ASHTECH (INDIA) P.LTD, MUMBAI V. DCIT 4(1), MUMBAI

ITA 4986/MUM/2015

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7340 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 06-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAV
• Assessee Lawyers: UTTAM CHAND BOTHARA
• Keywords: Depreciation; Rectification of order; Additional depreciation; Revised return
• Section: 143(3); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH A, MU MBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.4986/MUM/2015 (ASSESSMENT YEAR- 2010-11) ASHTECH (INDIA) PVT. LTD. ASHTECH HOUSE, 30 POPAT WADI, KALBADEVI ROAD, MUMBAI -400002 PAN:AAECA4133B VS. ITO WARD- 10(3)(4) MUMBAI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI UTTAM CHAND BOTHARA (AR) REVENUE BY : SHRI RAJESH KUMAR YADAV (DR) DATE OF HEARING : 12.02.2018 DATE OF PRONOUNCEMENT : 27.04.2018 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. THE INSTANT APPEAL BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF COMMISSIONER (APPEALS)-9, MUMBAI, DATED 24 TH JULY 2015 FOR ASSESSMENT YEAR 2010-11, WHICH IN TURN ARISES FROM THE ORDER DATED 10 TH SEPTEMBER 2014 PASSED BY ASSESSING OFFICER UNDER SECTION 154 OF INCOME-TAX ACT (ACT). THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL; 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS)-9 AS WELL AS THE ASSESSING OFFICER HAS ERRED IN LAW AS WELL AS UNDER THE CIRCU MSTANCES OF THE CASE IN CONFIRMING THE DISALLOWANCE OF DEPRECIATION AMOUNTING TO RS. 2 8,25,562/- ON PURCHASE OF TRUCKS BETWEEN THE PERIOD FROM 01.01.2009 TO 31.03.2009. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS)-9 AS WELL AS THE ASSESSING OFFICER HAS ERRED IN LAW AS WELL AS UNDER THE CIRCU MSTANCES OF THE CASE IN CONFIRMING THE DISALLOWANCE OF DEPRECIATION AMOUNTING TO RS. 2 8,25,562/- MADE BY ASSESSING OFFICER. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS ENGAGE D IN THE BUSINESS OF TRADING & PROCESSING OF FLY ASH AND ALSO SELLING THE SAME IN THE INDIAN AND INTERNATIONAL ITA NO. 4986/MUM/2015 - ASHTECH (INDIA) PVT. LTD. 2 MARKET, FILED ITS RETURN OF INCOME FOR ASSESSMENT Y EAR 2010-11 ON 15 TH OCTOBER 2010 DECLARING TOTAL INCOME OF RS. 4,92,95,300/-. T HE ASSESSMENT WAS COMPLETED ON 25 TH FEBRUARY 2013 UNDER SECTION 143(3) OF THE ACT. WHI LE PASSING ASSESSMENT ORDER, THE ASSESSING OFFICER MADE CERTAI N DISALLOWANCE, WHICH INCLUDES TRANSPORTATION CHARGES OF RS. 5,96,000/- S UBSEQUENTLY, THE ASSESSEE BROUGHT TO THE NOTICE OF ASSESSING OFFICER THAT THE ASSESSEE HAS FILED REVISED RETURN OF INCOME ON 30 TH MARCH 2012 AND THAT THE ASSESSING OFFICER HAS NOT CONSIDERED THE REVISE RETURN WHILE COMPUTING THE AS SESSMENT ON 25 TH FEBRUARY 2013. THEREFORE, THE ASSESSING OFFICER ISSUED NOTIC E UNDER SECTION 154 OF THE INCOME TAX ACT. IN THE NOTICE THE ASSESSING OFFICER MENTIONED THE DEPRECIATION ON WRITTEN DOWN VALUE OF VEHICLES IS ALLOWABLE ONLY @ 30%, HOWEVER, IT WAS WRONGLY ALLOWED @ 50% WHILE PASSING THE ASSESSMENT ORDER. THUS, EXCESS DEPRECIATION WAS ALLOWED TO THE EXTENT OF RS.28,25, 562/-. THEREFORE, THE ASSESSING OFFICER MADE ADDITION OF RS. 28,25,562/- ON ACCOUNT OF ADDITIONAL DEPRECIATION INITIALLY ALLOWED BY HIM. AGGRIEVED, B Y THE ORDER OF ASSESSING OFFICER, THE ASSESSEE FILED APPEAL BEFORE COMMISSIO NER (APPEALS), WHEREIN THE ACTION OF ASSESSING OFFICER WAS CONFIRMED. THUS, FU RTHER AGGRIEVED BY THE ORDER OF COMMISSIONER (APPEALS) THE ASSESSEE HAS FILED PR ESENT APPEAL BEFORE US. 3. WE HAVE HEARD LD. AUTHORIZED REPRESENTATIVE (AR) OF THE ASSESSEE AND THE LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE AN D PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD AR OF THE ASSESSEE ARGU ED THAT DURING THE RELEVANT PERIOD RELATED WITH THE ASSESSMENT YEAR UNDER CONSI DERATION, THE ASSESSEE ITA NO. 4986/MUM/2015 - ASHTECH (INDIA) PVT. LTD. 3 PURCHASED NEW COMMERCIAL VEHICLE AMOUNTING TO RS. 1 ,88,37,082/- AND ACCORDINGLY, DEPRECIATION AT THE RATE OF 50% WAS CL AIMED AND WAS ALLOWED BY THE ASSESSING OFFICER. THE FINDING OF THE ASSESSING OFF ICER THAT EXCESS DEPRECIATION WAS ALLOWED TO THE ASSESSEE IS WRONG. THE ASSESSEE PURCHASED THE VEHICLES DURING THE PERIOD FROM 1 ST DAY OF JANUARY 2009 TO 31 ST MARCH 2009. THE ASSESSEES CASE IS COVERED UNDER ENTRY NO. 3(3) (VI A) OF THE DEPRECIATION SCHEDULE UNDER THE RULES. THE VEHICLE WAS PUT TO US E BEFORE 31 ST MARCH 2009 FOR THE PURPOSE OF BUSINESS. ALL THESE FACTS WERE BROUG HT TO THE NOTICE OF ASSESSING OFFICER VIDE LETTER DATED 25 TH AUGUST 2014, DURING THE COURSE OF PROCEEDING INITIATED UNDER SECTION 154 OF THE ACT. HOWEVER, TH E ASSESSING OFFICER HAS NOT CONSIDERED THESE FACTS WHILE PASSING RECTIFICATION ORDER. THE LD. AR FOR THE ASSESSEE SUBMITTED THAT NO EXCESS DEPRECIATION WAS CLAIMED BY THE ASSESSEE. THE LD. COMMISSIONER (APPEALS) HAS NOT APPRECIATED THE FACT IN HOLDING THAT DURING THE ASSESSMENT PROCEEDING, THE ASSESSEE HAS NOT BRO UGHT TO THE NOTICE OF THE ASSESSING OFFICER ABOUT THE REVISE RETURN OF INCOME AND VARIOUS OTHER CLAIMS AND/OR THE ASSESSEE HAS NOT DISCHARGE ITS OBLIGATIO N. FURTHER, THE FINDING OF LD. COMMISSIONER (APPEALS) THAT NO MATERIAL WAS AVAILAB LE ON RECORD TO DISPROVE THE FINDING OF ASSESSING OFFICER ABOUT THE EXCESS D EPRECIATION. THE LD AR FOR THE ASSESSEE SUBMITS THAT THE ASSESSEE VIDE ITS WRITTEN SUBMISSION, IT WAS BROUGHT TO THE NOTICE OF LD CIT(A), THAT CBDT VIDE ITS NOTIFIC ATION NO. 10/20109 DATED 19.01.2009 AMENDED THE APPENDIX 1, IN PART A RELAT ED TO TANGIBLE ASSET, WHICH WAS AGAIN AMENDED VIDE NOTIFICATION NO.37/2009[F.NO .142/01/2009-TPL] DATED ITA NO. 4986/MUM/2015 - ASHTECH (INDIA) PVT. LTD. 4 21.04.2009, BY VIRTUE OF THESE TWO NOTIFICATION A F URTHER CATEGORY AS NO.(VIA) UNDER THE HEAD PLANT AND MACHINERY WHICH INCLUDE CO MMERCIAL VEHICLE WAS CREATED. BY VIRTUE OF THESE TWO NOTIFICATIONS ANY C OMMERCIAL VEHICLE PURCHASED DURING THE PERIOD 01 ST JANUARY2009 TO 30 TH SEPTEMBER 2009 IS ELIGIBLE FOR DEPRECIATION @50%, THEREFORE, THE ASSESSEE CLAIMED 50% OF 50% (25%) DEPRECIATION OF COMMERCIAL VEHICLE PURCHASED DURING 01 JANUARY 2009 TO 31 ST MARCH 2009 FOR USE OF LESS THAN 182 DAYS. ON THE CO NTRARY, THE LD. DR FOR THE REVENUE SUPPORTED THE ORDER OF AUTHORITIES BELOW. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PART IES AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE ASSESSING OFFI CER WHILE PASSING THE ORDER UNDER SECTION 154 CONCLUDED THAT THE DEPRECIATION W AS ALLOWABLE AT 30% OF OPENING WRITTEN DOWN VALUE OF VEHICLE, WHEREAS THE ASSESSEE WAS ALLOWED 50% DEPRECIATION, THUS, EXCESS DEPRECIATION OF RS. 28,2 5,562/- WAS ALLOWED TO THE ASSESSEE. THEREFORE, THE ASSESSING OFFICER DISALLOW ED THE EXCESS DEPRECIATION OF RS. 28,25,562/-. THE LD. COMMISSIONER (APPEALS) WHI LE CONSIDERING THE CONTENTION OF THE ASSESSEE CONCLUDED THAT THE ASSES SEE SHOULD HAVE BROUGHT TO THE NOTICE OF THE REVISED RETURN OF INCOME AND VARIOUS CLAIM DURING THE ASSESSMENT PROCEEDING. THE ASSESSEE HAS NOT DISCHARGED ITS OBL IGATION AND THAT WITHDRAWAL OF EXCESS DEPRECIATION IS IN ORDER. WE HAVE NOTED T HAT THE ASSESSEE HAS FILED COPY OF AUDIT REPORT UNDER FORM 3CA, FINANCIAL STATEMENT FOR THE YEAR ENDED ON 31.03.2009. COPY OF AUDIT REPORT FOR YEAR ENDED ON 31.03.2010 AND STATEMENT SHOWING PURCHASE OF TRUCKS DURING THE PERIOD FROM 0 1.10.2008 TO 31.03.2009. ITA NO. 4986/MUM/2015 - ASHTECH (INDIA) PVT. LTD. 5 WE HAVE FURTHER NOTED THAT THE ASSESSING OFFICER HA S NOT PASSED SPEAKING ORDER WHILE PASSING ORDER UNDER SECTION 154 DATED 10.09.2 014. THE PERUSAL OF ASSESSMENT ORDER PASSED UNDER SECTION 143(3) DATED 25.02.2013 DOES NOT DISCLOSE ABOUT THE RATE OF ALLOWANCE/DISALLOWANCE O F DEPRECIATION ON WRITTEN DOWN VALUE OF VEHICLES. THE ASSESSING OFFICER DISAL LOWED THE ALLEGED EXCESS DEPRECIATION ONLY WHEN IT WAS BROUGHT TO THE NOTICE OF ASSESSING OFFICER THAT HE HAS NOT CONSIDERED THE REVISED RETURN OF INCOME WHI LE COMPLETING THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT DATED 25.02.2013. S IMILARLY, THE LD. COMMISSIONER (APPEALS) HAS NOT DISCLOSED AS TO WHIC H ONUS (OBLIGATION) WAS NOT DISCHARGED BY THE ASSESSEE. THE LD. AR OF THE ASSES SEE WHILE MAKING SUBMISSION VEHEMENTLY RELIED UPON COLUMN NO. III (III)(VIA) FO R APPENDIX-1 OF INCOME-TAX RULES AND CLAIMED THAT RATE OF DEPRECIATION IS 50% AND THE NOTIFICATION NO. 10/20109 DATED 19.01.2009 AMENDING THE APPENDIX 1, IN PARTA RELATED TO TANGIBLE ASSET, WHICH WAS AGAIN AMENDED VIDE NOTIFI CATION NO.37/2009 [F.NO.142/01/2009-TPL] DATED 21.04.2009, BY VIRTUE OF THESE TWO NOTIFICATION A FURTHER CATEGORY AS NO.(VIA) UNDER THE HEAD PLANT A ND MACHINERY WHICH INCLUDE COMMERCIAL VEHICLE WAS CREATED. 5. CONSIDERING THE FACT THAT THE LOWER AUTHORITY HAS N OT CONSIDERED THE CONTENTION OF THE ASSESSEE WHILE WITHDRAWING THE ALLEGED EXCESS D EPRECIATION, WE DEEM IT APPROPRIATE TO RESTORE THE ISSUE TO THE FILE OF ASS ESSING OFFICER TO CONSIDER THE CLAIM OF ASSESSEE AFTER CONSIDERING THE REVISED RET URN OF INCOME FILED BY ASSESSEE AND THE APPENDIX-1 OF INCOME-TAX RULES RELATED WITH DEPRECIATION ON WRITTEN ITA NO. 4986/MUM/2015 - ASHTECH (INDIA) PVT. LTD. 6 DOWN VALUE OF THE VEHICLE IN ACCORDANCE WITH NOTIFI CATION NO. 10/20109 DATED 19.01.2009 AMENDED THE APPENDIX 1, IN PARTA RELATE D TO TANGIBLE ASSET AND WITH AMENDED NOTIFICATION NO.37/2009 [F.NO.142/01/2 009-TPL] DATED 21.04.2009, WITH REGARD TO CATEGORY NO. (VIA) UNDE R THE HEAD PLANT AND MACHINERY WHICH INCLUDE COMMERCIAL VEHICLE. NEEDLE SS TO SAY THAT ASSESSING OFFICER SHALL GRANT OPPORTUNITY BEFORE PASSING THE ORDER IN ACCORDANCE WITH LAW. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH DAY OF APRIL 2018. SD/- SD/- ( G.S. PANNU ) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 27/04/2018 S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER (ASSTT.REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. C