RASHTRIYA CHEMICAL & FERTILIZERS LTD, MUMBAI V. CIT LTU, MUMBAI

ITA 3478/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8828 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 15-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K KRISHNA MURTHY
• Keywords: Depreciation; Additional depreciation
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 3478/MUM/2014 ASSESSMENT YEAR: 2009-10 M/S. RASHTRIYA CHEMICAL & FERTILISERS VS. CIT LTU LTD., PRIYADARSHINI EASTERN EXPRESS CENTRE 1 HIGHWAYSION, CUFFE PARADE, MUMBAI 400022 MUMBAI 400005 PAN : AACR2831H (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI NIRAJ SHETH, AR REVENUE BY: SHRI K. KRISHNA MURTHY, DR DATE OF HEARING : 07/1 2/2016 DATE OF PRONOUNCEMENT: 16/01/2017 ORDER PER N.K. PRADHAN, AM THIS IS AN APPEAL FILED BY THE ASSESSEE. THE RELEVA NT ASSESSMENT YEAR IS 2009-10. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE HCOMMISSIONER OF INCOME TAX (CIT)-(LTU), MUMBAI U/S 263 OF THE INCOME TAX ACT 1961, (THE ACT). 2. THE SOLE GROUND RAISED BY THE ASSESSEE IN THIS A PPEAL IS THAT THE CIT HAS ERRED IN HOLDING THE ASSESSMENT ORDER DATED 10.10.2011 PASSED BY THE AO WAS ERRONEOUS AND PREJUDICIAL TO T HE INTEREST OF REVENUE AND IN PASSING AN ORDER U/S 263 OF THE ACT IN RESPECT OF THE SAME. WITHOUT PREJUDICE TO THE ABOVE, IT IS STATED THAT THE CIT HAS ERRED IN DIRECTING THE AO TO DISALLOW THE BALANCE 5 0% OF THE ADDITIONAL DEPRECIATION OF RS. 1,47,67,610/- CLAIME D U/S 32(1)(IIA) IN RESPECT OF NEW ASSETS PUT TO USE IN THE 2 ND HALF OF THE FINANCIAL YEAR 2007-08. IT IS SUBMITTED THAT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE LAW PREVALENT ON THE SUBJECT, T HE ALLOWANCE OF ADDITIONAL DEPRECIATION IS CORRECT AND VALID IN LAW . ITA NO. 3478/MUM/2014 2 3. THE CIT, AFTER VERIFICATION OF THE CASE RECORDS, NOTICED THAT THE ASSESSEE HAD CLAIMED AND WAS ALLOWED AN ADDITIONAL DEPRECIATION @10% OF AN AMOUNT OF RS. 1,47,67,610/-. THIS ADDITI ONAL DEPRECIATION WAS CLAIMED AND ALLOWED ON NEW PLANT A ND MACHINERY WHICH WAS ACQUIRED AND PUT TO USE IN THE PREVIOUS Y EAR RELEVANT TO THE A.Y. 2008-09. BUT THESE WERE PUT TO USE FOR LES S THAN 180 DAYS IN A.Y. 2008-09 AND THEREFORE ADDITIONAL DEPRECIATION OF ONLY 10% WAS CLAIMED IN THAT YEAR. THE CIT OBSERVED THAT THERE I S NO PROVISION IN THE ACT TO CLAIM THE BALANCE OF THE ADDITIONAL DEPR ECIATION IN THE SUCCEEDING YEAR. THEREFORE THE CIT CAME TO A FINDIN G THAT THE ADDITIONAL DEPRECIATION CLAIMED BY THE ASSESSEE AND ALLOWED BY THE AO IN THE A.Y. 2009-10 WAS ERRONEOUSLY GRANTED. IN RESPONSE TO A QUERY RAISED BY THE CIT, THE ASSESSEE FILED A WRITT EN SUBMISSION WHICH HAS BEEN EXTRACTED AT PAGE 2 5 OF THE ORDER DATED 26.03.2014 PASSED BY THE CIT. IT IS FOUND THAT THE CIT WAS NOT CONVIN CED WITH THE EXPLANATION GIVEN BY THE ASSESSEE. THEREFORE, HE SE T ASIDE THE ORDER OF THE AO AND DIRECTED HIM TO DISALLOW THE CLAIM ADDIT IONAL DEPRECIATION OF RS. 1,47,67,610/- IN THE IMPUGNED ASSESSMENT YEA R. 4. THE LEARNED AR RELIED ON THE JUDGEMENT OF THE HO N'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. RITTAL INDIA PVT. LTD. (2016) 66 TAXMANN.COM 4 (KARNATAKA) AND THE ORDER OF THE C O-ORDINATE BENCH IN THE CASE OF THE ASSESSEE FOR THE A.Y. 2010 -11 (ITA NO. 5160/MUM/2014). 5. THE LEARNED DR SUPPORTED THE ORDER OF THE CIT. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT IN THE CASE OF RIT TAL INDIA PVT. LTD. (SUPRA), THE HON'BLE KARNATAKA HIGH COURT HELD AS U NDER: IF PLANT AND MACHINERY ELIGIBLE FOR ADDITIONAL DE PRECIATION UNDER SECTION 32(1)(IIA) IS PUT TO USE FOR LESS THAN 180 DAYS IN SAID FINANCIAL YEAR AND, THEREFORE, ONLY 50 PER CENT OF ADDITIONAL DEPRECIATION CAN BE CLAIMED IN THAT YEAR, BALANCE 50 PER CENT CAN BE AVAILED IN SUBSEQUENT YEAR. 6.1 THE CO-ORDINATE BENCH IN THE CASE OF THE ASSESS EE FOR THE A.Y. 2010-11 HAS FOLLOWED THE ABOVE JUDGEMENT AND QUASHE D THE ORDER U/S 263 PASSED BY THE CIT. 7. RESPECTFULLY FOLLOWING THE JUDGEMENT OF THE HON' BLE KARNATAKA HIGH COURT AS NARRATED AT PARA 6 AND THE ORDER OF T HE CO-ORDINATE BENCH THEREAFTER, WE SET ASIDE THE ORDER U/S 263 PA SSED BY THE CIT AND RESTORE THE ORDER OF THE A.O. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ITA NO. 3478/MUM/2014 3 ORDER PRONOUNCED IN THE OPEN COURT ON 16/01/2017 SD/- SD/- (SAKTIJIT DEY) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBE R MUMBAI; DATED: 16/01/2017 BISWAJIT, SR. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI