DCIT, New Delhi V. M/s. NTPC Sail Power Co. (P) Ltd., New Delhi

ITA 5299/DEL/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0810 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2012-2013
• Appeal Filed On: 26-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL
• Assessee Lawyers: P N SHASTRI ADVO
• Keywords: Depreciation; Additional depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES F : DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA.NO.5299/DEL./2015 ASSESSMENT YEAR 2012-2013 THE DCIT, CIRCLE-18(2), ROOM NO.212, C.R. BUILDING, I.P. ESTATE, NEW DELHI. VS M/S. NTPC SAIL POWER CO. (P) LTD., 4 TH FLOOR, NBCC TOWER, 15-BHIKAJI CAMA PLACE, NEW DELHI 110066. PAN AABVN5467A (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI SURENDER PAL, SR. D.R. FOR ASSESSEE : SHRI M.P. RASTOGI, AND SHRI P.N. SHASTRI, ADVOCATES. DATE OF HEARING : 1 4 .09.2018 DATE OF PRONOUNCEMENT : 1 4 .09.2018 ORDER PER BHAVNESH SAINI, J.M. THIS APPEAL BY REVENUE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-6, DELHI, DATED 05.06.2015, FOR THE A.Y. 2012-2013, CHALLENGING THE ORDER OF THE LD. CIT(A) IN 2 ITA.NO.5299/DEL./2015 M/S. NTPC SAIL POWER CO. (P) LTD., NEW DELHI. ALLOWING ADDITIONAL DEPRECIATION UNDER SECTION 32(1)(IIA) OF THE I.T. ACT, 1961. 2. THE LD. CIT(A) NOTED THAT APPEAL IS FILED BEFORE HIM AGAINST DISALLOWING CLAIM OF ADDITIONAL DEPRECIATION OF RS.823.50 LAKHS. ASSESSEE-COMPANY CLAIMED ADDITIONAL DEPRECIATION ON PLANT AND MACHINERY PURCHASED FOR THE POWER GENERATION PLANTS LOCATED AT DIFFERENT PLACES. ALL THE UNDERTAKINGS ARE ENGAGED IN GENERATION OF POWER. A.O. OBSERVED THAT FROM PLAIN READING OF SECTION 32(1)(IIA) OF THE I.T. ACT, 1961, IT IS EVIDENT THAT BENEFIT AVAILABLE ONLY TO THOSE UNDERTAKINGS WHICH ARE ENGAGED IN THE BUSINESS OF MANUFACTURING OR PRODUCTION OF ANY ARTICLE OR THING. IN VIEW OF THE ABOVE, A.O. HELD THAT GENERATION OF POWER DOES NOT AMOUNT TO MANUFACTURE OR PRODUCTION OF ANY ARTICLE OR THING, THEREFORE, THE BENEFIT OF ADDITIONAL DEPRECIATION IS NOT AVAILABLE TO THE UNDERTAKINGS ENGAGED IN GENERATION OF POWER. ACCORDINGLY, A.O. DISALLOWED THE CLAIM OF ASSESSEE. 3 ITA.NO.5299/DEL./2015 M/S. NTPC SAIL POWER CO. (P) LTD., NEW DELHI. 3. LD. CIT(A) NOTED THAT THE ABOVE ISSUE HAVE BEEN DECIDED BY THE ITAT IN THE CASE OF NTPC VS. DCIT IN ITA.NO.1438/DEL./2009 FOR THE A.Y. 2005-2006 VIDE ORDER DATED 30.04.2012, IN WHICH IT WAS HELD THAT GENERATION OF POWER AMOUNTS TO PRODUCTION OF AN ARTICLE OR THING. THE LD. CIT(A) FOLLOWING THE SAME ORDER, ALLOWED THE ADDITIONAL DEPRECIATION TO THE ASSESSEE. 3.1. LEARNED COUNSEL FOR THE ASSESSEE, AT THE OUTSET, SUBMITTED THAT SIMILAR ISSUE HAVE BEEN DECIDED BY THE ITAT, E- BENCH IN THE CASE OF SAME ASSESSEE FOR THE A.Y. 2011-2012 IN ITA.NOS.5687 & 6501/DEL./2014 VIDE ORDER DATED 27.04.2018 AND THE DEPARTMENTAL APPEALS HAVE BEEN DISMISSED ON THIS GROUND. THE FINDING OF THE TRIBUNAL IN PARA 9.1 OF THE ABOVE ORDER IS REPRODUCED AS UNDER : 9.1. COMING TO GROUND NO. 2 OF THE DEPARTMENT'S APPEAL WHICH PERTAINS TO DISALLOWANCE OF ADDITIONAL DEPRECIATION, WE FIND THAT THIS ISSUE IS ALSO COVERED IN FAVOUR OF THE ASSESSEE BY ORDER OF THE ITAT DELHI BENCH IN 4 ITA.NO.5299/DEL./2015 M/S. NTPC SAIL POWER CO. (P) LTD., NEW DELHI. THE CASE OF NTPC LTD. VS. DCIT IN ITA NO. 1438/2009 WHEREIN ITAT DELHI BENCH HAD PLACED RELIANCE ON THE JUDGMENT OF THE HON'BLE APEX COURT IN THE CASE OF STATE OF ANDHRA PRADESH VS. NTPC AND HAD HELD THAT 'ELECTRICITY' WOULD FALL UNDER THE DEFINITION OF GOODS AS GIVEN IN ARTICLE 366 (12) OF THE CONSTITUTION OF INDIA. THE HON'BLE APEX COURT, IN THIS CASE, HAD OBSERVED THAT 'GOODS' MEANS ALL KINDS OF MOVEABLE PROPERTIES AND MERELY BECAUSE ELECTRICAL ENERGY WAS NOT TANGIBLE OR CANNOT BE MOVED OR TOUCHED, IT CANNOT CEASE TO BE MOVEABLE PROPERTY. THE COORDINATE BENCH OF ITAT WENT ON TO HOLD THAT ADDITIONAL DEPRECIATION CANNOT BE DENIED TO THE ASSESSEE MERELY ON THE GROUND THAT ELECTRICITY IS NOT AN ARTICLE OR THING. ACCORDINGLY, RESPECTFULLY FOLLOWING THE ORDER OF THE COORDINATE BENCH IN THE CASE OF NTPC VS. DCIT (SUPRA), WE HOLD THAT THE LD. COMMISSIONER OF INCOME TAX (A) HAD RIGHTLY DIRECTED THE DELETION OF DISALLOWANCE WITH RESPECT TO ADDITIONAL DEPRECIATION. ACCORDINGLY, GROUND NO. 2 RAISED BY THE DEPARTMENT STANDS DISMISSED. 5 ITA.NO.5299/DEL./2015 M/S. NTPC SAIL POWER CO. (P) LTD., NEW DELHI. 3.2. HE HAS, THEREFORE, SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE. COPY OF THE ORDER IS PROVIDED TO THE LD. D.R. WHO HAS ALSO STATED THAT ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL. 4. CONSIDERING THE ABOVE, WE FIND THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE VIDE ORDER DATED 27.04.2018 (SUPRA). FOLLOWING THE SAME ORDER, WE DISMISS THE DEPARTMENTAL APPEAL. 5. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (L.P. SAHU) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI, DATED 14 TH SEPTEMBER, 2018 VBP/- 6 ITA.NO.5299/DEL./2015 M/S. NTPC SAIL POWER CO. (P) LTD., NEW DELHI. COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT F BENCH 6. GUARD FILE // BY ORDER // ASST. REGISTRAR : ITAT DELHI BENCHES : DELHI.