ACIT, New Delhi V. M/s G SC Toughened Glass Pvt. Ltd., New Delhi

ITA 533/DEL/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4082 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 12-05-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 01-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MONA MOHANTY
• Assessee Lawyers: Y S BHATNAGAR
• Keywords: Depreciation; Assessment record

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : C : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI K.D. RANJAN, ACCOUNTANT MEMBER ITA NO.1250/DEL/2011 ITA NO.533/DEL/2011 ASSESSMENT YEARS : 2007-08 & 2006-07 ACIT, CIRCLE 12 (1), NEW DELHI. VS. M/S GSC TOUGHENED GLASS P. LTD., 802, ARJUN NAGAR, BHISAM PITAMAH MARG, NEW DELHI. PAN : AAACG0050D (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI Y.S.BHATNAGAR, CA REVENUE BY : SMT. MONA MOHANTY, SR. DR ORDER PER I.P. BANSAL, JUDICIAL MEMBER BOTH THESE APPEALS ARE FILED BY THE REVENUE. THEY A RE DIRECTED AGAINST TWO SEPARATE ORDERS PASSED BY THE CIT (A) DATED 9 TH NOVEMBER, 2010 AND 9 TH DECEMBER, 2010 FOR ASSESSMENT YEARS 2006-07 AND 2007- 08 RESPECTIVELY. ONE ISSUE IN BOTH THE APPEALS IS COMMO N. THESE APPEALS WERE ARGUED TOGETHER BY BOTH THE PARTIES AND, HENCE, FOR THE SAKE OF CONVENIENCE, THESE APPEALS ARE DISPOSED OF BY TH IS CONSOLIDATED ORDER. GROUNDS OF APPEAL READ AS UNDER:- ITA NO.1250/DEL/2011 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ORDER OF THE CIT(A) IS ERRONEOUS, PERVERSE, ILLEGAL AND AGAINST THE PROVISIONS OF LAW WHICH IS LIABLE TO B E SET ASIDE. ITA NO.1250 & 533/DEL/2011 2 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF R S. 31,78,746/- MADE BY THE AO ON ACCOUNT OF INSTALLATION O F PLANT & MACHINERY DURING THE YEAR. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS . 1,00,00/- (BY TYPOGRAPHICAL MISTAKE ONE 0 HAS BEEN MISSED AND THE AMOUNT IS ` 1,00,000/-) MADE BY THE AO ON ACCOUNT OF CONVEYANCE AND TRAVELING EXPENDITURE. 4. THE APPELLANT CRAVES LEAVE, TO ADD, ALTER OR AMEN D ANY GROUND OF APPEAL RAISED ABOVE AT THE T IME OF THE HEARING. ITA NO.533/DEL/2011 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 41,82,594/- MADE BY THE AO ON ACCOUNT OF DEPRECIATION ON PLANT & MACHINERY AS THE SAME WAS NOT PUT TO USE BEFORE 31.3.2006 AND HENCE THE LD. CIT(A) ERRED IN ALLOWING DEPRECIATION CLAIM. 2. THE APPELLANT CRAVES LEAVE, TO ADD, ALTER OR AMEND ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF HEARING. 2. GROUND NO.1 OF THE APPEAL FOR ASSESSMENT YEAR 2006- 07 AND GROUND NO.2 IN THE APPEAL FOR ASSESSMENT YEAR 2007-08 A RE COMMON GROUNDS RELATING TO DISALLOWANCE OF DEPRECIATION. TH E FACTS FOR ASSESSMENT YEAR 2006-07 ARE THAT ONE OF THE NEW PLANT A ND MACHINERY WAS INSTALLED IN RESPECT OF A NEW PRODUCT I.E., CURVE D GLASS BEING LAUNCHED FOR THE FIRST TIME BY THE ASSESSEE. FROM THE RECORDS, THE A.O. REVEALED THAT THERE WAS CERTAIN PECULIARITIES IN THE CLAIM OF THE ASSESSEE WITH REGARD TO THOSE MACHINERY AND PLANTS, THERE FORE, HE REQUIRED THE ASSESSEE TO SUBSTANTIATE ITS CLAIM FOR DEPREC IATION ON THE SAID MACHINERY AND PLANT ON THE GROUND THAT THEY WER E PUT TO USE DURING THE RELEVANT FINANCIAL YEAR. THE ASSESSEE FILED VARIOUS SUBMISSIONS AND RELIED UPON TWO EVIDENCES; FIRSTLY, THE I NSTALLATION CERTIFICATE AND SECONDLY; SALE INVOICE DATED 31 ST MARCH, 2006 IN ITA NO.1250 & 533/DEL/2011 3 RESPECT OF CURVED GLASS. THE ASSESSING OFFICER REJECTED THE CLAIM OF THE ASSESSEE ON THE FOLLOWING GROUNDS:- (I) THE SO CALLED INSTALLATION CERTIFICATE IS BASIC ALLY ACCEPTANCE PROTOCOL IN RESPECT OF HORIZONTAL ROLLER HEARTH FLAT GLASS TEMP ERING FURNACE. ON WHICH DATE OF 23.3.2006 IS MENTIONED BUT HAS NO IND EPENDENT VERACITY. (II) MERE INSTALLATION OF FURNACE IS NOT INDICATIVE OF I T BEING PUT TO USE OR OPERATIONALISED IN THE PRODUCTION LINE OF THE ASSES SEES BUSINESS. (III) COMING TO SALE INVOICE PRODUCED AS EVIDENCE O F COMMERCIAL PRODUCTION, IT IS TO BE NOTED THAT THIS IS SINGLE SALE INVOICE THAT TOO CLAIMED TO HAVE BEEN MADE ON 3.03.2006. SALE IS STATED TO BE MADE TO M/ S INDIA ALUMINIUM AND IS OF 2.1960 SQMT. OF VALUE RS. 1811/-. (IV) THE MINISCULE QUANTITY AND SMALL VALUE IN ISOLATION MAY NOT BE INDICATIVE OF ANY ABNORMALITY BUT WHEN SEEN IN CONTEXT OF FACT THAT BILL IS PREPARED AT 12.10 PM ON 31.03.2006 BUT DOES NOT HAVE ANY REMOVA L TIME . FURTHER, THERE IS NO TRANSPORT MENTIONED . THEREFORE, NOT ALLOWING ANY INDEPENDENT VERIFIABILITY. (V) FURTHER, UNDER NORMAL CIRCUMSTANCES PRODUCTION IT AT COMMERCIAL OR EVER TRIAL SCALE WAS TAKEN THEN IT CANNOT BE SAID OF HAV E BEEN ONLY OF THIS SPECIFIED QUALITY OF 3 PCS. ONLY. BECAUSE THERE IS NO FINISHED GOOD OF THIS NATURE IN STOCK OF 31.03.2006 . IN FACT IN SIMILAR POSITION OF NEW PRODUCT BEING GLAZED GLASS WHICH WAS ALSO STARTED IN MONTH OF MARCH, 2006. THERE IS ADEQUATE FINISHED GOOD STOCK REPETITIVE BI LLS ETC. SHOWING NORMAL FLOW OF PRODUCTION. BUT IN CASE OF THIS MACHINE & OUTPUT NO SUCH REGULARITY OR NORMAL INCIDENCE IS SEEN. (VI) FROM PRODUCTION OF THE UNIT PRODUCED THERE IS NO IN DICATION OF ANY SUCH SPECIFIC PRODUCT BEING MANUFACTURED OR PRODUCED BEF ORE 31.03.2006. (VII) THE NEXT BILL OF THIS PRODUCT IS ISSUED IN MONTH OF APRIL, 2006 AROUND 20 TH OR 21 ST I.E. GAP OF ALMOST ONE MONTH. THEREAFTER, IT IS AT REGULAR INTERVALS. THEREFORE, GENUINENESS AND CRE DIBILITY OF CLAIM ON BASIS OF ONE ISOLATED BILL OF INSIGNIFICANT QUANTITY CANNOT BE ACCEPTED. ITA NO.1250 & 533/DEL/2011 4 3. IN THIS MANNER, THE CLAIM OF THE DEPRECIATION OF THE ASSESSEE ON THE AFOREMENTIONED PLANT AND MACHINERY OF ` 41,82,5 95/- WAS DISALLOWED. IN THE STATEMENT OF FATS FILED BEFORE THE CIT (A), IT WAS SUBMITTED THAT THE EVIDENCE OF PLANT HAVING BEEN INST ALLED AND WAS FUNCTIONAL, COPY OF INSTALLATION REPORT SIGNED BY TEC HNICAL TEAM FROM CHINA, FINAL CHECKS AND TO OVERSEE THE SATISFACTORY WOR KING OF THE PLANT AND THE ASSESSEE ACCEPTING THE WORKING OF THE PLANT AS P ER SPECIFICATION WERE FILED. AS A FURTHER EVIDENCE, INV OICE FOR SALE OF CURVED GLASS (MANUFACTURED BY THE NEW PLANT) WAS ALSO F URNISHED. COPIES OF MANY OTHER INVOICES WERE ALSO FURNISHED WHICH DID NOT BEAR REMOVAL TIME, TRANSPORT SINCE DELIVERY OF SMALL OR DERS ARE TAKEN BY CUSTOMERS THEMSELVES. IT WAS EXPLAINED TO ASSESSING OFFICER THAT CURVED GLASS ITEMS WERE MANUFACTURED FOR THE FIRST TI ME AT UNIT-IV AND IT TAKES SOME TIME TO CREATE DEMAND IN THE LOCAL MARK ET FOR SALE OF SUCH AN ITEM. TO BE SPECIFIC, IT WAS SUBMITTED BEFORE THE CIT (A) THAT THE PLANT AND MACHINERY WERE IMPORTED FROM CHINA ON 24 TH DECEMBER, 2005 AND IT WAS ASSEMBLED AND INSTALLED BY THE ASSESSEE IN FEBRUARY, 2006. THE ASSESSEE WAITED TILL TECHNICAL TEAM FROM CHI NA ARRIVED IN MARCH, 2006 TO INSPECT THE INSTALLATION AND CARRIED T EST TO THE SATISFACTION OF BOTH THE PARTIES FOR SATISFACTORY PERFOR MANCE OF THE PLANT AS PER AGREED SPECIFICATION. THE GUARANTEE OF THE PLANT WAS TO COMMENCE AFTER THE INSPECTION AND SATISFACTION OF THE TECHNICIANS OF THE CHINESE SUPPLIERS OF THE PLANT REGARDING THE PROPE R INSTALLATION AND PERFORMANCE OF THE PLANT. FOR THAT PURPOSE VARIOUS T ESTS HAD TO BE CARRIED OUT BEFORE COMMENCEMENT OF THE GUARANTEE PE RIOD. AFTER CARRYING OUT THE TEST TO THE SATISFACTION OF BOTH THE PARTIES, VIZ., THE ASSESSEE AND THE SUPPLIER OF THE PLANT AS REGARDS THE PERF ORMANCE OF THE PLANT TO THE AGREED SPECIFICATIONS, GUARANTEE WAS SIGNED BY THE CHINESE PARTIES ON 23 RD MARCH, 2006 AND THE ASSESSEE ACCEPTED THE PLANT AS FULLY FUNCTIONAL TO ITS SATISFACTION. BY 23 RD MARCH, 2006 THE PLANT WAS NOT ONLY INSTALLED, BUT WAS ALSO FULLY FUNCTI ONALLY PERFORMING ITA NO.1250 & 533/DEL/2011 5 TO THE TECHNICAL SPECIFICATIONS OF THE ASSESSEE AND THE T ECHNICAL TEAM FROM CHINA. SO AS IT RELATES TO THE EVIDENCE, REFERE NCE WAS MADE TO THE PURCHASES MADE WITH REGARD TO THE PLANT AND MACHI NERY AND THE LAST PURCHASE WAS MADE ON 17 TH JANUARY, 2006 AND 18 TH JANUARY, 2006. REGARDING THE VISIT OF TECHNICAL TEAM OF THE MANUFAC TURER FROM CHINA VISITING THE ASSESSEES UNIT-I, NAVI MUMBAI IN MARCH, 200 6 WHICH HAS CARRIED OUT AN ACCEPTANCE TEST WAS BACKED BY THE ACCE PTANCE PROTOCOL CERTIFICATE DATED 23 RD MARCH, 2006 SIGNED BETWEEN THE MANUFACTURER OF THE PLANT, NAMELY, LUOYANG NORTH GLASS TECHNOLOGY CO. LTD., CHINA AND THESE EVIDENCES WERE PART OF THE ASSESSMENT RECORD. THE EXPENDITURE REGARDING THE VISIT OF CHINA TEAM FOR THE PURPOSE OF HANDING OVER THE INSTALLED PLANT ARE ALSO SHOWN IN THE BOOKS OF ACCOUNT. THE GUARANTEE PERIOD COMMENCED FROM 23 RD MARCH, 2006. THE SALE OF THE ASSESSEE WAS MADE ON 31 ST MARCH, 2006 VIDE SALE INVOICE NO. 5442 M/S INDIA ALUMINIUM 6, IDEAL APARTMENTS, AIKAL COMPOUND, J.B N AGAR, ANDHERI (EAST). THE EXCISE DUTY WAS PAID ON THE SALE WHICH IS P ART OF EXCISE RETURN FILED ON 10 TH APRIL, 2006. THE COPY WAS ALSO SUBMITTED TO THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS ACCEPTED THE SA LES IN THE SALES TURNOVER AND REFERRING TO ALL THESE EVIDENCES, IT WAS SUBMITTED THAT THE PLANT OF THE ASSESSEE WAS PUT TO USE AND, THEREF ORE, THE CLAIM OF DEPRECIATION WAS IN ACCORDANCE WITH THE LAW. LD. CIT (A) CONSIDERING ALL THESE EVIDENCES HAS RETURNED A FINDING THAT BY PLA CING THESE EVIDENCES ON THE RECORD THE ASSESSEE HAS ADEQUATELY DISCHA RGED ITS ONUS IN PROVING THE ADMISSIBILITY OF DEPRECIATION OF ` 41,82,594/- AND HE HAS DELETED THE DISALLOWANCE VIDE PARA 4 OF THE IM PUGNED ORDER. 4. SIMILARLY, FOR ASSESSMENT YEAR 2007-08, THE DEPRECIA TION CLAIMED IS IN RESPECT OF NEW PLANT MICROPROCESSOR BASED CONTROL SYSTEM; FLAMELESS FURNACE (ELECTRICALLY HEATED); GLASS LOADING/ UNLOADING CONVEYOR FOR GLASS TEMPERING PLANT AND GLASS QUENCHING UNIT IMPORTED FROM CHINA FOR MANUFACTURE OF BENT GLASS FOR AUTOMOB ILES. ACCORDING ITA NO.1250 & 533/DEL/2011 6 TO THE ASSESSING OFFICER, THERE WAS CERTAIN DOUBTS WITH R EGARD TO THE MACHINERY BEING USED DURING THE YEAR UNDER CONSIDERAT ION. HE REQUIRED THE ASSESSEE TO SUBMIT THE EVIDENCES WITH REGARD TO THE SAME. THE ASSESSEE IN ITS SUBMISSION RELIED UPON INVOICES FO R PURCHASE OF MACHINERY, BILL OF ENTRY, ETC. AND A CER TIFICATE DATED 30 TH MARCH, 2007 FROM THE SUPPLIER OF MACHINERY AND PLANT . HOWEVER, THE CLAIM WAS REJECTED BY THE ASSESSING OFFICER ON THE FOLLO WING GROUNDS:- (I) IT IS EVIDENT FROM THE CERTIFICATE DATED 30.3.2 007 ISSUED BY M/S NORTHGLASS TECHNOLOGY INDUSTRIAL CO. LTD., SHANGHAI , CHINA THAT THE PLANT WAS COMMISSIONED ONLY ON 28.3.2007 AND ALSO THE CERTIFICATE HAS NO INDEPENDENT VERACITY. (II) THE PLANT COMMISSIONED ONLY ON 28.3.2007 CANNOT BE EXPECTED TO BEGIN COMMERCIAL PRODUCTION BY 31.3.200 7 & MERE INSTALLATION OF FURNACE AND OTHER MACHINERY IS N OT INDICATIVE OF IT BEING PUT TO USE OR OPERATIONALISED IN THE PRODUCTION LINE OF THE ASSESSEES BUSINESS. (III) NO EVIDENCE HAS BEEN FILED BY THE ASSESSEE, TO IND ICATE THAT ANY GOODS WERE ACTUALLY MANUFACTURED/PRODUCED BY THE USE OF THE NEW PLANT & MACHINERY OR THAT IT WAS ACTUALLY WAS PUT TO USE FOR THE PURPOSE OF BUSINESS OF ASSESSEE ON OR BEFORE 31.3.2007. (IV) IN THE IMMEDIATELY PRECEDING YEAR, I.E. A.Y. 2 006-07 ALSO CLAIM OF ASSESSEE FOR DEPRECIATION U/S 32(1)(II) & 32(1) (IIA) FOR A SIMILAR PLANT IMPORTED FROM CHINA WAS DENIED IN THA T YEAR. 5. IN THIS MANNER, HE DISALLOWED A SUM OF ` 31,78,746/ -. BEFORE THE CIT (A) THE ASSESSEE RELIED UPON THE FOLLOWING FACTS AND EVIDENCES PRODUCED BEFORE THE ASSESSING OFFICER TO JUSTIFY ITS CLAI M:- 1. MACHINERY FOR THE PLANT WAS IMPORTED IN JANUARY, 20 07. ITA NO.1250 & 533/DEL/2011 7 2. THE TECHNICAL TEAM OF THE SUPPLIERS OF THE PLANT FROM CHINA VISITED THE APPELLANTS UNIT AT NAVI MUMBAI IN MARCH, 2007 AND INS TALLED AND COMMISSIONED THE PLANT. THE CERTIFICATE DATED 30.3.2007 ISSUED BY MANUFACTURER OF THE PLANT I.E. SHANGHAI NORTH GLASS TEC HNOLOGY INDUSTRIAL CO. LTD. IS A PART OF THE ASSESSMENT RECORD. IT STATES THAT THE PLANT IS FULLY INSTALLED AND COMMISSIONER BY THE ENGIN EERS OF THE SUPPLIER AT MUMBAI AND IS READY FOR PRODUCTION SINCE 28.3.2007. 3. THE APPELLANT HAS BOOKED EXPENDITURE IN ITS BOOKS O F ACCOUNT RELATING TO THE VISIT FOR THE CHINESE TEAM FROM 14.3.2007 TO 29.3. 2007 FOR THE PURPOSE OF INSPECTING THE PLANT & MACHINERY INSTALLED B Y THE APPELLANT. 4. AS EVIDENCE OF MANUFACTURING/PRODUCTION CARRIED OUT ON THIS PLANT, THE FOLLOWING DETAILS AND EVIDENCES WERE FILED BEFORE THE ASSESSING OFFICER:- SALE SALE SALE SALE INVOICE INVOICE INVOICE INVOICE NO. NO. NO. NO. DATED DATED DATED DATED PARTICULARS PARTICULARS PARTICULARS PARTICULARS AMOUNT AMOUNT AMOUNT AMOUNT SOLD TO SOLD TO SOLD TO SOLD TO 6683 31.3.2007 3.5MM CLEAR BEND GLASS 12318.00 M/S AUTO WINDOW 6670 29.3.2007 5MM CLEAR FLOAT TOUGHENED 2618.31 M/S WESTERN GLASS 6648 29.3.2007 5MM CLEAR FLOAT TOUGHENED 129002.26 M/S SUYOG INDUSTRIES 6647 29.3.2007 5MM CLEAR FLOAT TOUGHENED 6134.96 M/S SUYOG INDUSTRIES 6621 28.3.2007 4MM EXTRA CLEAR TOUGHENED GLASS 64724.00 M/S ADVANSYS (INDIA) PVT. LTD. 5. EXCISE DUTY HAS BEEN PAID ON THE SALES WHICH IS A PART OF THE EXCISE RETURN FILED ON 10.4.2006 AND COPY OF THE SAME IS PAR T OF ASSESSING OFFICERS ASSESSMENT RECORD. 6. THE ASSESSING OFFICER HAS ACCEPTED THE SALES IN THE SALES TURNOVER. SALES ONLY POSSIBLE IF MANUFACTURING CARRIED OUT ON TH IS SPECIFIC PLANT. 6. RELYING UPON THE AFOREMENTIONED EVIDENCE AND THE FACTS, LD. CIT (A) HAS RETURNED A FINDING THAT THE ASSESSEE IS ENTITLED TO GET DEPRECIATION. HE OBSERVED THAT CERTIFICATE DATED 30 TH MARCH, 2007 CLEARLY INDICATED THAT THE PLANT WAS READY FOR USE ON 28 TH MARCH, 2007 AND THERE IS NO MATERIAL ON RECORD OF THE ASSESSING OFFI CER TO PROVE THAT THE CERTIFICATE IS FALSE AND THE PLANT WAS NOT RE ADY TO USE ON 28 TH ITA NO.1250 & 533/DEL/2011 8 MARCH, 2007. IN FACT, THE ASSESSING OFFICER HAS ACCEPTE D THAT THE FURNACE AND OTHER MACHINERY IS FULLY INSTALLED. THUS, HE OBSERVED THAT THE ASSESSEE IS ENTITLED TO GET DEDUCTION OF DEPRECIATIO N AS PER THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF P ANACEA BIOTECH LTD. 324 ITR 34 WHEREIN DEPRECIATION WAS HELD TO BE ALLOWED EVEN ON THE BASIS WHEN THE MACHINERY IS READY FOR USE. HE HAS A LSO RETURNED A FINDING THAT THE ASSESSEE HAS ALSO BEEN BALE TO LEAD EVID ENCE TO PROVE THAT THE PLANT HAD BEEN PUT TO USE ON OR BEFORE 31 ST MARCH, 2007 IN THE FORM OF SALE INVOICES, THE EXCISE RETURN, THE SALES-TAX RETURN WHICH SUBSTANTIATE THE PRODUCTION OF THIN BENT CLASS. HE ALSO REFERRED TO HIS EARLIER ORDER IN RESPECT OF ASSESSMENT YEAR 2006-07 W HEN ON SIMILAR FACTS THE CLAIM REGARDING DEPRECIATION WAS ALL OWED. IN THIS MANNER, HE HAS HELD THAT DEPRECIATION IS ALLOWABLE TO THE ASSESSEE. 7. AFTER NARRATING THE FACTS, IT WAS PLEADED BY LD. D R THAT THE ASSESSEE HAS NOT BEEN ABLE TO PROVE THAT THE INSTALLED PL ANTS AND MACHINERY WERE IN FACT PUT TO USE DURING THE RELEVAN T YEARS AND, THUS, THE ASSESSING OFFICER WAS RIGHT IN DISALLOWING THE DEPREC IATION CLAIMED BY THE ASSESSEE. 8. ON THE OTHER HAND, RELYING UPON THE FINDINGS RECO RDED BY LD. CIT (A) AND THE EVIDENCES PRODUCED BEFORE THE ASSESSING OFFI CER, IT WAS SUBMITTED BY LD. AR THAT LD. CIT (A) HAS RIGHTLY ALLO WED THE CLAIM OF THE ASSESSEE. HE RELIED UPON THE RECENT DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF BHARAT ALUMINIUM CO. VS. CIT, TH E DECISION DATED 15 TH OCTOBER, 2009 REPORTED AS 187 TAXMAN 111 (DEL), WHE REIN THE DEPRECIATION WAS DISALLOWED ON THE GROUND OF NON-OPER ATION OF PLANT AND MACHINERY. IT WAS THE CASE OF THE REVENUE THAT U NLESS ASSESSEE PUT TO USE THAT MACHINERY, THE DEPRECIATION IS NOT AL LOWABLE. THEIR LORDSHIPS AFTER EXAMINING THE VARIOUS PROVISIONS HAVE CO ME TO A CONCLUSION THAT AFTER THE CONCEPT OF BLOCK OF ASSETS, T HE EXPRESSION ITA NO.1250 & 533/DEL/2011 9 USED FOR THE PURPOSE OF BUSINESS, WHEN APPLIED TO BLOC K OF ASSETS, WOULD MEAN USE OF BLOCK OF ASSET AND NOT ANY SPECIFIC B UILDING, MACHINERY, PLANT OR FURNITURE IN THE SAID BLOCK OF A SSETS AS NEW ASSETS HAVE LOST THEIR IDENTITY AFTER BECOMING INSEPARABLE P ART OF THE BLOCK OF ASSETS AND IT WAS HELD THAT THE ASSESSEE HAS RIGHTLY BEEN PR OVIDED WITH THE BENEFIT OF DEPRECIATION. 9. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. AFTER APPRECIATION O F THE RELEVANT EVIDENCES PLACED ON RECORD, LD. CIT (A) HAS ARRIVED A T A CONCLUSION THAT THE CLAIM OF THE ASSESSEE REGARDING USER OF THE ASSETS WAS SU PPORTED BY EVIDENCE AND THE ASSESSEE HAD PUT TO USE THOSE PLANT A ND MACHINERY. NO CONTRARY MATERIAL HAS BEEN BROUGHT ON RECORD BY THE REVENUE TO SHOW THAT SUCH FINDINGS OF LD. CIT (A) ARE CONTRARY TO THE FACTS EXISTING ON RECORD. THE ASSESSEE NOT ONLY HAS PRODUC ED THE EVIDENCE OF INSTALLATION OF THE MACHINERY AND CERTIF ICATE GIVEN BY THE INSTALLER, BUT ALSO HAS PRODUCED THE SALE INVOICES SHOWIN G THAT PRODUCTION WAS ALSO DONE THOUGH AT A SMALL LEVEL. ALL THESE EVIDENCES HAVE BEEN DISCUSSED BY CIT (A) IN HIS ORDER. THESE EVIDE NCES WERE ALSO PRODUCED BEFORE THE ASSESSING OFFICER. THEREFORE, NO M ATERIAL BEING PLACED ON RECORD BY THE REVENUE TO CONTROVERT THOSE FINDINGS, WE ARE OF THE OPINION THAT LD. CIT (A) HAS RIGHTLY GRANTED THE BENEFIT OF DEPRECIATION TO THE ASSESSEE. MOREOVER, IN ACCORDANCE WITH THE AFOREMENTIONED DECISION OF HONBLE DELHI HIGH COURT, WHEN IT APPLIES TO BLOCK OF ASSETS WHEN THE PLANT AND MACHINERY HAS BECOME PART AND PARCEL OF BLOCK OF ASSETS, THEN, IT WILL LOSE ITS IDENTI TY AND, THUS, ALSO THE CLAIM OF THE ASSESSEE IS ALLOWABLE. THEREFORE, WE FIND N O INFIRMITY IN THE ORDER OF THE CIT (A) VIDE WHICH NECESSARY RELIEF HAS BEEN GIVEN TO THE ASSESSEE FOR BOTH THE YEARS. WE DECLINE TO INTERFER E AND BOTH THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ITA NO.1250 & 533/DEL/2011 10 10. IN THE RESULT, BOTH THE APPEALS FILED BY THE DEPA RTMENT ARE DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 12.05.20 11. SD/- SD/- [K.D. RANJAN] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 12.05.2011. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES