DCIT, Pondicherry V. M/s. 3-M Electro & Communication, Pondicherry

ITA 49/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58127 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2001-2002
• Appeal Filed On: 09-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 115JB; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER I.T.A. NO. 49/MDS/2012 A.Y. 2001-02 ASSESSEE BY : NONE DEPARTMENT BY : SHRI SHAJI P. JACOB, ADDL. CIT, DR DATE OF HEARING : 21.03.2012 DATE OF PRONOUNCEMENT : 23.03.2012 THE DY. C.I.T CIRCLE I PUDUCHERRY (APPELLANT) VS. M/S 3 M ELECTRO & COMMUNICATION INDIA PVT. LTD., [FORMERLY M/S POUYET IND. PVT. LTD] A-63 & 64, PIPDIC INDUSTRIAL ESTATE, METTUPALAYAM PONDICHERRY 605 009. PAN NO. AAACP 1896 N (RESPONDENT) 2 ITA NO. 49/MDS/2012 O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : ITA NO. 905/MDS/2009 IS AN APPEAL FILED BY THE REV ENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX(A)- XII, CHENNAI IN APPEAL NO. 203/08-09 DATED 28.10.2011 FOR ASSESSMEN T YEAR 2001- 02. 2. SHRI R.B. NAIK, CIT, D.R. REPRESENTED ON BEHALF OF THE REVENUE WHEREAS NONE APPEARED ON BEHALF OF THE ASSESSEE. 3. WHEN THE CASE WAS CALLED FOR HEARING TODAY I.E. 21. 03.2012, NONE APPEARED FOR AND ON BEHALF OF THE ASSESSEE. NO TICE OF HEARING OF THE APPEAL WAS SENT BY REGISTERED POST AND SERVE D ON THE ASSESSEE ON 14.01.2012. AS NONE REPRESENTED ON BEHA LF OF THE ASSESSEE, THE APPEAL IS BEING HEARD EX PARTE QUA TH E ASSESSEE. 3 ITA NO. 49/MDS/2012 4. IT WAS THE SUBMISSION OF THE LD. D.R. THAT THE A SSESSING OFFICER HAD MADE ADJUSTMENTS TO THE BOOK PROFITS U/S 115JB OF THE ACT BY DISALLOWING THE CLAIM OF EXCESS DEPRECIATION AS IT WAS NOTICED THAT THE DEPRECIATION ON THE BOOKS WAS PROVIDED ON STRAI GHT LINE METHOD WHICH WAS AT A HIGHER RATE THAN THAT SPECIFIED IN S CHEDULE XIV OF THE COMPANIES ACT. IT WAS THE SUBMISSION THAT THE A DJUSTMENTS BY DISALLOWING EXCESS CLAIM OF DEPRECIATION WAS DONE B Y ORDER U/S 154 OF THE ACT. IT WAS THE SUBMISSION THAT ON APPEAL, THE LD. CIT(A) HAD DELETED THE DISALLOWANCE BY HOLDING THAT STRAIGHT L INE METHOD IS ALSO A RECOGNIZED METHOD FOR CLAIMING DEPRECIATION. IT WAS THE SUBMISSION THAT THE ORDER OF THE LD. CIT(A) IS LIAB LE TO BE REVERSED. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS. IT IS NOTI CED THAT THE ISSUE IN REGARD TO THE APPLICABILITY OF STRAIGHT LI NE METHOD FOR COMPUTING DEPRECIATION U/S 115JB AT THE RATES SPECI FIED UNDER SCHEDULE XIV OF THE COMPANIES ACT IS A HIGHLY DEBAT ABLE ISSUE. IT IS FURTHER NOTICED THAT THE ISSUE IN DISPUTE HAS BEEN DECIDED BY THE HON'BLE SUPREME COURT IN THE CASE OF MALAYALA MANOR AMA VS. CIT REPORTED IN 253 ITR 378. FURTHER, IT IS NOTICED TH AT THE ISSUE IS 4 ITA NO. 49/MDS/2012 AGAIN BEFORE THE LARGER BENCH OF THE HON'BLE SUPREM E COURT IN THE CASE OF DYNAMIC ORTHOPEDICS REPORTED IN 321 ITR 300 . AS IT IS NOTICED THAT THE ISSUE IS A DEBATABLE ONE, IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF T.S. BALRA M VS. VOLKART BROTHERS REPORTED IN [1971] 82 ITR 50 [SC], THIS AD JUSTMENT CANNOT BE DONE IN A RECTIFICATION U/S 154 OF THE ACT. IT IS ALSO NOTICED THAT THE LD. CIT(A) HAS DWELLED ON THE ISSUE THAT IT IS A HIGHLY DEBATABLE ISSUE AND HAS HELD THAT IT CANNOT BE DEALT U/S 154 OF THE ACT. THIS FINDING OF THE LD. CIT(A) HAS ALSO NOT BEEN SPECIFI CALLY CHALLENGED. IN THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE O RDER OF THE LD. CIT(A) DOES NOT CALL FOR ANY INTERFERENCE. IN THE CIRCUMSTANCES, THE APPEAL OF THE REVENUE STANDS DISMISSED. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON 23 RD MARCH, 2012. SD/- SD/- (N.S. SAINI) (GEORGE MATHA N) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 23 RD MARCH, 2012. 5 ITA NO. 49/MDS/2012 VL COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A), CHENNAI (4) CIT, CHENNAI (5) D.R. (6) GUARD FILE