ACIT, Coimbatore V. M/s. Surya Spinning Mills, Pollachi

ITA 557/CHNY/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 4527 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 26-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P N KAMALA DEVI
• Keywords: Depreciation; Additional depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHENNAI BENCH D (SINGLE MEMBER CASE) BEFORE SHRI PRADEEP PARIKH, VICE-PRESIDENT I.T.A. NO. 556/MDS/2010 ASSESSMENT YEAR : 2007-08 THE ASST. COMMISSIONER OF INCOME-TAX SALARY CIRCLE RACE COURSE COIMBATORE. VS. SARAVANA SYNTHETIC AND COTTON MILLS LTD. SF NO.100, B-1, B-2 UNJAVELLAMPATTI POLLACHI-642 003. PAN AAFCS 8689 D (APPELLANT) BY SMT. P.N.KAMALA DEVI (RESPONDENT) BY NONE I.T.A. NO. 557/MDS/2010 ASSESSMENT YEAR : 2007-08 THE ASST. COMMISSIONER OF INCOME-TAX, SALARY CIRCLE-I 63 RACE COURSE, COIMBATORE-641 018. VS. M/S. SURYA SPINNING MILLS SF NO.49/1B UDUMALPET ROAD UNJAVELLAMPATTI POST POLLACHI-642 003. PAN AATFS 7756 A (APPELLANT) BY SMT. P.N. KAMALA DEVI (RESPONDENT) BY SHRI S. SRIDHAR O R D E R PER PRADEEP PARIKH, V.P. THESE TWO APPEALS BY THE DEPARTMENT ARE IN RESPECT OF TWO DIFFERENT ASSESSEES. THEY ARE AGAINST TWO SEPAR ATE ORDERS OF THE LD. CIT(A), BOTH DATED 11.1.2010 FOR 2 ITA 556 & 557 /10 ASSESSMENT YEAR 2007-08. SINCE BOTH THE APPEALS INV OLVED A COMMON ISSUE, THEY ARE BEING DISPOSED OF TOGETHER B Y THIS COMBINED ORDER FOR THE SAKE OF CONVENIENCE. THE GRI EVANCE OF THE DEPARTMENT IS AGAINST GRANT OF ADDITIONAL DE PRECIATION ON WIND ENERGY GENERATORS (WEG) UNDER SEC.32(1)(IIA ) OF THE ACT THE INCOME-TAX ACT, 1961 (THE ACT). 2. SARAVANA SYNTHETIC MILLS RUNS A TEXTILE MILL AND SURYA SPINNING MILLS MANUFACTURES POLYESTER COTTON YARN. THE TWO COMPANIES DECLARED A TOTAL INCOME OF RS.17,87,493/- AND LOSS OF RS.26,88,750/- RESPECTIVELY FOR THE YEAR UN DER CONSIDERATION. BOTH THE ASSESSEES HAD CLAIMED ADDIT IONAL DEPRECIATION ON WEG AT RS.10,57,000/- AND RS.26,43, 694/- RESPECTIVELY. THE ASSESSING OFFICER WAS OF THE VIEW THAT ADDITIONAL DEPRECIATION IS ALLOWABLE ONLY IF THE MA CHINERY IS USED IN THE MANUFACTURE OR PRODUCTION OF AN ARTICLE OR THING. ACCORDING TO HIM, THE ENERGY PRODUCED BY WEG CANNOT CONSTITUTE AN ARTICLE OR THING AND HENCE, THE CLAIM FOR ADDITIONAL DEPRECIATION WAS DISALLOWED. THE CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE BY RELYING ON THE JUDGMEN T OF THE MADRAS HIGH COURT IN THE CASE OF CIT V. HI TECH ARA I LTD. (321 ITR 477). 3. THE LD. D.R. RELYING ON THE ORDER OF THE ASSESSI NG OFFICER SUBMITTED THAT THE APPEALS HAVE BEEN FILED TO KEEP THE ISSUE ALIVE. THE LD. COUNSEL APPEARING FOR SURY A SPINNING MILLS RELIED ON THE AFORESAID JUDGMENT OF THE JURIS DICTIONAL HIGH COURT. 4. UNDISPUTEDLY, THE JUDGMENT OF THE MADRAS HIGH CO URT IS CLEARLY IN FAVOUR OF THE ASSESSEE IN WHICH THE C OURT HAS TAKEN NOTE OF THE FACT THAT THE ASSESSEE IN THAT CA SE HAD WIND MILLS WHICH GENERATED POWER AND GRANTED ADDITI ONAL 3 ITA 556 & 557 /10 DEPRECIATION CLAIMED BY THE ASSESSEE. RESPECTFULLY FOLLOWING THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT, THE ORDER OF THE CIT(A) IS UPHELD IN BOTH THE CASES. 5. IN THE RESULT, BOTH THE APPEALS OF THE DEPARTMEN T ARE DISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON 1-7-2010. SD/- (PRADEEP PARIKH) VICE-PRESIDENT CHENNAI, DATED THE 1 ST JULY, 2010 MPO* COPY TO : APPELLANTS/RESPONDENT/CIT/CIT(A)/DR