Sakthidharan Spintex Mills Pvt Ltd., Tiruchengode V. ACIT, Salem

ITA 549/CHNY/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73688 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 19-02-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 01-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARI RAO
• Assessee Lawyers: G BASKAR
• Keywords: Capital asset; Depreciation
• Section: 143(3)

Judgement Text

, , IN THE INCOME-TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . , . !' !' !' !' , # # # # $ $ $ $ BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI V. DURGA RAO, JUDICIAL MEMBER ./ I.T.A.NO.549/MDS/2013 # ' %' / ASSESSMENT YEAR:2008-09 M/S. SAKTHIDHARAN SPINTEX MILLS PVT. LTD., NO. 168/5-A, KOZHIKKALNATHAM ROAD, OPP. WEAVERS COLONY, TIRUCHENGODE 637 211. [PAN : AAHCS9035M] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE, SALEM. ( &' &' &' &' / APPELLANT ) ( ()&' ()&' ()&' ()&' / RESPONDENT ) &' * + / APPELLANT BY : SHRI G. BASKAR, ADVOCATE ()&' * + / RESPONDENT BY : SHRI HARI RAO, JCIT * , / DATE OF HEARING : 19.02.2014 -% * , /DATE OF PRONOUNCEMENT : 26.02.2014 . . . . / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), SALEM, DATED 29.01.2013 RELEVANT TO THE ASSESSMENT YEAR 2008-09. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S A PRIVATE LIMITED COMPANY, FILED ITS RETURN OF INCOME ADMITTING NIL I NCOME. THE RETURN FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.5 55 549 4949 49/M/ /M/ /M/ /M/13 1313 13 2 AND AFTER DUE PROCESS, THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT AND THE CLAIM OF THE ASSESSEE IN RESPECT OF DEPRECIATION ON THE COST OF PLANT AND MACHINERY OF ` .13,54,266/- WAS DENIED. THE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE HAS CLAIMED DEPRECIATION AT 40% ON ` .13,54,266/- IN RESPECT OF CONSIDERATION FOR PROVID ING EASY AND FREE ACCESS AND KEEPING THE AREA VACANT SURROUNDING THE LAND FO R WINDMILL PROJECT. SINCE THE ABOVE COST DOES NOT RELATE TO ANY MACHINERY OR ANY OTHER CAPITAL ASSET FOR WHICH DEPRECIATION IS ALLOWABLE, THE ABOVE COST WAS TREATED AS ONE NOT FORMING PART OF CAPITAL ASSET. ACCORDINGLY, THE DEP RECIATION CLAIMED @ 40% ON ` .13,54,266/-, WHICH WAS WORKED OUT TO ` .5,41,706/- WAS DISALLOWED BY THE ASSESSING OFFICER. 3. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFOR E THE LD. CIT(APPEALS) AND THE LD. CIT(APPEALS), CONFIRMED THE ORDER OF TH E ASSESSING OFFICER. 4. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASS ESSEE HAS KEPT SOME LAND VACANT ACCESS TO THE WIND MILL PLANT AND THERE FORE, IT HAS TO BE CONSIDERED AS PART AND PARCEL OF THE WIND MILL AND DEPRECIATION HAS TO BE GRANTED FOR THE CIVIL WORKS CARRIED ON BY THE ASSES SEE. 5. ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THA T THE ASSESSEE HAS NOT CARRIED ANY CIVIL WORK. IT IS ONLY A KATCHA VAC ANT LAND. 6. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE ONLY I SSUE INVOLVED IN THIS I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.5 55 549 4949 49/M/ /M/ /M/ /M/13 1313 13 3 APPEAL IS WHETHER THE ASSESSEE IS ENTITLED TO DEPRE CIATION ON THE LAND, WHICH IS KEPT VACANT ACCESS TO THE WIND MILL PLANT. ACCOR DING TO THE ASSESSEE, IT WAS A PAKKA ROAD CONSTRUCTED WITH BITUMEN AND ACC ORDING TO THE LD. DR, IT WAS ONLY A KATCHA LAND. THERE IS NOTHING ON RECORD TO SHOW THE NATURE OF LAND KEPT FOR ACCESS TO THE WINDMILL. THE LD. COUNS EL FOR THE ASSESSEE HAS ALSO REQUESTED THAT THE ISSUE MAY GO BACK TO THE AS SESSING OFFICER FOR VERIFICATION, FOR WHICH THE LD. DR HAS NOT SERIOUSL Y OBJECTED. THEREFORE, WE SET ASIDE THE ORDER PASSED BY THE LD. CIT(APPEALS) AND REMIT THE MATTER BACK TO THE ASSESSING OFFICER TO DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER NECESSARY VERIFICATION AND ENQUIRY OF THE VAC ANT LAND IN QUESTION WHETHER IT IS A PAKKA CONSTRUCTION WITH BITUMEN O R NOT. 07. IN THE RESULT, THE APPEAL FILED BY THE ASSESSE E IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON WEDNESDAY, THE 26 TH OF FEBRUARY, 2014 AT CHENNAI. SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (V. DURGA RAO) JUDICIAL MEMBER CHENNAI, DATED, THE 26.02.2014 VM/- TO: THE ASSESSEE/A.O./CIT(A)/CIT/D.R.