M/s. Neel Metal Products Ltd., New Delhi V. ACIT, New Delhi

ITA 3960/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65300 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 18-05-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 30-08-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R S NEGI SENIOR
• Assessee Lawyers: R SANTHAN AM
• Keywords: Depreciation; Earning of tax free income; Retrospective amendment
• Section: 14A

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMEBR AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.1368/DEL./2011 (ASSESSMENT YEAR : 2007-08) M/S. NEEL METAL PRODUCTS LTD., VS. ADDL. CIT, RANG E 13, 601, HEMKUNT CHAMBER, NEW DELHI. NEHRU PLACE, NEW DELHI 110 018. (PAN : AABCN6304Q) ITA NO.3960/DEL./2011 (ASSESSMENT YEAR : 2008-09) M/S. NEEL METAL PRODUCTS LTD., VS. ACIT, 601, HEMKUNT CHAMBER, COMPANY CIRCLE 13(1), NEHRU PLACE, NEW DELHI. NEW DELHI 110 018. (PAN : AABCN6304Q) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R. SANTHANAM, ADVOCATE REVENUE BY : SHRI R.S. NEGI, SENIOR DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER THESE APPEALS FILED BY THE ASSESSEE EMANATE FROM T HE ORDERS OF THE CIT (APPEALS)-XVI, NEW DELHI DATED 26.11.2010 FOR T HE ASSESSMENT YEAR 2007-08 AND DATED 30.03.2011 FOR THE ASSESSMEN T YEAR 2008-09. ITA NOS.1368 & 3960/DEL/2011 2 SOME OF THE GROUNDS OF APPEAL ARE COMMON HENCE, BOT H THE APPEALS ARE DISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF C ONVENIENCE. 2. THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINES S OF MANUFACTURE OF STEEL METAL COMPONENTS ASSEMBLIES AND SUB-ASSEMB LIES PRIMARILY FOR THE AUTOMOBILES AND WHITE GOODS SECTOR. 3. THE GROUNDS OF APPEAL IN ITA NO.1368/DEL/2011 FO R THE ASSESSMENT YEAR 2007-08 READ AS UNDER :- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), CIT(A) IS BAD, BOTH IN THE EYES OF L AW AND ON FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED, BOTH ON THE FACTS AND IN LAW, IN CONFIRMING THE ACTION OF THE AO TO THE EXTENT OF DISALLOWING RS.40,00,000/- U/S 14A OF THE INCOME TA X ACT HOLDING IT AS EXPENSES IN RELATION TO EARNING TO IN COME WHICH DOES NOT FORM PART OF THE TOTAL INCOME. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN CONFIRMING THE ACTION OF THE AO IN DISALLOWING DEPRECIATION OF RS.27,12,770/- ON ACCOUNT OF CIVIL CONSTRUCTION TOWARDS ETP/STP PLANT CONSIDERING OF N OT AS AN INTEGRAL PART. THE LEARNED CIT(A) DID NOT PRO VIDE AN OPPORTUNITY TO PROVE THAT THE CIVIL CONSTRUCTION IN ETP/STP WAS AN INTEGRAL PART OF THE PLANT. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN CONFIRMING THE ACTION OF THE AO IN DISALLOWING DEPRECIATION OF RS.51,74,135/- ON ACCOUNT OF ELECTR IC INSTALLATION CONSIDERING IT NOT AN INTEGRAL PART OF PLANT & MACHINERY. ITA NOS.1368 & 3960/DEL/2011 3 5. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY OF THE GROUNDS OF APPEAL. 4. GROUND NOS.1 & 5 ARE GENERAL IN NATURE AND DOES NOT REQUIRE ANY ADJUDICATION, HENCE DISMISSED. 5. IN THE GROUND NO.2, THE ISSUE INVOLVED IS SUSTAI NING THE ADDITION OF RS.40,00,000/- U/S 14A OF THE INCOME-TAX ACT, 1961 BY HOLDING IT AS EXPENSES INCURRED IN RELATION TO THE INCOME WHICH D OES NOT FORM PART OF THE TOTAL INCOME. GROUND NO.1 IN ITA NO.3960/DEL/2 011 FOR ASSESSMENT YEAR 2008-09 IS ALSO AGAINST CONFIRMING THE ADDITIO N OF RS.60,16,000/- U/S 14A OF THE ACT. 6. THE CIT (A) HAS CONFIRMED THE ADDITION BY HOLDIN G AS UNDER WHICH IS UNDER CHALLENGED IN ITA NO.1368/DEL/2011:- 2.2 I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE AUTHORIZED REPRESENTATIVE OF THE APPELLANT COMPANY AS WELL AS THE DISCUSSION IN THE ASSESSMENT ORDER. I AM IN AGREEMENT WITH THE ASSESSING OFFICER THAT REGARDLES S OF WHETHER EXEMPTED INCOME HAS BEEN RECEIVED DURING TH E YEAR OR NOT, THE EXPENSES INCURRED IN RELATION TO T HE EARNING OF EXEMPT INCOME HAVE TO BE DISALLOWED. TH IS VIEW GETS SUPPORT FROM THE JUDGEMENT OF HON'BLE DEL HI ITAT, SPECIAL BENCH IN THE CASE OF M/S. CHEMINVEST LTD. VS. ITO, ITA NO.87/DEL/2008. THE APPELLANT HAS SUBMITTED THAT THE FACTS OF THE AFOREMENTIONED CASE WERE DIFFERENT FROM THOSE OF THE APPELLANT'S CASE BECAUS E THE APPELLANT IS ENGAGED IN THE BUSINESS OF MANUFACTURE OF SHEET METAL COMPONENTS OF AUTOMOBILES AND HAD ENTER ED INTO A JOINT VENTURE NOT FOR THE PURPOSE OF EARNING DIVIDEND OR CAPITAL GAIN, WHEREAS IN THE CASE OF M/ S. CHEMINVEST LTD., THE ASSESSEE WAS IN THE BUSINESS O F INVESTMENTS IN SHARES. HERE IT IS WORTH NOTING THAT IN THE CASE OF M/S DAGA CAPITAL MANAGEMENT [2009] 117 ITD 169 (MUM.)(SB) IT WAS HELD THAT IT IS IMMATERIAL ITA NOS.1368 & 3960/DEL/2011 4 WHETHER THE ASSESSEE IS IN THE BUSINESS OF DEALING IN SHARES OR NOT FOR THE PURPOSE OF MAKING DISALLOWING U/S 14A BECAUSE THE SECTION DOES NOT MAKE ANY SUCH DISTINCTION AND ANY EXPENDITURE INCURRED IN RELATIO N TO EARNING OF EXEMPT INCOME HAS TO BE DISA1LOWED. THE APPELLANT HAS RELIED UPON THE CASE OF CIT VS. WALFO RT SHARES & STOCK BROKERS PVT. LTD. (2009) 310 ITR 421 (BOM). HOWEVER, IN THAT CASE, THE ISSUE WAS THE ALLOWABILITY OF LOSS ON SALE OF SHARES AGAINST DIVI DEND INCOME AND NOT ALLOWABILLTY OF EXPENSES EARNED FOR EARNING DIVIDEND OR ANY OTHER EXEMPT INCOME. SIMILA RLY, THE FACTS OF CIT VS. SHOORJI VALLABHDAS CO. (1962) 46 ITR 144 AND STATE BANK OF TRAVANCORE VS. CIT (1986) 158 ITR 102 (SC) WERE DIFFERENT FROM THOSE OF THE APPELLANT'S CASE BECAUSE IN THOSE CASES, THE COURTS HELD THAT WHERE NO INCOME HAS ACCRUED OR ARISEN TO THE ASSESSEE, THERE CANNOT BE ANY TAX. IN THESE CASES, THE ISSUE REGARDING EXPENSES INCURRED FOR EARNING OF EXEMPT INCOME WAS NOT DEALT WITH. ALTHOUGH THE HON'BLE HIGH COURT OF BOMBAY IN THE CA SE OF GODREJ AND BOYCE HAVE HELD THAT RULE 8D IS NOT APPLICABLE WITH RETROSPECTIVE EFFECT I.E. PRIOR TO ASSESSMENT YEAR 2008-09, THEY HAVE OBSERVED THAT TH E ASSESSING OFFICER HAS TO ENFORCE THE PROVISIONS OF SECTION 14A(1). FOR THAT PURPOSE THE ASSESSING OFFICER IS D UTY BOUND TO DETERMINE THE EXPENDITURE WHICH HAS BEEN INCURRED IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME. IT IS SEEN FROM THE BALANCE-SH EET OF THE APPELLANT THAT DURING THE YEAR IT HAS MADE LONG TERM INVESTMENTS OF ABOUT RS.12 CRORES. THE DECISION REGARDING WHERE AND WHEN TO INVEST MUST HAVE TAKEN THE TIME AND EFFORT OF THE MANAGEMENT. MOREOVER, PART OF OTHER EXPENSES LIKE PRINTING AND STATIONERY, CONVEY ANCE AND TRAVELLING, POSTAGE, TELEPHONE ETC. CAN BE SAID TO BE ATTRIBUTABLE TO THE MAKING OF THESE INVESTMENTS. I , THEREFORE, ESTIMATE THE EXPENDITURE INCURRED BY THE APPELLANT COMPANY DURING THE YEAR FOR ENTERING INTO THE JOINT VENTURES AT RS.40 LACS. THE APPELLANT GETS A RELIEF OF RS.7,30,000/-. THIS GROUND OF APPEAL IS PARTLY ALLO WED. ITA NOS.1368 & 3960/DEL/2011 5 IN THE YEAR 2008-09, CIT (A) CONFIRMED THE DISALLOW ANCE RELYING ON HIS DECISION FOR ASSESSMENT YEAR 2007-08 AND ALSO HOLDI NG AS UNDER :- THE FACTS OF THE CASE REMAIN SIMILAR THIS YEAR EXC EPT THAT RULE 8D FOR ESTIMATION OF DISALLOWANCE IS APPLICABL E THIS YEAR. IN FACT THE INVESTMENTS OF THE APPELLANT, IN COME FROM WHICH DOES NOT OR SHALL NOT FORM PART OF TOTAL INCOME, INCREASED FROM RS.12 CRORES AS ON 31.03.200 7 TO RS.41.55 CRORES AS ON 31.03.2008, WHICH AS DISCUSSE D BY THE A.O., MUST HAVE REQUIRED THE DEPLOYMENT OF FUND S AS WELL AS TIME AND EXPERTISE OF THE MANAGEMENT. THEREFORE, IN THE ABSENCE OF ANY OTHER ESTIMATE PRO VIDED BY THE APPELLANT, THE DISALLOWANCE WORKED OUT BY TH E A.O. TO THE TUNE OF RS.60.16 LACS U/S 14A READ WITH RULE 8D IS HEREBY UPHELD. THIS GROUND OF APPEAL IS DISMISSED. 7. WE HAVE HEARD BOTH THE SIDES ON THIS ISSUE AND B OTH THE SIDES HAVE AGREED THAT THE ISSUE MAY BE RESTORED TO THE FILE O F THE ASSESSING OFFICER TO BE DECIDED IN VIEW OF THE LATEST JUDGMENT OF HON 'BLE DELHI HIGH COURT PARTICULARLY IN THE CASE OF MAXOPP INVESTMENTS LTD. & ORS. VS. CIT REPORTED IN 2011-TIOL-753-HIGH COURT-DEL-IT. CONSI DERING THE PLEADINGS OF BOTH THE SIDES, WE RESTORE THE ISSUE T O THE FILE OF THE ASSESSING OFFICER IN BOTH THE APPEALS TO BE DECIDED DE NOVO IN VIEW OF THE AFORESAID JUDGMENT OF HON'BLE JURISDICTIONAL HI GH COURT. THE GROUNDS RELATED TO DISALLOWANCES U/S 14A IN BOTH TH E ASSESSMENT YEARS ARE ALLOWED FOR STATISTICAL PURPOSES. 8. IN GROUND NO.3, THE ISSUE INVOLVED IS CONFIRMING THE DISALLOWANCE OF DEPRECIATION OF RS.27,12,770/- ON ACCOUNT OF CIV IL CONSTRUCTION TOWARDS ETP (EFFLUENT TREATMENT PLAN) / STP (SEWAGE TREATME NT PLAN). THE ITA NOS.1368 & 3960/DEL/2011 6 CONTROVERSY IN THIS ISSUE INVOLVED IS NOT ALLOWING THE 100% DEPRECIATION ON THE CIVIL STRUCTURE WHICH CLAIMED TO BE INTEGRAL PART OF THE ETP / STP. THE CIT (A) HAS CONFIRMED THE ADDITION BY HOLDING A S UNDER :- 3.2 I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE AUTHORIZED REPRESENTATIVE OF THE APPELLANT COMPANY AS WELL AS THE DISCUSSION IN THE ASSESSMENT ORDER. TH E APPELLANT HAS PLACED RELIANCE ON ACCOUNTING STANDAR D 10 TO CLAIM THAT THE COST OF UNDERGROUND CIVIL STRUCTU RE WAS PART OF ETP/STP PLANT ENTITLED TO 100% DEPRECIATION . HOWEVER, AS DISCUSSED IN THE ASSESSMENT ORDER, FOR DEPRECIATION PURPOSES, THE APPELLANT HAS TO CLAIM DEPRECIATION AS PER THE INCOME-TAX ACT AND RULES AN D AS PER APPENDIX 1 TO THE INCOME-TAX RULES, 1962, DEPRECIATION ON SOLID WASTE CONTROL EQUIPMENTS AND. SOLID WASTE RECYCLING AND RESOURCE, RECOVERY SYSTEMS IS T O BE ALLOWED AT 100% OF THE WDV WHILE OTHER PLANT AND MACHINERY QUALIFIES FOR DEPRECIATION AT 15%. THE APPELLANT HAS RELIED UPON THE CASES OF CIT VS. TAJM AHAL HOTEL (1971) 82 ITRR 44 (SC); ADDL. CIT VS. MADRAS CEMENT LTD. 110 ITR 281 (MAD) AND R.C. CHEMICALS INDUSTRIES VS. CIT (1982) 134 ITR 330 (DEL). THE BR OAD FINDINGS IN ALL THESE CASES IS THAT WHETHER A FIXED ASSET IS TO BE CONSIDERED AS 'PLANT AND MACHINERY' AND ALLOW ED DEPRECIATION ACCORDINGLY WOULD HAVE TO BE DECIDED I N THE CONTEXT OF THE BUSINESS BEING CARRIED ON BY THE ASS ESSEE. IT WOULD HAVE TO BE SEEN WHETHER THE ASSET CONSTITU TES AN INTEGRAL PART OF THE PLANT. THE APPELLANT HAS NOT BEEN ABLE TO PROVE THAT THE CIVIL STRUCTURES ON WHICH IT HAS CLAIMED DEPRECIATION AT 100% WERE AN INTEGRAL PART OF THE ETP/STP I.E. THEY CONSTITUTED 'THE MEANS' FOR CARRY ING OUT THE EFFLUENT / SEWAGE TREATMENT PROCESS. ACCOR DINGLY, I UPHOLD THE ACTION OF THE ASSESSING OFFICER IN ALL OWING DEPRECIATION ON THE SAME @ 15%. THIS GROUND OF APP EAL IS DISMISSED. 9. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. WE H AVE ALSO PERUSED THE PAPER BOOK IN WHICH SOME PHOTOS AND PROCESS CHA RT OF SITE ARE SUBMITTED. THESE PHOTOS ARE NOT OF ANY QUALITY. T HE CHART IS ALSO NOT ITA NOS.1368 & 3960/DEL/2011 7 SUFFICIENT TO KNOW THE ACTUAL CIVIL CONSTRUCTION. BOTH SIDES ARE OF THE VIEW THAT ASSESSING OFFICER MAY BE DIRECTED TO INSP ECT THE SITE AND DECIDE THE NATURE OF CIVIL CONSTRUCTION. IN THE INTEREST OF JUSTICE AND EQUITY, WE FIND IT APPROPRIATE TO ACCEPT THE PLEA AND RESTORE THIS ISSUE TO THE FILE OF ASSESSING OFFICER. ASSESSING OFFICER MAY MAKE A SI TE INSPECTION TO KNOW THE REAL CHARACTER OF THE CIVIL CONSTRUCTION WHETHE R IT IS AN INTEGRAL PART OF THE ETP / STP OR NOT. ASSESSING OFFICER SHALL DECI DE AFRESH. THIS GROUND OF ASSESSEES APPEAL IS ALLOWED FOR STATISTI CAL PURPOSES. 10. IN THE GROUND NO.4, THE ISSUE INVOLVED IS CONFI RMING THE ADDITION OF DISALLOWANCE OF DEPRECIATION OF RS.51,74,135/- ON A CCOUNT OF ELECTRIC INSTALLATION. THE GROUND NO.2 IN THE ITA NO.3960/D EL/2011 ALSO IS ALSO RELATED TO DISALLOWANCE OF DEPRECIATION ON ELECTRIC INSTALLATION OF RS.22,57,685/-. THE CIT (A) HAS CONFIRMED THE DISA LLOWANCE BY HOLDING AS UNDER WHICH IS IN CHALLENGE BEFORE US IN ITA NO. 1368/DEL/2011 :- 4.2 I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE AUTHORIZED REPRESENTATIVE OF THE APPELLANT COMPANY. DURING THE COURSE OF ASSESSMENT AS WELL AS APPELLAT E PROCEEDINGS, THE LEARNED AR OF THE APPELLANT PRODUC ED A LIST OF ELECTRICAL INSTALLATIONS WHICH, ACCORDING T O THE AR, WERE USED AS ACCESSORIES OR FOR RUNNING PARTICULAR MACHINERY. IT HAS BEEN DISCUSSED IN PARA 5.6 OF THE ASSESSMENT ORDER AND ALSO OBSERVED BY ME THAT THIS LIST MOSTLY INCLUDES CABLES, ELECTRICAL CONTROL PANELS, COST OF ELECTRICAL INSTALLATIONS WORK, ETC. ONLY 3 ITEMS G IVEN IN THIS LIST CAN BE TAKEN TO BE PART OF MACHINERY WHIL E THE REST HAVE BEEN RIGHTLY CATEGORIZED AS ELECTRICAL FI TTINGS BY THE ASSESSING OFFICER IN VIEW OF NOTE-5 TO APPENDIX 1 OF THE INCOME-TAX RULES, 1962. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE LEARNED AR OF THE APPELL ANT ITA NOS.1368 & 3960/DEL/2011 8 COMPANY RELIED UPON VARIOUS CASE LAWS TO SUPPORT TH E CLAIM OF DEPRECIATION @ 15% ON THESE ITEMS, CLASSIF IED AS 'PLANT & MACHINERY' BY THE APPELLANT BUT AS ELECTRI C FITTINGS BY THE ASSESSING OFFICER. THESE CASE LAWS DIFFER FROM THE FACTS OF THE APPELLANT'S CASE. FOR EXAMPLE , IN THE CASE OF CIT VS. MAHANAGAR TELEPHONE LTD., IT WAS HE LD BY THE HON'BLE COURT THAT SINCE THE BUSINESS OF THE ASSESSEE WAS TO PROVIDE COMMUNICATION NETWORK IN CI TIES, UNDERGROUND CABLES USED BY IT CONSTITUTED 'PLANT & MACHINERY OF THE ASSESSEE. SIMILARLY, IN THE CASE OF SIEMENS INDIA LTD. VS. CIT, A COMPANY ENGAGED IN MANUFACTURE OF EQUIPMENT FOR GENERATION AND TRANSMISSION OF ELECTRICITY AND OTHER ELECTRICAL GO ODS, WORK DONE IN SETTING UP OF ELECTROPLATING SHOP WAS HELD TO BE PART OF PLANT AND MACHINERY OF THE APPELLANT. IT MAY BE NOTED THAT THESE COMPANIES WERE ENGAGED IN THE BUSINESS OF PROVIDING COMMUNICATION NETWORK AND MANUFACTURING OF EQUIPMENT FOR GENERATION AND TRANSMISSION OF ELECTRICITY AND IT WAS IN THE CONTE XT OF THE BUSINESS THAT THEY ARE CARRYING OUT, THAT CABLES, E TC. WERE HELD TO BE PART OF THEIR PLANT. THE APPELLANT, HOW EVER, WAS CARRYING ON THE BUSINESS OF MANUFACTURE AND SAL E OF SHEET METAL COMPONENTS FOR AUTOMOBILES AND WHITE GO ODS SECTOR AND THE ASSESSING OFFICER RIGHTLY ALLOWED TH E DEPRECIATION ON ELECTRICAL ITEMS @ 10%, HOLDING THE M TO BE PART OF ELECTRICAL FITTINGS AS, THESE ITEMS DID NOT CONSTITUTE AN INTEGRAL PART OF PLANT AND MACHINERY OF THE APPELLANT. THIS GROUND OF APPEAL IS ACCORDINGLY DISMISSED. 10. LD. AR SUBMITTED BEFORE US THAT THERE IS DIFFER ENCE BETWEEN THE ELECTRICAL INSTALLATION AND ELECTRICAL FITTINGS. L D. AR ALSO SUBMITTED THAT AS PER NOTE TO RULE 6, THE ELECTRICAL FITTINGS INCL UDE ELECTRICAL WIRING, SWITCHES, SOCKETS, OTHER FITTINGS AND FANS, ETC. IN ASSESSEES CASE, THESE ITEMS ARE ELECTRICAL INSTALLATIONS, HENCE PART OF M ACHINERY AND PLANT (DETAILS ARE PLACED AT PAGES 64 TO 107 OF THE PAPER BOOK FOR THE ITA NOS.1368 & 3960/DEL/2011 9 ASSESSMENT YEAR 2007-08). THE ASSESSEES CLAIM THA T ELECTRICAL INSTALLATION ITEMS ARE PART AND PARCEL OF THE PLANT AND MACHINERY IS IN ORDER AND DESERVE 15% RATE OF DEPRECIATION. THE AS SESSING OFFICER IS NOT JUSTIFIED IN TREATING THE SAME AS ELECTRICAL FITTIN GS. LD. DR RELIED ON THE ORDER OF AUTHORITIES BELOW. 11. WE HAVE HEARD BOTH THE SIDES. WE HAVE ALSO GON E THROUGH THE PAPER BOOK SUBMITTED ON THIS ISSUE. PAGE 64 OF THE PAPER IS LIST OF ITEMS ADDED IN ELECTRICAL INSTALLATIONS DURING FINANCIAL YEAR 2006-07. THE DETAILS AVAILABLE AT PAGE 64 OF THE PAPER BOOK SHOW THAT TH E MAJORITY OF THE EXPENSES ARE IN RESPECT OF TRANSFORMER, PANEL SWITC H GEAR, LT PVC CABLE, POLY CAB CABLE, ELECTRIC GENERATING SET, ELECTRICAL CONTROL PANEL, ELECTRICAL ITEMS, INSTALLATION WORK, DG SET, ETC. E TC. ALL THESE SHOW THAT ALL SUCH EXPENDITURE CANNOT BE PART OF THE PLANT AN D MACHINERY. ASSESSEE HAS CLAIMED THE RATE OF DEPRECIATION AS AVAILABLE O N PLANT AND MACHINERY. THE DETAILS OF EXPENDITURE SHOW THAT MAJORITY OF EX PENSES WERE TOWARDS THE ELECTRIC FITTINGS WHERE RATE OF DEPRECIATION IS ONLY 10%. IN VIEW OF THESE FACTS, WE HOLD THAT THIS EXPENDITURE HAS BEEN RIGHTLY MADE TOWARDS ELECTRICAL FITTINGS AND APPLICABLE DEPRECIATION HAS BEEN ALLOWED ON THE SAME. THE CASE LAWS RELIED UPON BY THE LD. AR ARE ALSO HAVING DIFFERENT FACTS. IN THE CASE OF CIT VS. MTNL, THE NATURE OF THE BUSINESS IS DIFFERENT THAN THE NATURE OF BUSINESS OF THE ASSESSEE. IN TH IS CASE, THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF PROVIDING COMMUNICATION NETWORK. SIMILARLY, ITA NOS.1368 & 3960/DEL/2011 10 IN THE CASE OF SIEMENS LTD., THE COMPANY WAS ENGAGE D IN MANUFACTURE OF EQUIPMENT FOR GENERATION AND TRANSMISSION OF ELECTR ICITY. THUS, IN BOTH THESE CASES, FACTS ARE DIFFERENT. ASSESSEES BUSIN ESS WAS TO MANUFACTURE AND SELL SHEET METAL COMPONENTS FOR AUTOMOBILES AND WHITE GOODS SECTOR. THERE IS A VARIATION IN THE NATURE OF THE BUSINESS AND FACTS OF CASE. THESE ITEMS AS MENTIONED AT PAGE 64 CANNOT BE TREATED AS PART OF THE PLANT AND MACHINERY. ON THESE ELECTRICAL ITEMS, 10% DEPRECIA TION IS ALLOWABLE AS PER RULE. THIS GROUND OF ASSESSEE IN BOTH THE APPE ALS STAND DISMISSED. 11. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 24 TH DAY OF AUGUST, 2012. SD/- SD/- (U.B.S. BEDI) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 24 TH DAY OF AUGUST, 2012 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XVI, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR/ITAT NEW DELHI