Bhanu Cement Pipe Industries, Madhavnagar V. Income tax Officer, Sangli

ITA 343/PUN/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 2360 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 10-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MANDAR KHIRE
• Keywords: Depreciation; Additional depreciation
• Section: 143(3); 32(1)(iia)

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.343/PUN/2017 / ASSESSMENT YEAR : 2012-13 BHANU CEMENT PIPE INDUSTRIES, 186/1, OPP. OLD RAILWAY STATION, MADHAVNAGAR 416 406. PAN : AABFB4280E. . / APPELLANT V/S THE INCOME TAX OFFICER, WARD 2(3), SANGLI. . / RESPONDENT ASSESSEE BY : SHRI MANDAR KHIRE. REVENUE BY : SHRI PANKAJ GARG. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY ASSESSEE IS EMANATING OUT OF THE ORD ER OF COMMISSIONER OF INCOME TAX (APPEALS) 1, KOLHAPUR DATED 0 8.12.2016 FOR THE ASSESSMENT YEAR 2012-13. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RE CORD ARE AS UNDER :- ASSESSEE IS A FIRM STATED TO BE ENGAGED IN THE BUSINESS OF MANUFACTURING AND SALE OF NON-EDIBLE OILCAKES, OIL SEEDS AND ALSO IN THE GENERATION OF ELECTRICITY. ASSESSEE ELECTRONICALLY FILED ITS RE TURN OF INCOME FOR A.Y. 2012-13 ON 30.09.2012 DECLARING TOTAL LOSS O F / DATE OF HEARING : 13.02.2019 / DATE OF PRONOUNCEMENT: 08.03.2019 2 ITA NO.343/PUN/2017 RS.3,20,95,175/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT VIDE ORDER DT.18.03.2015 AND THE TOTAL INCOME WAS DETERMINED AT RS.2,13,77,620/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFOR E LD.CIT(A), WHO VIDE ORDER DT.08.12.2016 (IN APPEAL NO.KOP/92/14-15) GR ANTED PARTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A ), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS : 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) ERRED IN CONFIRMING THE ORDER OF THE AO SO F AR AS THE DISALLOWANCE OF ADDITIONAL DEPRECIATION OF RS.71,58,767/- IN RES PECT OF ON WIND TURBINE AT SADAWAGHAPUR IS CONCERNED. 2. WHILE CONFIRMING THE DISALLOWANCE OF ADDITIONAL DEPRECIATION, THE LEARNED LD.CIT(A) ERRED IN NOT PROPERLY APPRECIATIN G THE EXPLANATION FILED AND OF IGNORING THE DECISIONS OF THE MADRAS HIGH CO URT IN 321 ITR 477 & 321 ITR 481. 3. THE REASONS ASSIGNED FOR CONFIRMING THE DISALLOW ANCE OF ADDITIONAL DEPRECIATION ARE WRONG, INSUFFICIENT AND CONTRARY T O THE PROVISIONS OF LAW AND FACTS. 3. BEFORE US, AT THE OUTSET, LD.A.R. SUBMITTED THAT THOUGH ASSESSEE HAS RAISED VARIOUS GROUNDS BUT THE SOLE ISSUE IS WITH RE SPECT TO DISALLOWANCE OF ADDITIONAL DEPRECIATION IN RESPECT OF WIND TURBINE. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND ON PERUSING THE DETAILS FURNISHED, AO NOTICED THAT DURING THE YEAR UND ER CONSIDERATION, ASSESSEE HAD INSTALLED WINDMILL TURBINE AT SADAWAGHAPUR, TAL - PATAN, DIST. - SATARA, WHICH WAS INSTAL LED BEFORE 30.09.2011 AND PUT TO USE AND COMMISSIONING WAS STARTED ON 30.09.2011. AO NOTED THAT WITH RESPECT TO THE WINDMILL ASS ESSEE HAD CLAIMED DEPRECIATION AT 80% ON WINDMILL TURBINES AS WELL AS STRUCTUR ES ERECTED FOR FITMENT OF SUCH TURBINES, ELECTRICAL WORK, LICENSE FEES ETC. APART FROM THAT ASSESSEE ALSO CLAIMED ADDITIONAL DEPRECIATIO N AT 20% ON THE COST OF THE WINDMILL. AO WAS OF THE VIEW THAT AS PER THE 3 ITA NO.343/PUN/2017 PROVISIONS OF SEC.32(1)(IIA), ADDITIONAL DEPRECIATION ON WINDMILL IS NOT ADMISSIBLE UPTO 31.03.2013 AND IS ADMISSIBLE ONLY FROM 01.04.20 13 ON ACCOUNT OF THE AMENDMENT MADE BY THE FINANCE ACT, 2012 WHICH IS FROM A.Y. 2013-14. HE ACCORDINGLY DENIED THE CLAIM OF ADDIT IONAL DEPRECIATION AND ALSO ON THE DEPRECIATION WHICH WAS CLAIMED AT 80%. HE THUS DISALLOWED AGGREGATE AMOUNT OF RS.1,06,67,554/- AND ON ACCOUNT OF ADDITIONAL DEPRECIATION OF RS.71,58,767/-. AGGRIEVE D BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO DECIDED THE ISSUE OF DEPRECIATION ON THE INSTALLATION OF WINDMILL TURBINE IN FAVOUR OF ASSESSEE BUT HOWEVER UPHELD THE ORDER OF AO IN DENYING THE CLAIM OF ADDITIONAL DEPRECIATION U/S 32(1)(IIA) OF THE ACT BY HOLD ING THAT THE AMENDMENT BROUGHT IN SECTION 32(1)(IIA) IS APPLICABLE ONLY FROM A.Y. 2013-14 AND NOT FOR EARLIER YEARS. AGGRIEVED BY THE OR DER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US. 5. BEFORE US, AT THE OUTSET, LD.A.R. SUBMITTED THAT THE IS SUE OF ADDITIONAL DEPRECIATION IS COVERED IN ASSESSEES FAVOUR BY THE DECISION OF III MEMBER IN THE CASE OF M/S. GIRIRAJ ENTERPRISES VS. DCIT IN ITA NOS. 1384 & 1385/PUN/2015 DATED 23.02. HE ALSO PLACED ON RECORD THE COPY OF THE AFORESAID DECISION. HE FURTHER SUBMITTED THAT FOLLOWING THE DECISION IN THE CASE OF M/S. GIR IRAJ ENTERPRISES (SUPRA), THE PUNE BENCH OF THE TRIBUNAL HAS HE LD THAT ASSESSEE IS ELIGIBLE FOR CLAIM OF ADDITIONAL DEPRECIATION. LD.D .R. ON THE OTHER HAND, SUPPORTED THE ORDER OF LD.CIT(A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT GROUND IS WITH RESPEC T TO CLAIM OF ADDITIONAL DEPRECIATION U/S 32(1)(IIA) OF THE ACT. IT IS REVENUE S CONTENTION THAT ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S 32(1)(IIA) OF 4 ITA NO.343/PUN/2017 THE ACT PRIOR TO 01.04.2013 IN VIEW OF THE AMENDMENT MADE BY THE FINANCE ACT, 2012. IN THE PRESENT CASE, LD.A.R. HAS RELIE D ON THE THIRD MEMBER DECISION IN THE CASE OF M/S. GIRIRAJ ENTERPRISES VS . DCIT (SUPRA) FOR THE PROPOSITION THAT GENERATION OF ELECTRICITY BY WINDMILL AMOUNTS TO PRODUCTION OF ARTICLE OR A THING AND CONSEQUE NTLY HOLDING THAT THE ASSESSEE IS ENTITLED FOR ADDITIONAL DEPRECIATION AS PER SECTION 32(1)(IIA) OF THE ACT. WE FIND THAT IT IS THE DECIDED ISSUE THAT THE GENERATION OF ELECTRICITY BY WINDMILL AMOUNTS TO PRODUCTION O F ARTICLE OR A THING AND THEREFORE, THE ASSESSEE IS ENTITLED FOR ADDITION AL DEPRECIATION AS PER SECTION 32(1)(IIA) OF THE ACT. THE RELE VANT OBSERVATIONS FROM THE DECISION OF THIRD MEMBER ARE AS UNDER : 6. THE QUESTION BEFORE THE HON'BLE COURT WAS- WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS RIGHT IN HOLDING THAT THE GENERATION OF ELECTRICITY BY WINDMILL AMOUNTS T O PRODUCTION OF ARTICLE OR A THING AND CONSEQUENTLY HOLDING THAT THE ASSESS EE IS ENTITLED FOR ADDITIONAL DEPRECIATION AS PER SECTION 32(1) (IIA) OF THE ACT? 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTE D THAT SUCH BENEFIT SHOULD NOT BE ALLOWED BECAUSE OF SPECIFIC AMENDMENT HAVE BEEN ENACTED SUBSEQUENT TO THE YEAR IN QUESTION. IN VIEW OF THE DECISION OF THE HON'BLE HIGH COURT, I DO NOT FIND IT NECESSARY TO CONSIDER THE OTHER DECISIONS OF VARIOUS BENCHES OF THIS TRIBUNAL. 8. I DO NOT FIND THIS TO BE A LEGITIMATE ARGUMENT I N VIEW OF WHAT THE HON'BLE HIGH COURT OF MADRAS DECIDES. THE CASE IS T HEREFORE ANSWERED IN THE AFFIRMATIVE THAT THE ASSESSEE IS ENTITLED TO CL AIM ADDITIONAL BENEFIT OF DEPRECIATION U/S. 32(1) (IIA) OF THE INCOME TAX ACT . 8. BEFORE US, REVENUE HAS NOT BROUGHT ANY MATERIAL ON R ECORD TO DEMONSTRATE THAT THE AFORESAID DECISION OF PUNE BENCH OF THE TRIBUNAL IN THE CASE OF M/S. GIRIRAJ ENTERPRISES (SUPRA) HAS BEEN S ET ASIDE / STAYED BY HIGHER JUDICIAL FORUM. IN VIEW OF THE AFORESAID FACTS, WE FOLLOWING THE DECISION OF PUNE BENCH OF THE TRIBUNAL IN THE C ASE OF M/S. GIRIRAJ ENTERPRISES (SUPRA), WE HOLD THAT ASSESSEE IS ENT ITLED FOR CLAIM OF ADDITIONAL DEPRECIATION AND THUS DIRECT ACCORDINGLY. WE TH EREFORE SET 5 ITA NO.343/PUN/2017 ASIDE THE ORDER OF LD.CIT(A). THUS, THE GROUND OF THE ASSESSEE IS ALLOWED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED ON 8 TH DAY OF MARCH, 2019. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER PUNE; DATED : 8 TH MARCH, 2019. YAMINI #$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-1, KOLHAPUR. PR. CIT I, KOLHAPUR. '#$ %%&',) &', / DR, ITAT, B PUNE; $*+,/ GUARD FILE. / BY ORDER // TRUE COPY // -./%0&1 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.