DCIT, UDAIPUR V. M/s. Suresh Kumar Ram Chandra Saraf, UDAIPUR

ITA 552/JODH/2013

• Counselvise Citation: 55223314 RSA 2013
• Duration Of Justice: 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 04-03-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 09-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Assessee Lawyers: NEERAJ BHANDARI
• Keywords: Depreciation
• Section: 143(3); 133A

Judgement Text

1 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. 552/JODH/2013 (A.Y. 2010-11) THE DY. C.I.T., VS M/S SURESH KUMAR RAM CHANDRA SA RAF CENTRAL CIRCLE-1 [M/S ALANKAR JEWELLERS UDAIPUR. 35-36, MOTI CHOHHATA, NEAR GANTA GHAR UDAIPUR. PAN NO. AAKFS 0451 P (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI NEERAJ BHANDARI DEPARTMENT BY : SHRI N.A. JOSHI, DR. DATE OF HEARING : 04/03/2014. DATE OF PRONOUNCEMENT : 13/03/2014. O R D E R PER HARI OM MARATHA, J.M. : THIS APPEAL OF THE REVENUE, FOR A.Y. 2010-11, IS D IRECTED AGAINST THE ORDER OF LD. CIT(A), JAIPUR, DATED 03.10.2013. 2 2. THE ONLY EFFECTIVE GROUND RAISED IN THIS APPEAL READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 12 ,60,000/- MADE ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION ON CIVIL WORK, ELECTRICAL WORK AND INFRASTRUCTURE. 3. BRIEFLY STATED THE FACTS OF THIS GROUND ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME (ROI) FOR A.Y. 2010-11 ON 13.1 0.2010 DECLARING TOTAL INCOME OF RS. 1,68,31,754/-. SURVEY U/S 133A OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT', FO R SHORT] WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSEE ON 15. 1.2010. ASSESSMENT U/S 143(3) OF THE ACT WAS COMPLETED ON 20.3.2013 DE TERMINING TOTAL INCOME AT RS. 10,51,60,800/-. THE ASSESSEE CARRIES ON BUSINESS OF JEWELLERY AND HAS GOT INSTALLED A WIND-MILL THROUGH M/S SHRIRAM EPC LIMITED, AYANAMBAKKAM, CHENNAI. THE VALUE OF VARIO US WORK/ASSETS AND THE RATE OF DEPRECIATION APPLIED BY THE ASSESSE E TO CLAIM DEPRECIATION ARE AS UNDER: ITEM COST RATE OF DEPRECIATION SUPPLY OF SEPC 250 KV WIND ELECTRIC GENERATOR CONSISTING OF 40 MTS LATTICE TOWER, NACELLE ASEMBLY, ROTOR BLADES, CONTROL PANEL WITH MICROPROCESSOR, POWER PANEL, CONTROLLER, POWER CABLE INCLUDING 11/33 KV TRANSFORMER 8700000 80% 3 CIVIL WORK, ELECTRICAL WORK & INFRASTRUCTURE CHARGES FOR 250 KW WEG 3400000** 80% ERECTION & COMMISSIONING OF 250 KW WIND MILLS 200000 80% 3.1 DURING THE YEAR, THE ASSESSEE HAS CLAIMED 50% D EPRECIATION AND REMAINING 50% HAS BEEN CLAIMED IN THE NEXT YEAR. H OWEVER, THE A.O. HAS ALLOWED DEPRECIATION AS PER THE FOLLOWING CHART : ITEM COST ELIGIBLE RATE OF DEPRECI ATION DEPRECIA TION CLAIMED @80% DEPRECIA TION ALLOWABL E DIFFERENC E SUPPLY OF SEPC 250 KV WIND ELECTRIC GENERATOR CONSISTING OF 40 MTS LATTICE TOWER, NACELLE ASEMBLY, ROTOR BLADES, CONTROL PANEL WITH MICROPROCESSOR, POWER PANEL, CONTROLLER, POWER CABLE INCLUDING 11/33 KV TRANSFORMER 8700000 80% 348000 3480000 0 CIVIL WORK, ELECTRICAL WORK & INFRASTRUCTURE CHARGES FOR 250 KW WEG 3400000* * 10% 136000 170000 1190000 ERECTION & COMMISSIONING OF 250 KW WIND MILLS 200000 10% 80000 10000 70000 3660000 1260000 4 3.2 THE ASSESSEE HAS CLAIMED DEPRECIATION AT RS. 53 ,79,316/- WHICH INCLUDES DEPRECIATION ON WIND MILL AT RS. 49,20,000 /-. THE A.O. HAS ALLOWED DEPRECIATION ON WIND MILL AT RS. 36,60,000/ - RESULTING INTO DISALLOWANCE OF DEPRECIATION AT RS. 12,60,000/-. T HIS AMOUNT HAS BEEN ADDED BACK IN ASSESSEES INCOME. AGGRIEVED, THE AS SESSEE IS IN APPEAL AND THE LD. CIT(A) HAS DELETED THIS DELETION BY ALL OWING ENTIRE DEPRECIATION AS CLAIMED BY THE ASSESSEE AFTER FOLLO WING THE ORDER OF THE JODHPUR BENCH RENDERED IN THE CASE OF SHRI RAM HOTELS VS. ITO FOR A.Y. 2006 IN ITA NO. 591/JODHPUR/2008 WHEREIN THE F OLLOWING FINDING HAS BEEN GIVEN ON THIS SAME ISSUE: FROM THE ABOVE REFERRED DECISION, WE HOLD THAT THE ASSESSEE WILL BE ENTITLED TO DEPRECIATION @ 80@ ON THE CIVIL WORK CONSTRUCTION OF WINDMILL, FOUNDATION, TRANSFOR MER, CONTROL ROOM AND CRANE PLATFORM ETC. ON WHICH THE C OST IS TO BE ADOPTED BY THE A.O. AFTER GIVING OPPORTUNITY TO THE ASSESSEE. IN RESPECT OF OTHER CIVIL WORK LIKE ROAD ETC., THE ISSUE 5 IS SET ASIDE AS PER THE DECISION OF JODHPUR BENCH. CONSIDERING THE FUNCTIONAL TEST, WE FEEL THAT SUPPL Y AND INSTALLATION OF HT ELECTRICAL YARD AND TRANSMISSION LIME FORM WINDMILL TO GRID INTER CONNECTION POINT IS PAR T OF THE WINDMILL AND DEPRECIATION @ 80% WILL BE ADMISSIBLE ON THE INVESTMENT OF RS. 17,57,222/- ADOPTED BY THE A.O. THIS IS ON THE SAME PRINCIPLES ON WHICH ACCESSORIES TO THE 5 COMPUTED HAVE BEEN HELD TO BE ALLOWABLE FOR DEPRECI ATION @ 60% ADMISSIBLE ON COMPUTER. THUS, DEPRECIATION @ 80% ON CIVIL CONSTRUCTION WORK AND ELECTRICAL INSTALLATION ETC., HAS BEEN ALLOWED. AGAINST THIS F INDING, THE LD. CIT(A), THE REVENUE HAS COME IN APPEAL BY RAISING THE ABOVE EXTRACTED GROUND. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAR EFULLY PERUSED THE ENTIRE MATERIAL ON RECORD. THERE IS NO DISPUTE ABOUT THE FACTS OF THIS IS BETWEEN THE PARTIES. WE HAVE FOUND FOR A F ACT THAT THE IMPUGNED ISSUE STANDS FULLY COVERED IN FAVOUR OF TH E ASSESSEE BY THE ORDER OF THIS VERY BENCH RENDERED IN THE CASE OF SH RI RAM HOTELS [SUPRA] AND OTHER CASES. THEREFORE, BY RESPECTFULLY FOLLOWING THE ABOVE TRIBUNAL ORDER, WE DO NOT FIND ANY INFIRMITY IN THE FINDING OF THE LD. CIT(A). WHILE SITTING IN JODHPUR LD. CIT(A) AS WEL L AS THIS BENCH REQUIRED TO FOLLOW THE JURISDICTIONAL BENCH JUDGMEN TS IN THEIR LETTER AND SPIRIT UNLESS THEY ARE FOUND DISTINGUISHED ON F ACTS. THE A.O. HAS RELIED ON THE DECISION O OTHER BENCH FALLING IN ANO THER JURISDICTION. ACCORDINGLY, WE CANNOT ALLOW THIS GROUND OF APPEAL RAISED BY THE REVENUE. 6 5. IN THE RESULT, THIS APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH MARCH, 2014. SD/- SD/- [N.K. SAINI] [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER VL/ DATED : 13 TH MARCH, 2014. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. DR, ITAT, JODHPUR 6. GUARD FILE BY ORDER AR, ITAT, JODHPUR