ACIT Range II, V. Lakhani Detergent & Seap (P) Ltd,

ITA 4394/DEL/2007

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 8212 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 08-06-2009
• Assessment Year: 2004-2005
• Appeal Filed On: 02-11-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BK GUPTA
• Assessee Lawyers: M K MADAN
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `D: NEW DELHI BEFORE SHRI R.P.TOLANI,JM AND SHRI K.G. BANSAL, A M I.T.A. NO.4394/DEL OF 2007 ASSESSMENT YEAR: 2004-05 ACIT, RANGE-2, M/S LAKHANI DETERGENT & SOAP P. LT D. NEW DELHI. VS PLOT NO.130, SECTOR 24, FARIDABAD. APPELLANT RESPONDENT APPELLANT BY: SHRI B.K. GUPTA RESPONDENT BY: SHRI M.K. MADAN ORDER PER R.P. TOLANI, JM: THIS IS REVENUE APPEAL FOR ASSTT. YEAR 2004-05. FO LLOWING GROUNDS ARE RAISED: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.1,19,398/- MADE BY THE AO U/S 2(24)(X) READ WITH SECTION 36(1)(VA) OF THE I.T. ACT, 1961 ON ACCOUNT OF LATE PAYMENT OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND WITHOUT 2 APPRECIATING THE FACT THAT THE PAYMENTS WERE MADE BEYOND THE DUE DATES. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) ERRED I LAW IN OBSERVING THAT DUE DATE AS DEFINED IN EXPLANATION TO SECTION 36(1)(VA) INCLUDES GRACE PERIOD ALSO, ALLOWED AS PER PF & ESI ACTS. 3. WHETHER ON LAW AND FACTS OF THE CASE, LD. CIT(A) IS RIGHT IN DELETING CLAIM OF DEPRECIATION TO THE T UNE OF RS.26,940/- BY TREATING THAT NOT-PUT-TO-USE IS PASSIVE USE. THE BLOCK METHOD OF CALCULATING DEPRECIATION DOES NOT ALLOW FOR CLAIM OF DEPRECIATION ON MACHINERY NOT AT ALL PUT TO USE. 4. WHETHER ON LAW AND FACTS OF THE CASE, LD. CIT(A) WAS RIGHT IN ALLOWING DEPRECIATION @ 25% ON ELECTRIC INSTALLATIONS, FANS ETC WHICH IS A PART OF BLOCK OF FURNITURE AND FITTINGS ON WHICH DEPRECIATION IS ALLOWABLE @ 15% AS PER INCOME- TAX RULES. 2. APROPOS GROUND NO.1, BOTH THE PARTIES CONCEDE TH AT THIS GROUND IS SIMILAR TO GROUND NO.1 OF REVENUES APPEAL FOR ASST T. YEAR 1999-2000 IN THE CASE OF M/S LAKHANI RUBBER UDYOG P. LTD. BY OUR OR DER OF EVEN DATE, WE HAVE HELD THAT HELD THAT IF THE PAYMENT IN RESPECT OF EMPLOYER AND EMPLOYEES CONTRIBUTION IS MADE BY THE ASSESSEE BEFORE DUE DAT E OF FILING OF RETURN, THE SAME SHALL BE ALLOWED. THIS GROUND OF REVENUE IS D ISMISSED. 3 3. APROPOS GROUND NO.2 AND 3, CIT(A) DELETED THE SA ME BY FOLLOWING OBSERVATIONS: 4.2 I HAVE CONSIDERED THE SUBMISSIONS OF THE LD. AR AND PERUSED THE ASSTT. ORDER. I FIND THE CONTENTION OF THE LD. AR TO BE CORRECT. WE CANNOT ALLOW DEPRECIATION ON MACHINE WISE BUT ONLY TO BLOCK WISE. SINCE MOULDS AND DIES FORMED THE PART OF THE MACHINERY UNDER ONE BLOCK, THEREFORE, THE DEPRECIATION HAS TO BE ALLOWED IN TOTO ON BLOCK, NO T SEPARATED FOR THE PURPOSE OF USE OR PASSIVE USE, EVEN THOUGH THE MOULDS AND DIES ARE MACHINERY KEPT FOR PASSIVE USE AS A DEPRECIATION IS ALLOWABLE EVEN THEN. THEREFORE, THE DISALLOWANCE OF RS.26,990/- IS DELETED. 5.2 I HAVE CONSIDERED THE SUBMISSIONS OF THE LD. AR AND FIND HIS CONTENTION TO BE CORRECT. THE FANS , COOLERS, AC AND REFRIGERATOR ARE FITTINGS TO THE MACHINERY INSTALLED IN THE FACTORY PREMISES. THEREFORE, THEY BEING A PART OF THE MACHINERY I.E. BLOCK OF PLANT AND MACHINERY, DEPRECIATION SHOULD BE ALLOWED ON THEM ACCORDINGLY. MOREOVER, THE AOS ACTION IS WRONG IN ANOTHER SENSE THAT NO ESTIMATION DEPRECIATION CAN BE EFFECTED IN THE ABSENCE OF ANY SPECIFIC FINDING ON THE ITEMS INVOLVED IN THE BLOCK. THEREFORE, THE WHOLE EXERCISE OF ESTIMATED DISALLOWANCE AT RS.20,000/- IS UNJUSTIFIED. THEREFORE, THE DISALLOWANCE OF RS.20,000/- IS ALSO DELETED. 3. LEARNED DR RELIED ON THE ORDER OF AO. 4. ON THE OTHER HAND, LEARNED COUNSEL FOR THE ASSES SEE RELIED ON THE ORDER CIT(A). 4 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. WE SEE NO INFIRMITY IN THE ORDER OF CIT(A) ON BOTH THE ISSUES, WHICH ARE UPHELD. 6. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH JUNE 2009. SD/- SD/- (K.G. BANSAL) (R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 19 TH JUNE 2009 VIJAY COPY TO: 1. APPELLANT. 2. RESPONDENT. 3. CIT 4. CIT(A)-XXIII, NEW DELHI. 5. DR ASSISTANT REGISTRAR