ACIT, Panipat V. M/s Lala Harbhagwan Dass Memorial & Dr. Prem Hospital (P) Ltd, New Delhi

ITA 448/DEL/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2322 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 01-12-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 06-02-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BK GUPTA
• Assessee Lawyers: ASHWANI TANEJA
• Keywords: Depreciation; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D : NEW DELHI BEFORE SHRI C.L.SETHI, JM AND SHRI R.C.SHARMA, AM ITA NO.448/DEL/2009 ASSESSMENT YEAR : 2005-06 ASSTT.COMMISSIONER OF INCOME TAX, CIRCLE, PANIPAT. VS. M/S LALA HARBHAGWAN DASS MEMORIAL & DR.PREM HOSPITAL (P) LTD., BISHAN SAROOP COLONY, PANIPAT. PAN NO.AAACL9072G. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI B.K.GUPTA, SR.DR. RESPONDENT BY : SHRI ASHWANI TANEJA, ADVOCATE. ORDER PER R.C.SHARMA, AM : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) DATED 8.12.2008 FOR THE AY 2005-06, IN THE MATTER OF ORDE R PASSED U/S 143(3). 2. THE ONLY GRIEVANCE OF THE REVENUE RELATES TO ALL OWING CLAIM OF DEPRECIATION ON CT SCAN MACHINE. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED. THE FACTS OF THE CASE ARE THAT DURING THE YEAR UNDER CONSIDERATION, ASSESSEE PURCHASED A SECOND HAND CT SCAN MACHINE FROM M/S WIPRO GE MEDICAL SYST EM LTD., HOSUR, KARNATAKA AND REPLACED ITS OWN OLD CT SCAN MACHINE. THE MACHINE WAS PURCHASED FOR RS.51,07,704/- AND RS.3,92,296/- WERE SPENT ON PURCHASE OF LEAD GLASS/UPS/STABILIZER AND THEREFORE, TOTAL COST OF C T SCAN MACHINE WAS RS.55,00,000/- ON WHICH ASSESSEE CLAIMED DEPRECIATI ON @ 40% CLAIMING IT TO BE A LIFE SAVING MEDICAL EQUIPMENT AND THE OLD EXISTING MACHINE WAS SOLD FOR RS.5,00,000/-. THE OLD MACHINE WAS SHOWN UNDER THE HEAD PLANT AND MACHINERY, ITA-448/D/2009 2 ELIGIBLE FOR DEPRECIATION @ 25% WHEREAS THE NEW SEC OND HAND MACHINE WAS CLAIMED TO BE LIFE SAVING MEDICAL EQUIPMENT AND ACC ORDINGLY SHOWN IN THE GROUP OF ASSETS ELIGIBLE FOR DEPRECIATION @ 40%. THE ASS ESSEE PURCHASED THIS NEW SECOND HAND MACHINE ON 29.3.2005 AS FOUND OUT BY TH E AO DURING ASSESSMENT PROCEEDINGS BUT ASSESSEE CLAIMED THAT IT WAS PURCHA SED ON 21.3.2005 AND LATER ON, AO IN HIS COMMENTS CONFIRMED THAT THE MACHINE WAS P URCHASED ON 21.3.2005 AND THE AO HAD WRONGLY WRITTEN THE DATE OF PURCHASE AS 29.3.2005 IN THE ASSESSMENT ORDER. ASSESSEE CLAIMED THAT THE MACHINE WAS INSTA LLED IN THE SAME PLACE WHERE THE OLD MACHINE WAS FUNCTIONING. THE OLD MACHINE W AS SOLD AND REMOVED ON 30.3.2005 AND ON THE SAME DAY THE NEW MACHINE START ED WORKING. IT IS ALSO CLAIMED THAT THIS MACHINE DOES NOT REQUIRE ANY FOUN DATION ETC., IT COMES IN THE READY TO OPERATE CONDITION AND ONLY THE ELECTRICITY CONNECTION IS TO BE MADE, WHEREAS, AO HELD THAT THE MACHINE COULD NOT HAVE BE EN TRANSPORTED IN THE SHORT TIME AND HELD THAT THE MACHINE WAS NOT USED BEFORE 31.3.2005, ACCORDINGLY ASSESSEE WAS NOT ENTITLED FOR CLAIM OF DEPRECIATION . 4. DURING APPELLATE PROCEEDINGS, THE CIT(A) CALLED FOR A REMAND REPORT AND AOS COMMENT WHICH WAS REPLIED BY THE AO AS UNDER:- KINDLY REFER TO YOUR LETTER NO.CIT(A)/KNL/2008-09/ 285 DATED 20.8.2008 ON THE ABOVE SUBJECT. AFTER GOING THROUGH THE EVIDENCE FILED BY THE ASSES SEE, IT IS SEEN THAT THE CT SCAN WAS DISPATCHED VIDE INVOICE DATED 21.3. 2005 AND NOT 29.3.2005 AS MENTIONED IN THE ASSESSMENT ORDER AND THE CERTIFICATE GIVEN TO THE EFFECT THAT THE GE HISPEED DXI CT SCAN NER INSTALLED AT LALA HARBHAGWAN DASS MEMORIAL & DR. PREM HOSPITAL B Y M/S WIPRO GE HEALTH CARE DATED 25.1.2008, DEPRECIATION IS ALLOWABLE. HOWEVER, THE SAME IS ALLOWABLE @ 25% AND NOT 40% AS CLAIMED BY THE ASSESSEE BECAUSE THIS CT SCAN IS NOT A LIFE SAV ING DEVICE AS PRESCRIBED IN I.T.RULES (DEPRECIATION RATES). ITA-448/D/2009 3 5. BY CONSIDERING THE REMAND REPORT, THE CIT(A) ALL OWED CLAIM OF DEPRECIATION AT 25% BY RECORDING A FINDING THAT NEW SECOND HAND CT SCAN MACHINE WAS PURCHASED AND USED FOR THE SECOND HALF OF THE PREVIOUS YEAR. 6. IT IS CRYSTAL CLEAR FROM THE REMAND REPORT THAT WHATEVER ADDITIONAL EVIDENCE WAS SUBMITTED BY THE ASSESSEE BEFORE THE CIT(A) WAS SENT TO THE AO FOR HIS COMMENTS WHEREIN THE AO HIMSELF HAS STATED THAT CT SCAN MACHINE WAS DISPATCHED VIDE INVOICE DATED 21.3.2005 AND NOT 29. 3.2005 AS MENTIONED IN THE ASSESSMENT ORDER. IN THE REMAND REPORT, THE AO ALS O OBSERVED THAT MACHINE IS ELIGIBLE FOR CLAIM OF 25% DEPRECIATION AS PER IT RU LES. ADDITIONAL EVIDENCE WAS PLACED BEFORE THE CIT(A) TO RECTIFY A WRONG MENTION OF DATE OF DISPATCH ON WHICH CIT(A) HAS ALREADY CALLED AOS COMMENTS, DOES NOT V IOLATE PROVISIONS OF RULE 46A. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR HOLDING THAT MACHINE WAS PUT TO USE PRIOR TO THE CLOSE OF T HE FINANCIAL YEAR AND THEREFORE ASSESSEE WAS ENTITLED TO CLAIM FOR DEPRECIATION AT 25%. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 1 ST DECEMBER, 2009. SD/- SD/- (C.L.SETHI) (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 01.12.2009. VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT DEPUTY REGISTRAR ITA-448/D/2009 4