ARL INFRATECH LIMITED, Jaipur V. CIT-I, Jaipur

ITA 404/JPR/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2140 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 18-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA; VRINDERA MEHTA CIT LQUO
• Keywords: Depreciation; Additional depreciation
• Section: 143(3); 115JB; 263; 63

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH HKKXPAN] YS[KK L NL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, A M VK;DJ VIHY LA- @ ITA NO. 404/JP/2016 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2012-13 M/S ARL INFRATECH LTD., A-27/13-A KANTI CHANDRA ROAD, BANI PARK, JAIPUR. CUKE VS. COMMISSIONER OF INCOME TAX-I JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAFCA9416Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPO NDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI ASHISH SHARMA (ADV.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI R.A. VERMA (ADDL. CIT & SHRI VRINDERA MEHTA (CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 29/01/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 31/01/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE REVISION ORDER DATED 29.02.2016 OF CIT (A), JAIPUR PASSED U/S 263 OF THE INCOME TAX ACT FOR THE A.Y. 2012-13. THE ASSESSEE HAS RAISED T HE FOLLOWING GROUNDS AS UNDER:- 1 THAT THE IMPUGNED ORDER DATED 29.02.2016 IS PER SE ILLEGAL, ARBITRARY AND RUNS COUNTER TO THE FACTS ON RECORDS. 2. THAT THE PRINCIPAL COMMISSIONER OF INCOME TAX, J AIPUR-I HAS GROSSLY ERRED IN HOLDING THE ASSESSMENT ORDER DATED 31.03.2014 AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REV ENUE. ITA NO. 404/JP/2016 M/S ARL INFRATECH LTD. VS. CIT, JAIPUR 2 3. THAT THE PRINCIPAL COMMISSIONER OF INCOME TAX H AS FILED TO APPRECIATE THAT THE RETURN HAS BEEN FILED AND ASSES SED UNDER SECTION 115JB, WHICH IS A SELF CONTAINED CODE AND T HEREFORE ANY ADDITION CONTRARY TO THE PROVISIONS OF SECTION 115J B IS NOT PERMISSIBLE. 4. THAT THE PRINCIPAL COMMISSIONER OF INCOME TAX, J AIPUR-I HAS GROSSLY ERRED IN SETTING ASIDE THE ASSESSMENT ORDER IN RESPECT OF ISSUES RELATING TO HIGHER DEPRECIATION ON ENERGY SA VING EQUIPMENT & 100% DEPRECIATION ON POLLUTION CONTROL EQUIPMENTS . 5. THAT THE PRINCIPAL COMMISSIONER OF INCOME TAX-I HAS FILED TO APPRECIATE THE ISSUES OF HIGHER DEPRECIATION AND 1 00% DEPRECIATION ON ENERGY SAVING EQUIPMENT AND POLLUTI ON CONTROL EQUIPMENTS RESPECTIVELY HAD BEEN EXAMINED BY THE AS SESSING OFFICER AND DIRECTING THE ASSESSING OFFICER TO EXAM INE THE ISSUE AGAIN WOULD BE INTERFERENCE WITH THE INDEPENDENCE O F POWERS AVAILABLE WITH THE ASSESSING OFFICER. 2. WE HAVE HEARD THE LD. AR AS WELL AS DR AND CONSI DERED THE RELEVANT MATERIAL ON RECORD. THE ASSESSMENT U/S 143 (3) WAS COMPLETED ON 31.03.2014 BY THE AO AT TOTAL INCOME OF RS. 9,01 ,53,202/-. SUBSEQUENTLY ON PERUSAL OF THE RECORD THE COMMISSIO NER OBSERVED THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HA D CLAIMED HIGHER DEPRECIATION @ 80% ON ENERGY SAVING EQUIPMENTS AM OUNTING TO RS. 17,27,594/- AS WELL AS DEPRECIATION @ 100% ON THE P OLLUTION CONTROL EQUIPMENTS TO THE TUNE OF RS. 24,08,712/-. THE COMM ISSIONER NOTED THAT DURING THE ASSESSMENT PROCEEDING THE COPIES OF SOME OF THE PURCHASE BILLS WERE FURNISHED BY THE ASSESSEE AS TH E AO ASKED THE ITA NO. 404/JP/2016 M/S ARL INFRATECH LTD. VS. CIT, JAIPUR 3 ASSESSEE TO FURNISH INVOICES OF THE PURCHASES EXCEE DING RS. 2,00,000/-. THUS, THE ENTIRE PURCHASE AND NATURE OF EQUIPMENTS WERE NOT UNVERIFIED BY THE AO. THE COMMISSIONER ACCORDINGLY PROPOSED TO REVISE THE ORDER PASSED BY THE ASSESSING OFFICER BY ISSUING A SHOW C AUSE NOTICE DATED 11.01.2016 U/S 263 OF THE I.T. ACT. IN RESPONSE THE ASSESSEE CONTENDED BEFORE THE COMMISSION THAT THE ASSESSEE FURNISHED A LL RELEVANT RECORD AS CALLED FOR BY THE ASSESSING OFFICER AND THE ASSE SSING OFFICER AFTER CONDUCTING INQUIRY AND SATISFYING HIMSELF ALLOWED T HE CLAIM OF THE ASSESSEE. THEREFORE, THE ORDER PASSED BY THE AO IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE ASSESSEE ALSO CONTENDED BEFORE THE COMMISSIONER THAT THE ASSESSIN G OFFICER HAS COMPUTED THE INCOME OF THE ASSESSEE U/S 115JB AND C HARGED MAT INSTEAD OF CHARGING THE INCOME UNDER NORMAL COMPUTA TION, THEREFORE, THE ORDER PASSED BY THE AO CANNOT BE HELD ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE COMMISSIONER DID N OT ACCEPT THE CONTENTIONS OF THE ASSESSEE AND HELD THAT THE ASSES SMENT ORDER PASSED BY THE AO IS ERRONEOUS SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE ORDER WAS SET ASIDE WITH THE DIRECTION TO THE AO RE- EXAMINE BOTH ISSUES OF HIGHER DEPRECIATION ON ENERG Y SAVING EQUIPMENTS AND POLLUTION CONTROL EQUIPMENTS. ITA NO. 404/JP/2016 M/S ARL INFRATECH LTD. VS. CIT, JAIPUR 4 3. IT IS PERTINENT TO NOTE THAT THE ASSESSING OFFIC ER WHILE COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT HAS MADE AN AD DITION OF RS. 19,126/- ON ACCOUNT OF EXCESS STOCK FOUND DURING TH E COURSE OF SURVEY PROCEEDINGS IN THE NORMAL COMPUTATION OF INCOME. HO WEVER, THE TAX WAS CHARGED ON THE BOOK PROFIT U/S 115JB OF THE ACT COMPUTED AT RS. 9,01,53,202/- AND THEREFORE, EVEN IF THE CLAIM OF H IGHER/ADDITIONAL DEPRECIATION IS DISALLOWED THERE WILL BE NO EFFECT ON THE TAX LIABILITY AS THE AO HAS COMPUTED THE TOTAL INCOME AS PER THE PRO VISIONS OF SECTION 115JB AND CHARGED MAT ON THE SAME. THEREFORE, WE FI ND THAT THE CLAIM OF HIGHER DEPRECIATION ON THE ENERGY SAVING EQUIPME NTS AS WELL AS POLLUTION CONTROL EQUIPMENTS IS NOT GOING TO EFFECT THE REVENUE WHEN THE INCOME OF THE ASSESSEE WAS ASSESSED U/S 115JB A ND MAT WAS CHARGED. EVEN IF THE CLAIM WAS DISALLOWED IF THE HI GHER DEPRECIATION CLAIM WAS DISALLOWED THE TAX LIABILITY UNDER MAT WA S STILL HIGHER THAN THE NORMAL COMPUTATION. IT IS SETTLED PROPOSITION O F LAW THE COMMISSIONER CAN INVOKED THE PROVISION OF SECTION 2 63 OF THE ACT ONLY WHEN THE TWIN CONDITIONS BEING THE ORDER OF THE ASS ESSING OFFICER IS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE ARE SATISFIED. IN THE CASE IN HAND FOR THE SAKE OF ARGU MENT EVEN IF THE ORDER OF THE ASSESSING OFFICER IS CONSIDERED AS ERRONEOUS BUT THE SAME IS NOT ITA NO. 404/JP/2016 M/S ARL INFRATECH LTD. VS. CIT, JAIPUR 5 PREJUDICIAL TO THE INTEREST OF THE REVENUE SO FAR A S THE CLAIM OF HIGHER DEPRECIATION IS CONCERNED AS THE INCOME OF THE ASSE SSEE WOULD BE COMPUTED U/S 115JB AND THE TAX LIABILITY UNDER MAT IS STILL MORE THAN THE NORMAL COMPUTATION OF INCOME. THE LD. DR HAS FA IRLY ADMITTED THIS FACT THAT EVEN AFTER DISALLOWANCE OF THE CLAIM OF H IGHER DEPRECIATION THE TAX LIABILITY UNDER MAT WOULD BE HIGHER THAN THE NO RMAL COMPUTATION. FURTHER, THIS ISSUE OF HIGHER/ADDITIONAL DEPRECIATI ON IS NOT RECURRING IN NATURE AND LIMITED TO THE YEAR UNDER CONSIDERATION. ACCORDINGLY, IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE WE ARE OF THE CONSIDERED OPINION THAT ONCE THE CONDITION OF PREJU DICIAL TO THE INTEREST OF THE REVENUE IS NOT SATISFIED THEN THE LD. CIT IS NOT JUSTIFIED IN REVISING THE ORDER OF THE ASSESSING OFFICER PASSED U/S 143(3) OF THE ACT HENCE, WE SET ASIDE THE IMPUGNED ORDER PASSED U/S 2 63 OF THE ACT. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 31/01/2018 SD/- SD/- HKKXPAN FOT; IKY JKO (BHAGCHAND) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 31/01/2018. ITA NO. 404/JP/2016 M/S ARL INFRATECH LTD. VS. CIT, JAIPUR 6 * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S ARL INFRATECH LTD., JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- CIT-I, JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 404/JP/2016} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR