M/s Bharat Electronics Ltd., Bangalore V. DCIT, Bangalore

ITA 398/BANG/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5558 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 01-06-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 22-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G V GOPALA RAO CIT IDR
• Keywords: Depreciation
• Section: 143(3); 5(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SMT. P. MADHAVI DEVI , JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO. 398/BANG/2010 ASSESSMENT YEAR : 2006-07 M/S. BHARAT ELECTRONICS LTD., NAGAVARA, OUTER RING ROAD, BANGALORE 560 045. : APPELLANT VS. THE DY. COMMISSIONER OF INCOME TAX (LTU), BANGALORE. : RESPONDENT APPELLANT BY : SHRI BALRAM R. RAO, ADVOCATE RESPONDENT BY : SHRI G.V. GOPALA RAO, CIT-I(DR) O R D E R PER A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER THIS APPEAL OF THE ASSESSEE ARISES AGAI NST THE DECISION OF THE CIT(APPEALS), LTU, BANGALORE IN ITA NO.68 & 18/CIT( A) LTU/08-09 DATED 30.11.2009 FOR THE ASSESSMENT YEAR 2006-07 PASSED U NDER U/S. 250 OF THE I.T. ACT. 2. THE ASSESSEE HAS RAISED 6 GROUNDS IN ITS REVISED GROUNDS OF APPEAL. HOWEVER, THE CRUX OF THE ISSUE IS THE DENIAL OF ENH ANCED DEPRECIATION UNDER RULE 5(2) OF THE INCOME-TAX ACT, 1962. THE ASSESSE E HAS ALSO RAISED A ITA NO.398/BANG/10 PAGE 2 OF 4 GROUND AGAINST LEVY OF INTEREST U/S. 234C AND 234D OF THE ACT, WHICH IS ONLY CONSEQUENTIAL AND WE DISMISS THIS GROUND ACCORDINGL Y. 3. THE ASSESSEE IS A GOVERNMENT UNDERTAKING ENGAGED IN THE MANUFACTURE OF TELEPHONE COMPONENTS, EQUIPMENTS ETC . FOR THE RELEVANT ASSESSMENT YEAR UNDER CHALLENGE, THE APPELLANT SUBM ITTED ITS RETURN OF INCOME ON 29.11.2006 AND SUBSEQUENTLY A REVISED RET URN WAS FURNISHED DUE TO THE REDUCTION IN THE ENHANCED DEPRECIATION U NDER RULE 5(2) OF I.T. RULES. INITIALLY THE CASE WAS PROCESSED U/S. 143(1 ) OF THE ACT AND LATER TAKEN UP FOR SCRUTINY AND ASSESSMENT WAS COMPLETED ON 26.12.2008 U/S. 143(3) OF THE ACT. 4. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE LD. AO OBSERVED THAT THE APPELLANT HAD FAILED TO PRODUCE C ERTIFICATE FROM THE PRESCRIBED AUTHORITY AS REQUIRED UNDER THE PROVISIO NS OF RULE 5(2) UNDER THE INCOME-TAX ACT. SUCH CERTIFICATE WAS TO BE ISSUED BY SECRETARY, DEPARTMENT OF SCIENCE & INDUSTRIAL RESEARCH AND IS MANDATORY. DUE TO THIS REASON, THE LD. AO DENIED THE CLAIM OF ENHANCE D DEPRECIATION AT 40% TO THE APPELLANT. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(APPEALS). THE LD. CIT(APPEALS) UPHELD THE ORDE R OF THE LD. AO WITH THE FOLLOWING OBSERVATIONS: 4A.5 A PLAIN READING OF FOREGOING RULE SHOWS THA T IT IS EXPLICIT THAT A CERTIFICATE ISSUED BY THE SECRETARY , DEPARTMENT OF SCIENTIFIC & INDUSTRIAL RESEARCH, GOVERNMENT OF IND IA SHALL BE ACCOMPANIED ALONG WITH THE RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR. SINCE THE APPELLANT HAS NOT FURNI SHED THE CERTIFICATE FROM THE PRESCRIBED AUTHORITY, IT IS NO T ENTITLED TO CLAIM ENHANCED DEPRECIATION UNDER RULE 5(2) OF THE I.T. R ULES. THUS THIS GROUND OF APPEAL FAILS. THE GROUNDS OF APPEAL NO.2 AND 3 ARE DISPOSED OF ACCORDINGLY. ITA NO.398/BANG/10 PAGE 3 OF 4 5. LD. AR SUBMITTED BEFORE US THAT THE APPELLANT HA D OBTAINED THE REQUISITE CERTIFICATE FROM THE PRESCRIBED AUTHORITY VIZ., GOVERNMENT OF INDIA, MINISTRY OF SCIENCE & TECHNOLOGY, DEPARTMENT OF SCI ENTIFIC & INDUSTRIAL RESEARCH ON 1.2.2010 AND A XEROX COPY OF THE SAID C ERTIFICATE WAS PRODUCED BEFORE US. LD. AR FURTHER STATED THAT NO RMALLY THESE CERTIFICATES ARE RECEIVED LATE SINCE IT HAS TO BE PROCESSED BY V ARIOUS DEPARTMENTS UNDER THE MINISTRY. HE THEREFORE PRAYED THAT THE D ELAY IN FURNISHING THE CERTIFICATE MAY BE CONDONED AND THE CLAIM OF THE AS SESSEE BE ENTERTAINED. 6. LD. DR VEHEMENTLY SUBMITTED THAT THE CLAIM OF TH E APPELLANT CANNOT BE ACCEPTED BECAUSE THE REQUISITE CERTIFICATES WERE NOT FURNISHED BEFORE THE REVENUE AT THE APPROPRIATE TIME AS REQUIRED BY THE ACT. LD. DR FURTHER PRAYED THAT IF THE DELAY IS CONDONED THEN THE MATTE R MAY BE REMITTED BACK TO THE AO SINCE THE CERTIFICATE REQUIRES TO BE EXAM INED BY THE ASSESSING OFFICER BEFORE GRANTING THE HIGHER RATE OF DEPRECIA TION. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN THIS GIVEN CIRCUMSTANCES, IN THE INTERE ST OF JUSTICE, WE ARE OF THE CONSIDERED OPINION THAT THE MATTER SHOULD BE REMITT ED BACK TO THE FILE OF THE LD. AO FOR VERIFICATION OF THE CERTIFICATE OBTAINED FROM THE PRESCRIBED AUTHORITY. IF THE CERTIFICATE IS FOUND TO BE AS PE R THE PROVISIONS OF THE RULE 5(2) OF THE ACT, THE LD. AO IS DIRECTED TO CONDONE THE DELAY IN FURNISHING THE CERTIFICATE BEFORE THE REVENUE AND ENTERTAIN THE CL AIM OF THE APPELLANT IN ACCORDANCE WITH LAW. IT IS ORDERED ACCORDINGLY. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ITA NO.398/BANG/10 PAGE 4 OF 4 PRONOUNCED IN THE OPEN COURT ON THIS 17 TH DAY OF JUNE, 2011. SD/- SD/- ( SMT. P. MADHAVI DEVI ) (A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 17 TH JUNE, 2011. DS/- COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE (1+1) BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.