE OPEN COURT ON SEPTEMBER 21 , 2017, AT CHENNAI. SD/- SD/- ( ) ( SANJAY ARORA ) /ACCOUNTANT MEMBER ( ' ) (GEORGE MATHAN) & /JUDICIAL MEMBER /CHENNAI, 1 /DATED: SEPTEMBER 21, 2017. TLN - *&23 43 /COPY TO: 1. ) /APPELLANT 4. 5 /CIT 2. *+) /RESPONDENT 5. 3 *&& /DR 3. 5 ( ) /CIT(A) 6. ' /GF