M/s Sri Sai Krishna Agro Cold Storage Pvt Ltd, Visakhapatnam V. The Addl CIT, Range-4., Visakhapatnam

ITA 417/VIZ/2006

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2834 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2009
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2003-2004
• Appeal Filed On: 12-10-2006
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B JAYA KUMAR
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO.417/VIZAG/2006 ASSESSMENT YEAR : 2003-04 M/S. SRI SAI KRISHNA AGRO COLD STORAGE PVT. LTD., VISAKHAPATNAM ADDL. CIT, RANGE-4, VISAKHAPATNAM (APPELLANT) VS. (RESPONDENT) PAN NO.AAECS2805A APPELLANT BY: SHRI G.V.N. HARI, CA RESPONDENT BY: SHRI B. JAYA KUMAR, DR ORDER PER SHRI S.K. YADAV, JUDICIAL MEMBER:- THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)- II, VISAKHAPATNAM DATED 7.8.2006 AND IT RELATES TO THE ASSESSMENT YEAR 2003-04. 2. ALL THE GROUNDS RAISED BY THE ASSESSEE GIVE RISE TO A SINGLE ISSUE NAMELY WHETHER LD. CIT(A) IS JUSTIFIED IN CONFIRMIN G THE DISALLOWANCE OF DEPRECIATION OF RS.52,228/-. 3. THE FACTS ARE STATED IN BRIEF. THE ASSESSEE COM PANY IS RUNNING A COLD STORAGE PLANT AND IS ALSO OPERATING FISH TRAWLERS. DURING THE FINANCIAL YEAR 2001-02, THE ASSESSEE ACQUIRED TWO TRAWLERS, GOT TH EM REPAIRED AND PUT THEM TO USE DURING THE FINANCIAL YEAR 2002-03 RELEV ANT TO THE ASSESSMENT YEAR 2003-04. THE TWO TRAWLERS HAVE BEEN NAMED AS GOPALA KRISHNA-II AND GOPALA KRISHNA-III. THE ASSESSEE CAPITALISED THE R EPAIR CHARGES AND CLAIMED DEPRECIATION THEREON. THE ASSESSEE COULD NOT PRODUC E A PORTION OF BILLS PERTAINING TO THE REPAIR EXPENSES. THOUGH THE ASSE SSEE PRODUCED REMAINING PART OF THE SAID EXPENSE, THE AO NOTICED THAT THEY REMAINED UNPAID TILL THE DATE OF ASSESSMENT. THE BREAKUP DETAILS ARE FURNIS HED BELOW: 2 NATURE GOPALAKRISHNA-II GOPALAKRISHNA-III 1. EXPENSES CLAIMED WHERE 5,37,350 2,65,980 NO BILLS ARE PRODUCED 2. EXPENSES WHICH ARE NOT PAID TILL DATE 8,33,788 1,51,836 TOTAL 13,71,138 4,17,816 HENCE, THE ASSESSING OFFICER DID NOT RECOGNIZE THE REPAIR EXPENSES CAPITALISED BY THE ASSESSEE AND ACCORDINGLY DISALLOWED THE DEPR ECIATION CLAIMED THEREON. THE LD. CIT(A) ALSO CONFIRMED THE ORDER OF THE ASSE SSING OFFICER. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE PARTIES AND CAREFULLY PERUSED THE RECORD. THERE CANNOT BE ANY DISPUTE WITH REGARD TO THE FACT THAT IT IS THE RESPONSIBILITY OF THE ASSESSEE TO PROVE THE EXPENDITURE, WHETHER CAPI TAL OR REVENUE, CLAIMED TO HAVE BEEN INCURRED BY HIM. IN THIS CASE, THE AS SESSEE HAS INCURRED MAJOR REPAIR EXPENSES ON TWO TRAWLERS AND THE SAID EXPEND ITURE WAS CAPITALISED AND DEPRECIATION WAS ALSO CLAIMED THEREON. HOWEVER, TH E ASSESSEE COULD NOT PRODUCE BILLS IN RESPECT OF REPAIR EXPENSES TO THE EXTENT OF RS.5.3 LAKHS ON GOPALA KRISHNA-II AND RS.2.65 LAKHS ON GOPALA KRISH NA-III. SINCE THE ASSESSEE HAS FAILED TO SUPPORT HIS CLAIM WITH RELEV ANT BILLS, WE DO NOT FIND ANY INFIRMITY IN THE ACTION OF TAX AUTHORITIES IN DISAL LOWING THE DEPRECIATION ON IT. HOWEVER, WITH REGARD TO THE REMAINING EXPENSES FOR WHICH BILLS WERE PRODUCED, WE FIND THAT THE ASSESSING OFFICER DID NO T RECOGNIZE THE SAME FOR THE REASON THAT THE SAID EXPENDITURES WERE NOT PAID TILL DATE. WE DO NOT FIND ANY REASONING FOR THE ACTION OF THE ASSESSING OFFIC ER MORE PARTICULARLY WHEN THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM ON ACCO UNTING. IN OUR OPINION, NON-PAYMENT OF THE EXPENDITURE WHICH HAS OTHERWISE BEEN INCURRED CANNOT BE A GROUND FOR DISALLOWANCE OF DEPRECIATION. IT I S NOT THE CASE OF THE AO THAT THE ASSESSEE DID NOT INCUR THE SAID EXPENSES A T ALL. IN VIEW OF THE ABOVE, WE DIRECT THE ASSESSING OFFICER TO ALLOW DEP RECIATION ON THE PORTION OR REPAIR EXPENDITURE FOR WHICH BILLS WERE PRODUCED FO R BOTH THE TRAWLERS. 3 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 2.12.2009 SD/- SD/- (BR BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM, DATED 2 ND DECEMBER, 2009 COPY TO 1 M/S. SRI SAI KRISHNA AGRO COLD STORAGE PVT. LTD., D.NO.48-18-66/1, TULASIPETA, RAMA TALKIES JN., VISAKHAPATNAM 2 ADDL. CIT, 3 RD FLOOR, DIRECT TAXES BUILDING, MVP COLONY, VISAKHAP ATNAM 3 THE CIT, VISAKHAPATNAM 4 THE CIT(A)-II, VISAKHAPATNAM 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM