ACIT, JODHPUR V. M/s.Shree Ram Industries, JODHPUR

ITA 518/JODH/2013

• Counselvise Citation: 51823314 RSA 2013
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 21-07-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 13-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Assessee Lawyers: U C JAIN SHRI GAUTAM BAID
• Keywords: Depreciation; Unabsorbed depreciation

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENCH : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 518 /JODH/2013 (A.Y. 200 9 - 1 0 ) A CIT, CIRCLE - 1, VS. M/S. SHREE RAM INDUSTRIES, JODHPUR . C - 80, II ND PHASE , MIA BASNI , JODHPUR. PAN NO. AACFS 7768 M (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI U.C. JAIN , SHRI GAUTAM BAID & SHRI RAJENDRA JAIN. DEPARTMENT BY : SHRI N.A. JOSHI - D.R. DATE OF HEARING : 21 / 0 7 /201 4 . DATE OF PRONOUNCEMENT : 25/ 0 7 /201 4 . O R D E R PER N.K. SAINI, A.M TH IS IS AN APPEAL BY THE DEPARTMENT AGAINST THE ORDER DATED 26 /0 8 /2013 OF L D . CIT(A), J ODHPUR . 2 REGISTRY POINTED OUT THAT TH IS APPEAL IS BARRED BY LIMITATION OF 11 DAYS. LEARNED D.R. SUBMITTED THAT THERE WAS NO DELAY IN FILING THE APPEAL BEFORE THE TRIBUNAL ON 13/11/2013. IT WAS SUBMITTED THAT THE 2 REGISTRY WRONGLY POINTED OUT THAT T HERE WAS DEL A Y IN FILING THE APPEAL BY THE DE PARTMENT BECAUSE THE DATE OF COMMUNICATION OF THE ORDER WAS WRONGLY MENTIONED IN COLUMN N O . 9 AS 03/ 09/2013 INSTEAD OF 30/09/2013. IT WAS , ACCORDINGLY , SUBMITTED THAT THE APPEAL FILED BY THE DEPARTMENT WAS WITHIN TIME AND THERE WAS NO DEL A Y. LEARNED COUNSEL FOR THE ASSESSEE COULD NOT CONTROVERT THE AFORESAID CONTENTION OF THE LEARNED D.R. ACCORDINGLY, APPEAL IS ADMITTED SINCE THERE IS NO DELAY IN FILLING THE APPEAL. 3. THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: - 1. THE LD. CIT(A) ERRED IN FOLLOWING THE ORDER OF HON'BLE ITAT IN THE CASE OF M/S. SHREE RAM GUM & CHEMICALS IN I.T.A.NO. 499/JU/2009 DATED 30/11/2011 FOR A.Y. 2006 - 07 SINCE, THE ISSUE INVOLVED IS NOT REGARDING RATE AT WHICH DEPRECIATION IS ALLOWABLE ON FOUNDATIO N AND OTHER CIVIL WORK OF WIND MILL BUT THE ISSUE IN PRESENT APPEAL WAS ALLOWING BROUGHT FORWARD UNABSORBED DEPRECIATION AS PER ASSESSMENT ORDER FOR A.Y. 2008 - 09 . 2. THE LD. CIT(A) HAS ERRED IN FOLLOWING ITATS ORDER IN CHOUDHARY FREIGHT CARRIER WHICH IN T URN FOLLOWED RAJASTHAN HIGH COURT ORDER IN CASE OF M/S. MEWAR OIL & GENERAL MILLS LTD. (271 ITR 311) WHICH ARE CLEARLY DISTINGUISHABLE SINCE IN THOSE CASES THERE IS CLEAR FINDING THAT DEPRECIATION OF EARLIER YEARS WERE SET OFF IN THOSE YEARS ITSELF AND THE RE WERE NO CARRIED FORWARD UNABSORBED DEPRECIATION WHILE IN THE PRESENT CASE THERE IS BROUGHT FORWARD UNABSORBED DEPRECIATION. 4. FIRST ISSUE VIDE GROUND NO. 1 RELATES TO THE ALLOW ANCE OF DEPRECIATION ON FOUNDATION AND OTHER CIVIL WORK OF WIND MILL. 3 5. FACTS RELATING TO THIS ISSUE, IN BRIEF, ARE THAT THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD SHOWN UNABSORBED BROUGHT FORWARD DEPRECIATION OF RS. 36,30,106/ - FOR A.Y. 2006 - 07 AND RS. 48,36,597/ - FOR THE A.Y. 2007 - 08. HOWEVER, AS PER ASSESSMENT ORDER FOR A.Y. 2008 - 09 THE SAME IS AT RS. 23,92,806/ - FOR A.Y. 2006 - 07 AND RS. 39,98,200/ - FOR A.Y. 2007 - 08 . ACCORDINGLY , EXCESS DEPRECIATION OF RS. 20,75,697/ - I.E. RS. 12,37 , 3 00 / - FOR A.Y. 2006 - 07 AND RS. 8,38, 397/ - FOR A.Y. 2007 - 08 CLAIMED BY THE ASSESSEE WAS DISALLOWED . 6 . BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED THAT THE ISSUE RELATING TO CLAIM OF DEPRECIATION HAD BEEN CONSIDERED BY THE ITAT IN THE CASE OF M/S. SHREE RAM GUM & CHEMICALS (THE ASSESSEE) I.T.A.NO 499/JU/2009 ORDER DATED 30/11/2011 FOR THE A.Y. 2006 - 07. THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, DIRECTED THE ASSESSING OFFICER TO RECALCULATE THE CLAIM OF DEPRECIATION IN THE LIGH T OF DECISION OF THE ITAT AND RECALCULATE THE ALLOWABLE DEPRECIATION ON THE WIND MILL. NOW THE DEPARTMENT IS IN APPEAL. 7 . AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES AND THE MATERIAL ON RECORD, WE ARE OF THE VIEW THAT THERE IS NO INFIRMI TY IN THE ORDER OF THE LD. CIT(A) WHO RIGH TL Y DIRECTED THE ASSESSING OFFICER TO 4 RECALCULATE THE DEPRECIATION AFTER GIVING EFFECT T O THE ORDER OF THE ITAT BECAUSE VIDE ORDER DATED 30/11/2011, DEPRECIATION WAS CHANGED FOR THE A.Y. 2006 - 07 WHICH HAD THE IMPACT ON THE DEPRECIATION FOR THE A.Y. 2007 - 08 . THE ASSESSEE BROUGHT FORWARD THE UNABSORBED DEPRECIATION FOR BOTH THE PRECEDING ASSESSMENT YEARS I.E. A.Y. 2006 - 07 & 2007 - 08 WHICH WAS C L AIMED AGAINST THE INCOME FOR THE YEAR UNDER CONSIDERATION AND AS THERE WAS CHANGE IN ACTUAL DEPRECIATION WHICH WAS TO BE ALLOWED AFTER GIVING APPEAL EFFECT OF THE ITAT ORDER DATED 30/11/2011 , T HE LD. CIT(A) RIGHTLY DIRECTED THE ASSESSING OFFICER TO ALLOW DEPRECIATION AFTER CONSIDERING THE DECI SION OF THE ITAT AND RECALCULATE THE ALLOWABLE DEPRECIATION ON THE WIND MILL. WE DO NOT SEE ANY INFIRMI TY IN THE ORDER OF THE LD. CIT(A) ON THIS ISSUE . 8 . THE NEXT ISSUE VIDE GROUND NO. 2 RELATES TO THE DEDUCTION U/S 80IA OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT IN SHORT) FROM THE PROFIT OF ELIGIBLE BUSINESS. 9 . FACTS RELATING TO THIS ISSUE, IN BRIEF, ARE THAT THE ASSESSEE CLAIMED THE DEDUCTION U/S 80IA OF THE ACT FOR A SUM OF RS. 17,90,010/ - FROM THE INCOME GENERATED ON WIND MILL. THE ASSESSING OFFICER HELD THAT BROUGHT FORWARD UNABSORBED DEPRECIATION WAS FIRST TO BE SET OFF AGAINST THE PROFIT OF THE ELIGIBLE BUSINESS AND THEN FROM THE BALANCE PROFIT DEDUCTION U/S 5 80IA OF THE ACT WAS TO BE ALLOWED. SINCE IN THE PRESENT CASE , THE PROFIT OF THE ELIGIBLE BUSINESS AGAINST WHICH BROUGHT FORWARD UNABSORBED DEPRECIATION WAS FIRST SET OFF AND AFTER SETTING OF THE BROUGHT FORWARD UNABSORBED DEPRECIATION THERE WAS NO PROFIT LEFT , T HE ASSESSING OFFICER REJECTED THE CLA IM OF THE ASSESSEE . 10 . BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) , WHO ALLOWED THE CLAIM OF THE ASSESSEE BY FOLLOWING THE DECISION OF THE ITAT JODHPUR BENCH DATED 04/07/2013 IN THE CASE OF M/S. CHOUDHARY FREIGHT CARRIERS VS. ACIT , CENTRAL CIRCLE - 1, JODHPUR IN I.T.A.NO. 441/JODH/2012 . NOW THE DEPARTMENT IS IN APPEAL. 11 . LEARNED D.R. ALTHOUGH SUPPORTED THE ORDER OF THE ASSESSING OFFICER, BUT COULD NOT CONTROVERT THE FINDINGS GIVEN BY THE LD. CIT(A) . IN HIS RIVAL SUBMISSIONS, LEARNED COUNSEL FOR THE ASSESSEE STRONGLY SUPPORTED THE ORDER OF THE LD. CIT(A) . 12. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE , IT IS NOTICED THAT THE LD. CIT(A) WHILE ALLOWING THE CLAIM OF THE ASSESSEE FOLLOWED THE DECI SI ON OF THIS BENCH OF THE TRIBUNAL IN THE CASE OF M/S. CHOUDHARY FREIGHT CARRIERS VS. ACIT , CENTRAL CIRCLE - 1, JODHPUR IN 6 I.T.A.NO. 441/JODH/2012 WHEREIN THE EARLIER ORDER OF THE ITAT JAIPUR BENCH IN THE CASE OF SAURABH AGROTECH (P) LTD. VS. DCIT REPORTED AT 48 T A X W ORLD PAGE 135 WAS FOLLOW E D. SINCE THE IMPUGNED ORDER HAS BEEN PASSED BY THE LD. CIT(A) IN CONSONANCE WITH THE DECISION OF THE ITAT JODHPUR AND THE JAIPUR BENCH ES , WE DO NOT SEE ANY MERIT IN THIS APPEAL OF THE DEPARTMENT ON THIS ISSUE. 13. MOREOVER, O N A SIMILAR ISSUE, THE HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS. EMERALD JEWEL INDUSTRIES (P) LTD. REPORTED IN ( 2011 ) 53 DTR (MAD.) 262 HELD THAT THE ASSESSEE - COMPANY IS ELIGIBLE FOR DEDUCTION U/S 80IA OF THE ACT IN RESPECT OF WIND MILL INSTALLED BY IT AND UNABSORBED DEPRECIATION OF THE EARLIER YEARS COULD NOT BE REDUCED FROM PROFIT FOR COMPUTING THE DEDUCTION U /S 80IA OF THE ACT. WE , THEREFORE, DO NOT SEE ANY MERIT IN THE DEPARTMENTAL APPEAL ON THIS ISSUE. 14 IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMISSED. ( ORDER PRONOUNCED IN THE COURT ON 25 TH JULY , 201 4) . SD/ - SD/ - ( HARI OM MARATHA ) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 25 TH JULY , 201 4 . 7 VR/ - COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD. CIT 4. THE CIT(A) 5. THE D.R SR. PRIVATE SECRETARY , ITAT, JODHPUR .