M/s Hindustan Equipment Pvt. Ltd., Indore V. THE ACIT 5(1), Indore

ITA 394/IND/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7486 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 29-05-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R P MOURYA
• Assessee Lawyers: S S SOLANKI
• Keywords: Depreciation; Opportunity of being heard; Additional depreciation
• Section: 143(3); 142(1)

Judgement Text

HINDUSTAN EQUIPMENTS PVT. LTD ITA NO.394/IND/2017 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HONBLE KUL BHARAT, JUDICIAL MEMBER AND HONBLE MANISH BORAD, ACCOUNTANT MEMBER ITA NO.394/IND/2017 ASSESSMENT YEAR 2011-12 REVENUE BY S HRI R.P. MOURYA, SR.DR ASSESSEE BY SHRI S .S. SOLANKI , C . A DATE OF HEARING 1 8 .1 2 . 2018 DATE OF PRONOUNCEMENT 10 . 01.2019 O R D E R PER MANISH BORAD, AM. THE ABOVE CAPTIONED APPEAL FILED AT THE INSTANCE OF ASSESSEE PERTAINING TO ASSESSMENT YEAR 2011-12 IS DIRECTED A GAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX (APPEALS)- I (IN SHORT LD.CIT(A)], INDORE DATED 08.03.2017 WHICH ARE AR ISING OUT OF THE ORDER U/S. 143(3) OF THE INCOME TAX ACT 1961(IN SH ORT THE ACT) DATED 30.03.2014 FRAMED BY ACIT-5(1), INDORE. M /S. HINDUSTAN EQUIPMENTS PVT. LTD, C/O S.S. SOLANKI & CO, 402, TRADE HOUSE, 16/3 SOUTH TUKOGANJ, INDORE VS. ACIT - 5(1) , INDORE ( APPELLANT ) (RESPONDENT ) PAN NO.AABCH0707P HINDUSTAN EQUIPMENTS PVT. LTD ITA NO.394/IND/2017 2 2. ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL; 1. THAT THE LEARNED CIT(A) ERRED IN MAINTAINING DI SALLOWANCE OF RS.1,39,47,703/- OUT OF DEPRECIATION MADE BY THE A. O. THAT DEPRECIATION ON CNC DRILL MACHINE CLAIMED @80% IS LEGAL AND PROP ER. THE DISALLOWANCE SO MADE BY THE AO ERRED MAINTAINED BY LEARNED CIT(A) IS ILLEGAL AND WRONG, THE SAME REQUIRE TO BE DELETED 3. BRIEFLY STATED FACTS AS CULLED OUT FROM THE RECO RDS ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN TH E BUSINESS OF MANUFACTURING OF DIES, ROLLER SHELL, MACHINERIES A ND FEED & GRAIN PLANT EQUIPMENT. LOSS OF RS.35,73,286/- DECLARED I N THE E-RETURN OF INCOME FILED ON 29.09.2011 WHICH WAS FURTHER REV ISED ON 22.09.2012. CASE PICKED FOR SCRUTINY AND NECESSARY NOTICES U/S 143(2) AND 142(1) OF THE ACT WERE DULY SERVED UPON THE ASSESSEE. APART FROM THE ADDITIONS FOR UNEXPLAINED CASH CREDI T OF RS.28,00,000/- RECEIVED FROM THREE DIFFERENT PARTIE S WHICH IN THE VIEW OF THE LEARNED ASSESSING OFFICER (IN SHORT LD . A.O) COULD NOT PASS THE TEST OF IDENTITY, GENUINENESS AND CREDITWO RTHINESS, LD. A.O ALSO EXAMINED THE CLAIM OF DEPRECIATION @80% UNDER BLOCK IX ON PURCHASE OF CNC DRILL MACHINE. IT WAS SUBMITTED BY THE ASSESSEE THAT THE HIGHER RATE OF DEPRECIATION @80% HAS BEEN CLAIMED UNDER THE RATES OF ENERGY SAVING DEVICE. IT WAS CLAIMED THAT THE HINDUSTAN EQUIPMENTS PVT. LTD ITA NO.394/IND/2017 3 MACHINES WERE USED TO MANUFACTURE AGRICULTURAL AND MUNICIPAL WASTE CONVERSION DEVICES. HOWEVER IT WAS ACCEPTED THAT THE PELLETING DIES MANUFACTURED BY ASSESSEE DID NOT PRO DUCE ANY ENERGY. THE SUBMISSION OF THE ASSESSEE COULD NOT CO NVINCE THE LD. A.O AND HE THEREFORE DENIED 80% DEPRECIATION CHARGE D BY THE ASSESSEE AND ONLY ALLOWED THE NORMAL RATE OF 15% AN D ADDITIONAL DEPRECIATION @20% ON THE CNC DRILL MACHINE PURCHASE D BY THE ASSESSEE. ACCORDINGLY AS AGAINST THE CLAIM OF DEPRE CIATION BY THE ASSESSEE AT RS. 2,47,95,914/- THE LD. A.O ONLY ALLO WED DEPRECIATION AT RS.1,08,48,211/- THEREBY MAKING THE ADDITION AT RS.1,39,47,703/-. INCOME ASSESSED AT RS.1,31,74,417 /-. AGGRIEVED ASSESSEE FILED APPEAL ONLY AGAINST THE D ISALLOWANCE OF DEPRECIATION AT RS.1,39,47,703/- BUT FAILED TO S UCCEED AS THE IMPUGNED DISALLOWANCE WAS SUSTAINED BY LD.CIT(A) OB SERVING AS FOLLOWS; 5. GROUND NO.1:- THIS GROUND OF THE APPELLANT LS D IRECTED AGAINST THE DISALLOWANCE OF RS.20 146681/ - BEING CLAIM OF DEPR ECIATION AT THE RATE OF 80%) ON CNC DRILL MACHINES DISALLOWED. THE DETAILED FACT S OF THE CASE AS PER THE ASSESSMENT ORDER ARE REPRODUCED AT PARA NO. 2 ABOVE AND THE DETAILED SUBMISSIONS OF THE APPELLANT ARE REPRODUCED AT PARA NO.3 ABOVE. 5.1 THE CRUX OF THE APPELLANT'S ARGUMENT IS THAT AS THE CNC MACHINES HINDUSTAN EQUIPMENTS PVT. LTD ITA NO.394/IND/2017 4 ARE USED FOR THE MANUFACTURE OF PELLET MACHINE DIES AND THE PELLET MACHINES ARE USED FOR THE PRODUCTION OF BIOMASS PEL LETS WHICH ARC A RENEWABLE FORM OF ENERGY THE CNC MACHINES ARE RENEW ABLE ENERGY DEVICES USED IN CONVERSION OF AGRICULTURAL AND MUNI CIPAL WASTE. IN VIEW OF THE ABOVE THEY ARE ELIGIBLE FOR HIGHER DEPRECIAT ION AS PRESCRIBED IN THE DEPRECIATION SCHEDULE UNDER THE HEAD 'RENEWAL ENERG Y DEVICES' LISTED IN CLAUSE 8(XIII) (P) & (R}. THE RELEVANT PART OF THE SCHEDULE IS ALREADY REPRODUCED AT PARA NO.2 ABOVE. 5.2 THE CNC MACHINE IS SIMPLY A MACHINING TOOL WHIC H WORKS ON THE BASIS OF A PREPROGRAMMED COMPUTER. IT IS THUS LIKE A ROBOT DOING THE MACHINING JOB. AS PER WIKIPEDIA IT IS DEFINED AS UN DER: 'COMPUTER NUMERICAL CONTROL (CNC) IS THE AUTOMATION OF MACHINE TOOLS BY MEANS OF COMPUTERS EXECUTING PRE-PROGRAMMED SEQU ENCES OF MACHINE CONTROL COMMANDS. THIS IS IN CONTRAST TO MA CHINES THAT. ARE MANUALLY CONTROLLED BY HAND WHEELS OR LEVERS, OR ME CHANICALLY AUTOMATED BY CAMS ALONE. IN MODEM CNC SYST.EMS, THE DESIGN OF A MECHANICAL P ART AND ITS MANUFACTURING PROGRAM IS HIGHLY AUTOMATED. THE PART 'S MECHANICAL DIMENSIONS ARE DEFINED USING COMPUTER-AIDED DESIGN( CAD) SOFTWARE, AND THEN TRANSLATED INTO MANUFACTURING DIRECTIVES BY CO MPUTER-AIDED MANUFACTURING(CAM) SOFTWARE. THE RESULTING DIRECTIV ES ARE TRANSFORMED (BY 'POST PROCESSOR' SOFTWARE) INTO THE SPECIFIC CO MMANDS NECESSARY FOR A PARTICULAR MACHINE TO PRODUCE THE COMPONENT, AND TH EN LOADED INTO THE CNC MACHINE. SINCE ANY PARTICULAR COMPONENT MIGHT REQUIRE THE US E OF A NUMBER OF DIFFERENT TOOLS DRILLS, SAWS, ETC . - MODEM MACHI NES OFTEN COMBINE MULTIPLE TOOLS INTO A SINGLE CELL. IN OTHER INST ALLATIONS, A NUMBER OF DIFFERENT MACHINES ARE USED WITH AN EXTERNAL CONTRO LLER AND HUMAN OR HINDUSTAN EQUIPMENTS PVT. LTD ITA NO.394/IND/2017 5 ROBOTIC OPERATORS THAT MOVE THE COMPONENT FROM MACH INE TO MACHINE. IN EITHER CASE, THE SERIES OF STEPS NEEDED TO PRODUCE ANY PART IS HIGHLY AUTOMATED AND PRODUCES A PART THAT CLOSELY MATCHES THE ORIGINAL CAD DESIGN 5.3 FROM THE ABOVE DISCUSSION IT IS THUS EVIDENT TH AT THE CNC MACHINE IS A SPECIALISED MACHINING TOOL. IN THE CONTEXT O[ THE APPELLANT IT IS 'USED FOR MANUFACTURING DIES FOR PELLET MACHINES. THESE DIES ARE THEN USED [OR MAKING BIOMASS PELLETS AS EXPLAINED BY THE APPELLAN T. HOWEVER THE LOGIC GIVEN BY THE APPELLANT THAT IT IS A RENEWABLE ENERG Y DEVICE IS STRETCHING THE TERM RENEWABLE ENERGY DEVICE TO SUCH AN EXTENT AS TO MAKE IT POSSIBLE TO INCLUDE ANYTHING AND EVERYTHING UNDER T HE SAID TERM, ADMITTEDLY THE CNC MACHINE IS NOT PRODUCING ANY ENE RGY FAR LESS RENEWABLE ENERGY BY ITSELF. THE ITEM (P) TO WHICH R EFERENCE HA S BEEN MADE BY THE APPELLANT STATES AGRICULTURAL; AND MU NICIPAL WASTE CONVERSION DEVICES PRODUCING ENERGY'. AS DISCUSSED ABOVE THE CNC MACHINE DOES NOT CONVERT AGRICULTURAL WASTE I MUNIC IPAL WASTE AND DOES NOT PRODUCE ENERGY BY CONVERSION OF SUCH WASTE. IT IS THEREFORE OUTSIDE THE PURVIEW OF ITEM (P). 5.4 THE OTHER ARGUMENT TAKEN BY THE APPELLANT IS TH AT IT FALLS UNDER ITEM (R] AS IT MANUFACTURES ITEM AT (P) AND HENCE IS ELI GIBLE. AS HAS ALREADY BEEN DISCUSSED ABOVE THE CNC MACHINE ON WHICH THE C LAIM HAS BEEN MADE DOES NOT CONVERT AGRICULTURAL AND FOR MUNICIPA L WASTE AND HENCE IS NOT SUCH A DEVICE AND IS ALSO NOT A CONVERSION DEVI CE PRODUCING ENERGY. IT PRODUCES A DIE AND THE MANUFACTURE OF THE CNC MA CHINE ALSO CANNOT BE TERMED AS 'AGRICULTURAL AND MUNICIPAL WASTE CONV ERSION DEVICE PRODUCING ENERGY'. LT ALSO DOES NOT MANUFACTURE AN Y OF THE ITEMS LISTED AT 8(XIII) (A) TO (Q). 5.5 THE LOGIC GIVEN BY THE APPELLANT IS THAT AS THE CNC MACHINE IS FOR HINDUSTAN EQUIPMENTS PVT. LTD ITA NO.394/IND/2017 6 PRODUCING DIES USED IN BIOMASS PEL1ETI.ZING MACHINE AND THE PELLETS ARC RENEWABLE ENERGY IT QUALIFIES FOR THE HIGHER DEPREC IATION. THIS LOGIC OF THE APPELLANT IS BY ADOPTING AN INTERPRETATION WHICH IS NOT WARRANTED FROM THE LANGUAGE OF THE PROVISIONS IN THE CASE ORISSA S TATE WAREHOUSING CORPORATION VS CIT 237 ITR 589 (SC) IT HAS BEEN HEL D AS UNDER; 'A FISCAL STATUTE IS TO BE INTERPRETED ON THE BASIS OF THE LANGUAGE USED THEREIN AND NOT DE HORS THE SAME. NO WORDS OUGHT TO BE ADDED AND ONLY THE LANGUAGE USED OUGHT TO BE CONSIDERED SO AS TO A SCERTAIN THE PROPER MEANING AND INTENT OF THE LEGISLATION. THE COURT IS TO ASCRIBE NATURAL AND ORDINARY MEANING TO THE WORDS USED BY THE LEGISLATU RE AND THE COURT OUGHT NOT UNDER ANY CIRCUMSTANCES TO SUBSTITUTE ITS OWN IMPRESSION AND IDEAS IN PLACE OF THE LEGISLATURE INTENT AS IS AVAILABLE FROM A PLAIN READING OF THE STATUTORY PROVISIONS 5.6 WHEN THE WORDS SO USED IN THE SCHEDULE ARC INTE RPRETED THEY DO NOT LEAD TO AN ABSURD RESULT AND ARE IN CONSONANCE WITH THE SCHEME OF HIGHER DEPRECIATION ON RENEWABLE ENERGY DEVICES. TH US THE SOLAR COLLECTORS ARE WORKING ON THE SOLAR POWER OF THE SU N AND CONVERTING THE SAME TO ENERGY. SIMILARLY THE WIND MILLS HARNESS TH E WIND POWER AND CONVERT IT TO ENERGY AND HENCE THE ITEM AT (P) ALSO REFERS TO DEVICES WHICH PRODUCE ENERGY FROM CONVERSION OF AGRICULTURAL AND MUNICIPAL WASTE AND THE CNC MACHINE DOES NOT QUALIFY TO BE LABELLED AS SUCH A DEVICE. IT ALSO DOES NOT PRODUCE SUCH DEVICE AND HENCE DOES NOT FAL L IN THE ITEM (R) ALSO. IN VIEW OF THE ABOVE DISCUSSION IT IS HELD THAT THE CLAIM OF THE APPELLANT HAS BEEN RIGHTLY DISALLOWED BY THE AO AND THE ACTIO N OF THE AO IS UPHELD IN APPEAL. THIS GROUND OF THE APPELLANT IS THEREFOR E DISMISSED. 4. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNA L. HINDUSTAN EQUIPMENTS PVT. LTD ITA NO.394/IND/2017 7 5. LD. COUNSEL FOR THE ASSESSEE MADE FOLLOWING WRIT TEN SUBMISSIONS IN SUPPORT OF ITS CLAIM FOR 80% DEPRECI ATION ON THE PURCHASE OF 4-SPINDLE CNC DRILL MACHINE WHICH ARE M AINLY USED TO MANUFACTURE PELLET MILL DIE DRILLS PELLETING DIES. THAT THE DEVICE HAS BEEN DEFINED AT VARIOUS PLACES, SOME OF WHICH ARE AS UNDER:- (A)GOOGLE:HTTPS://WWW.GOOGLE.CO.INL#Q=DEVICE+DEFINI TION (COPY ENCLOSED) (B) DICTIONARY .CAMBRIDGE. ORG: HTTP://DICTIONARY/ENGLISH/DEVICE (COPY ENCLOSED) (C) DICTIONARY.COM:HTTP://WWW.DICTIONARY.COM/BROWSE /DEVICE?S=T(COPY ENCLOSED) (D)OXFORDDICTIONARIES.COM: HTTP://WWW.OXFORDDICTIONARIES.COM/DEFINITION/ENGLIS H/ DEVICE? = DEVICE+(COPY ENCLOSED) . IT IS VERY CLEAR THAT A DEVICE IS A THING MADE OR A DAPTED FOR A PARTICULAR PURPOSE, ESPECIALLY A PIECE OF MECHANICAL OR ELECTR ONIC EQUIPMENT. IT IS ALSO DEFINED AS 'AN OBJECT OR A MACHINE THAT HAS BE EN INVENTED FOR A PARTICULAR PURPOSE.' AS SUCH THE DEFINITION AND MEA NING OF WORD 'DEVICE DOES COVER A SPECIFIC PART WHICH IN THIS CASE IS A PELLETING DIE. THAT PELLET MILL IS PRODUCING PELLETS WHICH IS A DEVICE CONVERT ING AGRICULTURAL WASTE INTO ENERGY HENCE PELLET MILL IS ENERGY PRODUCING D EVICE COVERED UNDER SUB CLAUSE P. AS CNC MACHINE PRODUCES DIES USED IN PELLET MACHINE, IT COMES UNDER SUB CLAUSE (R) OF CLAUSE (XIII). THERE IS NO DOUBT THAT A PELLETING DIE IS THE DEVICE USED FOR CONVERSION OF AGRICULTURAL WASTE INTO HINDUSTAN EQUIPMENTS PVT. LTD ITA NO.394/IND/2017 8 FUEL PELLETS AND THE MACHINE DOING THIS IS CALLED A S A PELLET MILL OR A PELLET MACHINE AND IN TURN THE WHOLE PLANT. THE ASS ESSEE COMPANY IS MAKING ALL THREE THAT IS THE PELLETING DIES, PELLET MILLS AND PELLET PLANTS. THIS VERY FACT ENTITLES THE ASSESSEE TO NOT ONLY CL AIM 80% DEPRECIATION ON THESE PARTICULAR MACHINES FOR MAKING PELLETING DIES AND PELLET MILLS BUT ON EACH AND EVERY INSTALLATION ON ITS PREMISES. A PELLET DIE IS CONVERTING AGRICULTURAL WASTE INTO PELLET FUEL WHICH IS A FORM OF ENERGY. AS SUCH THERE IS NO DOUBT AND CONFUSION ON THE SAME FALLING IN CLAUSE (XIII) SUB CLAUSE (P) & (R) OF DEPRECIATION CHART. THE MENTION IN POINT (5.3) AND POINT (5.5) OF THE ORDER PASSED BY ASSESSING OFFICE R IS AS SUCH NOT CORRECT. WE ARE PROVIDING LIST AND ALSO COPIES OF THEIR ORDE R. PLEASE ALSO REFER THEIR WEBSITES WHICH CLEARLY MENTION THAT THEY ALL PRODUC E PELLET FUEL (WHICH IS A VERY POPULAR FORM OF ENERGY). S. NO NAME OF THE PARTY OFFICE ADDRESS KEY PERSON MOB.NO. E MAIL WEB SITE 1 FIRST ENERGY PVT. LTD C/O ESTEEM BIO FUEL (P) LTD 4 TH FLOOR, SRIKRISHNA CHAMBERS NEAR SAI CHOWK SUS ROAD, PASHAN PUNE - 411021 MR. SHANTILAL (HO) MR. SAMPATH (PLANT I/C) 07387703456 09591454516 SHANTILAL.JAKITE@ FIRSTENERGY.IN SAMPATH.KUMAR@ FIRSTENERGY. IN WWW. FIRSTENERG Y.IN 2 LIVEGRE EN CLEAN TECH PVT.LTD PLOT NO.2211, UDYOG VIHAR, PHASE-I, GURGAON, HARYANA, INDIA MR. ASHISH GUPTA 09718077465 ASHISH.GUPTA@SAR- GROUP.COM LIVEGREEN BIOENERGY. COM HINDUSTAN EQUIPMENTS PVT. LTD ITA NO.394/IND/2017 9 3 PTC INDIA #2332, KR ROAD 20 TH CROSS, BANA SHANKARI II STAGE, BANGALORE 560070 MR. PRASHAN ATH (CEO) 09844046383 [e-mail] WWW. ACTIVEBFP. COM 4 FEED MILLING TECH B/5, MANGAL MURTI APTT. OPP. NOVINO BATTERY, MAKARPUR A, VADODARA 3900010 (GUJARAT) MR. RAJ MR.JAY PATEL 09824076771 09725503599 09427464434 FEEDMILLINGTECH @ GMAIL.COM WWW. FEEDMILLIN GTECH.COM 5 RAJARAM SOLVEX LTD A-21, MDC INDUSTRIAL AREA, TALWALWA DIST. SANGLI, ISLAMPUR, MAHARASH TRA 415409 (INDIA) TEL.NO.(S) 02342 220195 FAX NO.(S) 02342 MR. SANJEEV PITKE 9326368356 ADMIN@RAJARAM SOLVEX.COM WWW. RAJARAM SOLVEX.CO M HINDUSTAN EQUIPMENTS PVT. LTD ITA NO.394/IND/2017 10 220194 6 RAJDEEP BIOMASS PELLETS PLOT NO.30 WARD 11/ BF, OPP. NAHERU PARK, SHIVNAGAR , GANDHIDH AM- 370201 GUJARAT MR.HARDI K 9904404334 RAJDEEPPELLETS @ GAMIL.COM TO CONCLUDE, THE ASSESSEE STATED THAT THE CONFUSION OF THE AO IS THAT THE ASSESSEE IS CLAIMING DEPRECIATION UNDER CLAUSE (XII I) P WHEREAS THE ASSESSEE IS CLAIMING THE SAME IN CLAUSE (XIII) (R) WHICH HAS BEEN ACCEPTED BY THE AO IN HIS OWN ORDER THAT THIS MACHINE IS USE D FOR PRODUCING PELLETING DIES. PRODUCES BIOFUEL, AGRICULTURAL WAST E PROCESSING PLANTS ALONG WITH ALL MACHINERIES AND THEIR PARTS. DEPART MENT'S CONTENTION IS THAT THE WORD 'DEVICE' MEANS A COMPLETE MACHINE PRO DUCING SOME FORM OF ENERGY. OUR SUBMISSION IS THAT THE WORD DEVICE M EANS 'A THING MADE OR ADAPTED FOR A PARTICULAR PURPOSE, ESPECIALLY A P IECE OF MECHANICAL OR ELECTRONIC EQUIPMENT 'SUBSTANTIATED BY ITS MEANING ON GOOGLE AND VARIOUS PROMINENT DICTIONARIES. OUR SUBMISSION IS T HAT WE ARE MAKING THE PARTS, THE MACHINES AND THE PLANTS AS WELL. AS SUCH, DISALLOWING ONLY ON THE GROUND OF COMMON INTERPRETATION OF A WORD AL SO DOES NOT ARISE. THAT THE INTENTION OF LEGISLATURE FOR GIVING INCENT IVE IN THE FORM OF HIGHER RATE OF DEPRECIATION IS TO PROMOTE THE MANUFACTURE OF RENEWABLE ENERGY SAVING DEVICES AND TO PROTECT ENVIRONMENT AS WELL. THE AO, BY DISALLOWING THE CLAIM BY TAKING A VERY NARROW APPRO ACH IS FRUSTRATING THE BASIC OBJECT OF THE LEGISLATURE. AS THE ASSESSEE IS PRODUCING DIES USED IN PELLET MILLS WHICH PRODUCES PELLETS I.E. ENERGY FUE L, IT IS ENTITLED TO HINDUSTAN EQUIPMENTS PVT. LTD ITA NO.394/IND/2017 11 DEPRECIATION @ 80% AS GIVEN IN CLAUSE (XIII) P & R. THE DISALLOWANCE OF DEPRECIATION SO MADE BY AO ON THE BASIS OF WRONG FI NDINGS IS ILLEGAL AND WRONG. THE SAME, THEREFORE, REQUIRE TO BE DELETED. 6. LD. COUNSEL FOR THE ASSESSEE FURTHER MADE A STR ONG SUBMISSION THAT THE DETAILS OF MACHINE MANUFACTURED BY THE ASSESSEE AND ITS DIRECT LINK WITH THE MACHINES USED TO MAKE RENEWABLE ENERGY DEVICE WHICH CONVERTS AGRICULTURAL AND MUNICIPAL WASTE INTO ENERGY HAS NOT BEEN EXAMINED BY THE LD.A .O IN THE RIGHT PERSPECTIVE AND THUS REQUESTED FOR ONE MORE OPPORTU NITY TO GO BEFORE THE LD.A.O TO PRESENT THE FACTS OF THE CASE. 7. PER CONTRA DEPARTMENTAL REPRESENTATIVE THOUGH VE HEMENTLY ARGUED SUPPORTING THE ORDERS OF BOTH THE LOWER AUTH ORITIES BUT RAISED NO OBJECTION TO THE PLEA OF THE LD. COUNSEL FOR THE ASSESSEE OF SETTING ASIDE THE ISSUES RAISED IN THIS APPEAL TO T HE FILE OF THE ASSESSING OFFICER FOR AFRESH EXAMINATION. 8. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. THE SOLE GRIEVANCE OF THE ASSESS EE IS AGAINST THE ORDER OF LD. CIT(A) CONFIRMING THE DISALLOWANCE OF DEPRECIATION AT RS.1,39,47,703/- CLAIMED BY THE ASSESSEE @80% ON TH E PURCHASE OF HINDUSTAN EQUIPMENTS PVT. LTD ITA NO.394/IND/2017 12 CNC DRILL MACHINE BUT ALLOWED BY THE LD.A.O AT 15% COUPLED WITH 20% ADDITIONAL DEPRECIATION. 9. IT HAS BEEN CONTENDED BY THE ASSESSEE BEFORE TH E LOWER AUTHORITIES THAT THE DEPRECIATION @80% HAS NOT BEEN MADE FOR THE PURCHASE OF ENERGY SAVING DEVICE BUT IT HAS BEEN CL AIMED FOR THE PURCHASE OF MACHINERIES AND PLANTS I.E. CNC DRILLIN G MACHINE WHICH ARE USED FOR MANUFACTURING OF PELLET MILL DIE DRILL S PELLETTING DIES WHICH ARE FURTHER USED IN MANUFACTURING AGRICULTURA L AND MUNICIPAL WASTE CONVERSION DEVICE. 10. AFTER THOROUGHLY EXAMINING THE ASSESSMENT ORDER , FINDING OF LD.CIT(A), AND THE DETAILED SUBMISSION OF THE LD. C OUNSEL FOR THE ASSESSEE MADE BEFORE THE LOWER AUTHORITIES AS WELL AS BEFORE US. WE ARE OF THE VIEW THAT THE ISSUE NEEDS RE-EXAMINATION AS TO WHETHER THE IMPUGNED ASSETS PURCHASED BY THE ASSESSEE I.E. CNC DRILLING MACHINE IS ELIGIBLE FOR DEPRECIATION UNDER WHICH OF THE CATEGORY OF ASSETS; (A) BEING A MACHINE IN THE NATURE OF AGRICULTURAL A ND MUNICIPAL WASTE CONVERSION DEVICE. (B) BEING A MACHINE USED TO MANUFACTURE MACHINES IN THE FORM OF AGRICULTURAL AND MUNICIPAL WASTE CONVERSION DEVICE. HINDUSTAN EQUIPMENTS PVT. LTD ITA NO.394/IND/2017 13 (C) THE MACHINE ELIGIBLE FOR 15% DEPRECIATION ALONG WITH 20% ADDITIONAL DEPRECIATION. 11. LD. COUNSEL FOR THE ASSESSEE HAS PLACED VARIOUS DOCUMENTS AND MATERIALS ON RECORD IN SUPPORT OF ITS CLAIM FOR 80% DEPRECIATION ON THE COST OF CNC DRILLING MACHINE BY SUBMITTING T HAT THE CNC DRILLING MACHINE ARE USED TO MANUFACTURE PELLET MIL L DIE DRILLS PELLETTING DIES WHICH ARE FURTHER USED FOR MANUFACT URING AGRICULTURAL AND MUNICIPAL WASTE CONVERSION DEVICE. HOWEVER IT IS NOT TRANSCRIBING FROM THE RECORDS WHETHER THE CLAIM OF THE ASSESSEE IS FOR THE ASSETS COMING UNDER CLAUSE (XIII)(P) OR CLAUSE (XIII) (R) OF THE DEPRECIATION CHART WHICH REFERS TO AGRICULTURAL AND MUNICIPAL WASTE CONVERSION DEVICE PRODUCING ENERGY CLAUSE (X III) (P) OR MACHINERY AND PLANT USED IN THE MANUFACTURING OF AG RICULTURAL AND MUNICIPAL WASTE CONVERSION DEVICE CLAUSE (XIII) (R) OF THE DEPRECIATION CHART. SINCE THE ISSUE DISCUSSED ABOV E ABOUT THE CHARGEABILITY OF DEPRECIATION ON THE COST PRICE OF CNC DRILLING MACHINES GOES TO THE ROOT CAUSE OF THE GROUND RAISE D BEFORE US, THE SAME NEEDS TO BE EXAMINED AFRESH BY THE LD. A.O IN THE LIGHT OF THE DISCUSSIONS MADE HEREIN ABOVE. HINDUSTAN EQUIPMENTS PVT. LTD ITA NO.394/IND/2017 14 12. WE THEREFORE IN THE GIVEN FACTS AND CIRCUMSTANC ES OF THE CASE AS WELL AS THE ACCEPTANCE OF BOTH THE PARTIES, SET ASIDE THE ISSUES RAISED BEFORE US TO THE FILE OF THE LD.A.O FOR DENOVO ADJUDICATION AND HEREBY DIRECT THE ASSESSING OFFICER TO EXAMINE THE CLAIM OF DEPRECIATION ON CNC DRILL MACHINE IN THE LIGHT OF V ARIOUS DOCUMENTS, MATERIAL EVIDENCE AND OTHER DETAILS TO B E FURNISHED BY THE ASSESSEE IN SUPPORT OF ITS CLAIM THAT CNC DRILL MACHINES ARE ELIGIBLE FOR 80% DEPRECIATION. NEEDLESS TO MENTION THAT REASONABLE OPPORTUNITY OF BEING HEARD SHOULD BE PROVIDED TO TH E ASSESSEE. 13. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSE. THE ORDER PRONOUNCED IN THE OPEN COURT ON 10. 01.2019. SD/- SD/- ( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 10 JANUARY, 2019 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE