Karnavati Polyster Pvt. Ltd., Ahmedabad V. The Asstt. Commissioner of Income Tax, Circel-2(1)(2), Ahmedabad

ITA 3424/AHD/2016

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9621 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2013-2014
• Appeal Filed On: 19-12-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 147; 263

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL , B BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED , ACCOUNTANT MEMBER AND MS MADHUMITA ROY, JUDICIAL MEMBER ./ ITA NO.3424/AHD/2016 / ASSTT. YEAR : 2013 - 2014 KARNAVA TI POLYESTER PVT. LTD., B/H COZY HOTEL, RANIPURPATIA BUS STAND , NAROL - SARKHEJ HIGHWAY , AHMEDABAD - 382441. PAN: AABCK4806G VS . ACIT , CIRCLE - 2(1) (2) , AHMEDABAD . (APPLICANT) ( RESPON D ENT ) ASSESSEE BY : SHRI ASEEM THAKKAR, A.R REVENUE BY : SHRI MUDITNAGPAL , SR. DR / DATE OF HEARING : 30 / 11 / 201 8 / DATE OF PRONOUNCEMENT: 11 /12 /2 01 8 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISS IONER OF INCOME TAX (APPEALS) - 2 , AHMEDABAD [CIT(A) IN SHORT] VIDE APPEAL NO. CIT(A) - 2/298/AC.CIR.2(1)(2)/2015 - 16 - 15 , DATED 13 / 10 / 2016 ARISING IN THE MATTER OF ASSESSMENT ORDER PASSED UNDER S.143(3)OF THE INCOME TAX ACT, 1961 ( HERE - IN - AFTER REFERRED TO AS 'THE ACT') DATED 21 /12 / 201 5 RELEVANT TO ASSESSMENT YEAR (AY) 2013 - 14 . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. ITA NO.3424/AHD/2016 ASSTT. YEAR 2013 - 14 2 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ADDITION OF RS.6,51,220/ - MADE BY THE ASSESSING OFFICER FOR THE ALLEGED EXCESS CLAIM OF DEPRECIATION ON TEMPO. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN C ONFIRMING THE OF DISALLOWANCE OF RS.5,17,8537 - MADE BY THE ASSESSING OFFICER FOR THE ALLEGED LATE PAYMENT OF EMPLOYEES CONTRIBUTION TO PF AMOUNTING TO RS.3,93,7977 - AND ESIC AMOUNTING TO RS. 1,24,0567 - . 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR MODIFY ANY OF THE GROUNDS OF APPEAL ON OR BEFORE THE DATE OF HEARING OF APPEAL . 3. THE 1 ST ISSUE RAISED BY THE ASSESSEE IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 6,51,220/ - ON ACCOUNT OF THE EXCESS CLAIM OF DEPRECIATION ON THE TEMPO. 3.1 BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY AND ENGAGED IN THE BUSINESS OF PROCESSING OF FABRICS. THE ASSESSEE DURING THE YEAR HAS CLAIMED THE DEPRECIATION ON THE TEMPO PURCHASED DURING THE YEAR AS WELL AS WDV BROUGHT FORWARD FROM THE EARLIER YEAR AT THE RATE 50% WHEREAS THE AO WAS OF THE VIEW THAT THE ASSESSEE IS ELIGIBLE FOR DEPRECIATION AT THE RATE OF 15% ON THE VALUE OF THE TEMPO. THEREFORE THE AO WORKED OUT THE EXCESS DEPRECIATION C LAIMED BY THE ASSESSEE AT RS. 6,51,220/ - AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 4. AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO CONFIRMED THE ORDER OF THE AO BY OBSERVING AS UNDER: 3.3. DECISION: I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, ASSESSMENT ORDER AND SUBMISSION OF THE APPELLANT. THE AO HAS MADE THE DISALLOWANCE OF THE EXCESS CLAIM OF DEPRECATION ON TEMPO AMOUNTING TO RS.6,51,220/ - FOR THE REASON THAT THE DEPRECATION WAS ELIGIBLE @1 5% IN PLACE OF 50% CLAIMED BY THE APPELLANT. ALTHOUGH IN THE ASSESSMENT PROCEEDINGS THE APPELLANT VIDE ITS LETTER DTD . 1.12.2015 HAS ADMITTED THIS MISTAKE AND STALED THAT THE DEPRECATION @15% WAS ONLY AVAILABLE TO THE APPELLANT. THE CONTENTION OF THE APPEL LANT HAS BEEN REPRODUCED BY THE AO IN PARA NO.3 OF THE ASSESSMENT ORDER. SINCE THE APPELLANT HIMSELF HAS ADMITTED THE ITA NO.3424/AHD/2016 ASSTT. YEAR 2013 - 14 3 MISTAKE COMMITTED BY IT AND CLAIMING THE EXCESS DEPRECATION FOR WHICH IT WAS NOT ELIGIBLE AND HENCE THE DISALLOWANCE OF EXCESS DEPRECATION CLAIM WAS RIGHTLY MADE BY THE AO AND THE SAME IS CONFIRMED. - IT IS NEEDLESS TO MENTION THAT THE CLOSING WDV OF THE TEMPO AS ON 3] .3.2013 MAY ACCORDINGLY BE WORKED OUT AND SAME MAY BE CONSIDERED FOR WORKING OUT THE DEPRECATION IN THE SUBSEQUENT ASSESSMEN T YEARS. HENCE THE GROUND OF APPEAL IS DISMISSED. 5. BEING AGGRIEVED BY ORDER OF THE LD. CIT(A) ASSESSEE IS IN APPEAL BEFORE US. THE LD. AR BEFORE US AGREED FOR THE ADDITION OF THE AMOUNT REPRESENTING THE EXCESS DEPRECIATION CLAIMED BEYOND 15% ON THE VA LUE OF THE IMPUGNED ASSETS. THE ASSESSEE FURTHER AGREED THAT THE ASSESSEE IS ELIGIBLE FOR DEPRECIATION AT THE RATE OF 15% ON THE WDV BROUGHT FORWARD FROM THE EARLIER YEAR AND THE TEMPOS PURCHASED IN THE YEAR UNDER CONSIDERATION AFTER ADJUSTING THE SALE OF THE TEMPO. 6. ON THE OTHER HAND THE LD. DR SUBMITTED THAT THE ASSESSEE HAS CLAIMED EXCESS DEPRECIATION EVEN IN THE EARLIER YEARS AND ACCORDINGLY REQUESTED THE BENCH GIVE A DIRECTION TO REOPEN THE CASES WHERE THE ASSESSEE HAS CLAIMED EXCESS DEPRECIATION. T HE LD. DR VEHEMENTLY SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS A FACT ON RECORDS THAT THE ASSESSEE HAS CLAIMED DEPRECIATION AT THE RATE OF 50% WHEREAS IT IS ELIGIBLE FOR THE DEPRECIATION AT THE RATE OF 15% ON THE VALUE OF THE ASSE TS. THEREFORE WE DO NOT FIND THE REASON TO INTERFERE IN THE ORDER OF AUTHORITIES BELOW. 7.1 THE ISSUE BEFORE US PERTAINS TO THE ASSESSMENT YEAR 2013 - 14 WHICH NEEDS TO BE ADJUDICATED BY US. THERE ARE POWERS GIVEN TO THE INCOME TAX AUTHORITIES UNDER SECTIO N 147, 263 AND 154 OF THE ACT TO BRING THE INCOME ITA NO.3424/AHD/2016 ASSTT. YEAR 2013 - 14 4 UNDER THE NET OF TAX WHICH ESCAPED ASSESSMENT. BUT THE AUTHORITIES BELOW HAVE NOT EXERCISED THEIR POWERS BY RESORTING TO THE PROVISIONS OF THESE SECTIONS IN RESPECT OF THOSE WHERE THE ASSESSEE HAS CLAIMED E XCESSIVE DEPRECIATION ON THE TEMPOS. THEREFORE WE ARE NOT INCLINED TO ADJUDICATE THE CONTENTION RAISED BY THE LD. DR FOR ISSUING A DIRECTION TO THE AO TO REOPEN THE CASES UNDER SECTION 147 OF THE ACT ON ACCOUNT OF THE EXCESS CLAIM OF DEPRECIATION. IN THIS REGARD, WE FIND SUPPORT AND GUIDANCE FROM THE JUDGMENT OF HON BLE SUPREME COURT OF INDIA IN CASE OF ITO VS. MURALIDHARBHAGWAN DAS REPORTED IN 52 ITR 335 WHEREIN IT WAS HELD AS UNDER: SECTION 33(4) OF 1922 ACT ONLY REFERS TO A FINDING OR DIRECTION MADE BY AN APPELLATE AUTHORITY AND DOES NOT ITSELF CONFER ANY POWER ON AN APPELLATE AUTHORITY TO MAKE A FINDING OR DIRECTION. INDEED, SECTION 34 OF 1922 ACT DEALS WITH ENTIRELY A DIFFERENT ASPECT, THAT OF EMPOWERING AN ITO TO BRING TO ASSESSMENT ESCAPED INCOME, AN D HAS NO CONCERN WITH THE POWERS OF AN APPELLATE AUTHORITY. THE PROVISION WHICH DEALS WITH THE POWERS OF AN APPELLATE AUTHORITY IS SECTION 31 OF 1922 ACT . 7.2 IN VIEW OF THE ABOVE WE ARE NOT INCLINED TO GIVE ANY DIRECTION TO THE AO FOR REOPENING THE CASES WHERE THE ASSESSEE HAS CLAIMED EXCESS DEPRECIATION. IN VIEW OF ABOVE THE GROUND OF THE APPEAL OF THE ASSESSEE IS DISMISSED. 8. THE 2 ND ISSUE RAISED BY THE ASSESSEE IS THAT LEARNED IT CIT (A) ERRED IN CONFIRMING THE DISALLOWANCE OF RS. 5 , 17 , 853 / - ON ACCOUNT OF LA TE PAYMENT OF EMPLOYERS CONTRIBUTION TO PF AND ESIC. 8.1 AT THE OUTSET , THE LEARNED COUNSEL FOR THE ASSESSEE FAIRLY AGREED TH AT THE IMPUGNED ISSUE STANDS COVERED AGAINST THE ASSESSEE BY THE JUDGMENT OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF GUJARAT STATE ROAD TRANSPORT CORPORATION REPORTED IN 366 ITR 170. ITA NO.3424/AHD/2016 ASSTT. YEAR 2013 - 14 5 8.2 IN VIEW OF THE ABOVE , WE ARE NOT INCLINED TO INTERFERE IN THE ORDER OF THE REVENUE AUTHORITIES ON THIS ISSUE. THUS THE GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED . 9 . IN THE RESULT , THE APPEAL OF THE ASSESSEE IS DISMISSED . O RDER PRONOUNCED IN THE COURT ON 11 /12/ 2018 AT AHMEDABAD. - SD - - SD - (MS MADHUMITA ROY ) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER (TRUE COPY) A HMEDABAD; DATED 11 / 12 /2018 MANISH / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , / DR, ITAT, 6. / GUARD FILE .