Shri Bharat Ratilal Sheth, JAMNAGAR V. The Assistant Commissioner of Income Tax, Central Circle-3, JAMNAGAR

ITA 436/RJT/2012

• Counselvise Citation: [2012] 120 COUNSELVISE.COM (IT) 0215 (ITAT-RAJKOT)
• Duration Of Justice: 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 05-09-2012
• Assessment Year: 2009-2010
• Appeal Filed On: 18-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Keywords: Depreciation; Opportunity of being heard; Revised return

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT. . .. . . .. . , , , , . .. . . .. . , , , , $ $ $ $ BEFORE SHRI T. K. SHARMA, JM AND SHRI D. K. SRIVASTAV A, AM ITA NO.436/RJT/2012. / ASSESSMENT YEAR 2009-10 SHRI BHARAT RATILAL SHETH PROP OF M/S AMIZARA ENTERPRISES, NEAR TOWN HALL JAMNAGAR. PAN: ANMPS8957K ( * / APPELLANT) VS. ADDITIONAL COMMISSIONER OF INCOME TAX, CIRCLE-3, JAMNAGAR. +,* / RESPONDENT -. / ASSESSEE BY SHRI CHETAN AGARWAL . / REVENUE BY SHRI. M.K.SINGH . / DATE OF HEARING 5.9.2012 . / DATE OF PRONOUNCEMENT 7.9.2012 / / / / ORDER . .. . . . . . , , , , / T. K. SHARMA, J. M. THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DATED 25.4.2012 OF CIT(A) , JAMNAGAR FOR THE ASSESSMENT YEAR 2009-10. 2. GROUND NO.1 IS AGAINST CONFIRMING THE ADDITION OF R S.5,41,607/- MADE BY THE AO U/S 40(A)(IA) OF THE INCOME TAX ACT, 1 961(THE ACT). IN RESPECT OF THIS GROUND, WE HAVE HEARD BOTH THE SIDES. T HE LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT INTEREST AMOUNTING TO RS.5 ,41,607/- PAID TO TATA MOTOR FINANCE LTD. WAS ACTUALLY PAID DURING THE YEAR, THEREFORE AS PER THE JUDGMENT OF INCOME TAX APPELLATE TRIBUNA L, VISAKHAPATNAM, ITA NO.436/RJT/2012. 2 SPECIAL BENCH IN THE CASE OF MERILYN SHIPPING & TRANSP ORTS V/S ADDITIONAL COMMISSIONER OF INCOME-TAX, RANGE-1, VISAKHAPATNAM [2012 ] 20 TAXMANN.COM 244 (VISAKHAPATNAM - TRIB.) (SB), NO DISA LLOWANCE CAN BE MADE U/S 40(A)(IA) OF THE ACT. IN THIS VIEW OF THE MATTER, THE ORDER OF THE LD. CIT(A) IS SET ASIDE AND THE MATTER IS RESTORED TO THE FILE OF THE AO FOR FRESH DECISION AND FOR WORKING OUT THE DISALLOWANCE U/S 40(A)(IA), IF ANY, KEEPING IN VIEW THE DECISION OF THE ITAT IN THE CASE OF MERILYN SHIPPING & TRANSPORTS (SUPRA) AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 3. GROUND NO.2 TAKEN BY THE ASSESSEE READS AS UNDER : THE LD. CIT(A) HAD ERRED IN LAW AS WELL AS ON FACT IN NOT DIRECTING ASSESSING OFFICER TO ALLOW DEPRECIATION OF CURRENT ASSESSMEN T YEAR ON ENHANCED VALUE OF BLOCK OF ASSETS DUE TO DISALLOWANCE OF DEPRECIATION IN IMMEDIATE PRECEDING YEAR 4. THE BRIEF FACTS RELATING TO THE CONTROVERSY INVOLVED IN THE AFORESAID GROUND IS THAT UNDER SCRUTINY ASSESSMENT IN THE ASSESSMENT YEAR 2008- 09, THE AO HAS DISALLOWED DEPRECIATION CLAIMED BY THE ASSESSEE ON THE BUSES (FALL UNDER 30% BLOCK OF ASSET) AS THE SAME WE RE NOT PUT TO USE FOR MORE THAN 180 DAYS. AS A RESULT, THE CLAIM OF D EPRECIATION HAD BEEN REDUCED BY RS.16,11,739/- IN THE ASSESSMENT YEAR 2 008-09. HOWEVER, WHILE WORKING OUT THE DISALLOWANCE FOR THE ASSESSMENT YEAR UNDER APPEAL I.E. ASSESSMENT YEAR 2009-10, THE AO HAS NOT CORRECTLY WORKED OUT THE OPENING WRITTEN DOWN VALUE. ON APPEA L, IN THE IMPUGNED ORDER THE LD. CIT(A) UPHELD THE ACTION OF THE AO FO R THE DETAILED REASONS GIVEN IN PARAGRAPH 9.2 OF THE IMPUGNED WHICH READS AS UNDER : 9.2 I HAVE DULY CONSIDERED THE SUBMISSIONS OF THE APPEL LANT. IN THIS REGARD, THE APPELLANT SUBMITTED THAT IN SCRUTINY ASSESSMENT OF ITA NO.436/RJT/2012. 3 AY 2008-09, THE AO HAS DISALLOWED OF DEPRECIATION CLAIMED ON BUSES(FALL UNDER 30% BLOCK OF ASSETS) AS THE SAME WERE NOT PUT TO USE FOR MORE THAN 180 DAYS. AS A RESULT, THE CLAIM OF DEPRECIATION HAS BEEN REDUCED BY RS.16,11,739/- IN AY 2008-09. TH E APPELLANT ARGUED THAT AS THE CLAIM OF DEPRECIATION HAS BEEN REDU CED, VALUE OF BLOCK OF ASSET SHOULD HAVE BEEN INCREASED TO THAT EXTE NT. THEREFORE, CLOSING WDV AS ON 31.3.2008 OF THAT BLOCK OF ASSET SHOULD HAVE BEEN INCREASED BY RS.16,11,739/-. CONSEQUENT LY, OPENING WDV AS ON 1.4.2009 SHOULD BE INCREASED AND DEPR ECIATION ALLOWANCE SHOULD HAVE BEEN ENHANCED ACCORDINGLY IN THE SUBSEQUENT YEAR I.E. IN AY 2009-10. THEREFORE, THE APPELLANT REQUESTED TO GRANT ENHANCED DEPRECIATION ON INCREASED V ALUE OF BLOCK OF ASSET AY 2009-10. I CAREFULLY CONSIDERED THE SUBM ISSION OF THE APPELLANT. FIRST OF ALL THE ACTION OF AO IS IN CORRECT IN THE SENSE THAT RECTIFICATION FOR THE CARRIED FORWARD LOSS OF AY 2008-09. ON THE OTHER HAND THE CLAIM OF APPELLANT FOR ENHANCED DEPRECIATION OF INCREASED VALUE OF ASSET WAS NEVER MADE BEFORE THE AO. IT IS WELL SETTLED THAT WHEN CLAIM FOR DEPRECIATION IS NOT MADE BY FILING REVISED RETURN IT CANNOT BE ENTERTAINED. THEREFORE, I CANNOT ALLOW THE DEPRECIATION OF RS.4,83,522/- ON INCREASED VALUE O F BLOCK OF ASSETS WHICH IS RS.16,11,739/-. AS SUCH APPELLANTS PLEA IS DISMISSED. ON OTHER HAND AO IS DIRECTED TO PASS RECTIFICATI ON IN RELEVANT AY I.E.2008-09 TO REDUCE CARRIED FORWARD L OSS. AS A RESULT, I PARTLY ALLOW THIS GROUND OF APPEAL. 5. AGGRIEVED WITH THE ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. AT THE TIME OF HEARING BEFORE US, SHRI CHETAN AGARWAL, THE LD. COUNSEL FOR THE ASSESSEE APPEARED AND CONTENDED THAT I N THE RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER APPEAL, THE ASSESSEE HAS CLAIMED DEPRECIATION ON OPENING WDV AS PER RETURN FILED FOR T HE ASSESSMENT YEAR 2008-09. HE SUBMITTED THAT AT THE RELEVANT POINT OF TIME, THE ASSESSMENT FOR THE ASSESSMENT YEAR 2008-09 WAS PENDING. HE SUBMIT TED THAT IT IS THE DUTY OF THE AO TO ALLOW CORRECT DEPRECIATION. WHILE D OING SO, THE LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE AO OUGHT TO HAVE WORKED OUT THE WDV AFTER TAKING INTO CONSIDERATION THE DEPRE CIATION ACTUALLY ALLOWED IN THE ASSESSMENT YEAR 2008-09, SINCE THIS HAS N OT BEEN DONE, ITA NO.436/RJT/2012. 4 THE AO BE DIRECTED TO REWORK OUT THE DEPRECIATION ON ENHANCED WDV BY 30% DEPRECIATION ON BUSES WHICH IS DISALLOWED IN THE ASSESS MENT YEAR 2008-09. 7. ON THE OTHER HAND, SHRI M.K.SINGH , THE LD. DR COULD NOT CONTROVERT THE AFORESAID SUBMISSIONS MADE BY THE LD. CO UNSEL FOR THE ASSESSEE. 8. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IT IS PERTINENT TO KNOW THAT IT IS THE DUTY OF THE AO TO WORKED OUT THE DEPRECIATION FOR THE YEAR UNDER APPEAL. THE AO HAS IGNORED THIS. APART FROM THIS, WHEN THE ASSESSEE FILED TH E RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER APPEAL, THE ASSESSMENT FOR THE ASSESSMENT YEAR 2008-09 WAS PENDING. KEEPING IN THIS VIE W ALL THE FACTS, WE SET ASIDE THE ORDER OF THE LD. CIT(A) ON THIS ISSUE A ND DIRECT THE AO TO WORK OUT THE DEPRECIATION ON ENHANCED VALUE OF BLOCK ASSET S DUE TO DISALLOWANCE OF DEPRECIATION IN THE IMMEDIATE PRECEDIN G ASSESSMENT YEAR. THIS GROUND OF APPEAL IS ACCORDINGLY ALLOWED. 9. IN THE RESULT, FOR STATISTICAL PURPOSE, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED. THIS ORDER IS PRONOUNCED IN THE OPEN COURT ON THE DAT E MENTIONED HEREINABOVE. SD SD ( .. / D. K. SRIVASTAVA) ( .. / T. K. SHARMA) / ACCOUNTANT MEMBER /JUDICIAL MEMBER 3/ ORDER DATE 7.9.2012 /RAJKOT ITA NO.436/RJT/2012. 5 SRL . .. . +4 +4 +4 [phone] / COPY OF ORDER FORWARDED TO:- 1. * / APPELLANT-. 2. +,* / RESPONDENT- 3. : / CONCERNED CIT. 4. :- / CIT (A). 5. 4 +, , / DR, ITAT, RAJKOT 6. / GUARD FILE. / BY ORDER , TRUE COPY SENIOR PRIVATE SECRETARY , INCOME TAX APPELLATE TRIBUNAL, RAJKOT.