ANKITA KNITWEAR LTD, MUMBAI V. DCIT RG 9(1), MUMBAI

ITA 5648/MUM/2012

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7071 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 22-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 07-09-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAV
• Keywords: Depreciation; Additional depreciation
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH A, MU MBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.5648/MUM/2012 (ASSESSMENT YEAR- 2009-10) M/S ANKITA KNITWEAR LIMITED E-301, AMAZON CHSL, JAYRAJ NAGAR, OFF, LINK ROAD, BORIVALI (WEST),MUMBAI-400992. PAN: AABCA3859P VS. ACIT RANGE 9(1), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-20. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MAHESH SABOO (AR) REVENUE BY : SHRI RAJESH KUMAR YADAV (DR) DATE OF HEARING 01.05.2018 DATE OF PRONOUNCEMENT 31.05.2018 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. THIS APPEAL BY ASSESSEE UNDER SECTION 253 OF INCOME TAX ACT IS DIRECTED AGAINST THE ORDER OF COMMISSIONER (APPEALS) DATED 0 3 RD JULY 2012 IN THE MATTER OF ASSESSMENT ORDER PASSED UNDER SECTION 143 (3) DATED 30 TH DECEMBER 2012 FOR ASSESSMENT YEAR 2009-10. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE COMPANY I S ENGAGED IN THE MANUFACTURING OF TEXTILE, FILED ITS RETURN OF INCOM E FOR ASSESSMENT YEAR 2009-10 ON 21 SEPTEMBER 2009, DECLARING TOTAL INCOM E AT RS. NILL. THE ASSESSMENT WAS COMPLETED ON 30 TH DECEMBER 2012 UNDER SECTION 143(3). ITA NO. 5648/M/2012 ANKITA KNITWEAR LTD 2 THE ASSESSING OFFICER WHILE PASSING ASSESSMENT ORDE R BESIDES THE OTHER ADDITIONS AND DISALLOWANCE, DISALLOWED THE DEPRECIA TION OF RS. 1,12,38,348/-. ON APPEAL BEFORE LD. COMMISSIONER (A PPEALS) THE ACTION OF ASSESSING OFFICER WAS UPHELD. THEREFORE, FURTHER AG GRIEVED BY THE ORDER OF LD. COMMISSIONER (APPEALS) THE ASSESSEE HAS FILED P RESENT APPEAL BEFORE US. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF AP PEAL; (I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE AUTHORITIES BELOW HAVE ERRED IN DISALLOWING A SUM O F RS. 35,848/- UNDER SECTION 14A READ WITH RULE 8D AND THE REASONS ASSIGNED BY THEM WERE WHOLLY WRONG, AND NOT IN ACCORDANCE WITH THE FACTS OF THE CASE, AND IS AGAINST THE PROVISION OF IT ACT AN D RULES MADE HEREUNDER. (II) ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE AUTHORITIES BELOW HAVE ERRED IN NOT THE ADJUSTING T HE BROUGHT FORWARD BUSINESS AND DEPRECIATION LOSSES OF THE PRE VIOUS YEAR AMOUNTING TO RS.1,82,26,639/- WHICH IS NOT IN ACCOR DANCE WITH IT ACT AND RULES MADE THEREUNDER. (III) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE AUTHORITIES BELOW HAVE ERRED IN REJECTING THE GROUN D FOR NOT ALLOWING THE PROPER APPRECIATION TO WHICH THE APPEL LANT IS ENTITLED WITHOUT DUE AND PROPER VERIFICATION OF THE FACTS. T HE ASSESSING OFFICER HAS DISALLOWED THE DEPRECIATION OF RS. 1,12 ,38,348/- BEING THE DEPRECIATION ON THE TUFF MACHINES AND OTHER WHI CH IS CORRECTLY CALCULATED. NO WORKING OF THE DISALLOWANC E OR CALCULATION OF DEPRECIATION IS GIVEN IN THE ENTIRE ASSESSMENT O RDER, WHICH IS AGAINST THE PROVISION OF IT ACT AND RULES MADE THER E UNDER. (IV) ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE AUTHORITIES BELOW HAVE FURTHER ERRED IN NOT ALLOWIN G THE ADDITIONAL DEPRECIATION UNDER SECTION 32(1)(II) OF THE ACT, TO WHICH THE APPELLANT IS LEGITIMATELY ENTITLED AND THE REASONS, ASSIGNED BY THEM WERE WHOLLY WRONG, AND NOT IN ACCORDANCE WITH THE P ROVISIONS OF THE IT ACT AND RULES MADE THEREUNDER. ITA NO. 5648/M/2012 ANKITA KNITWEAR LTD 3 3. WE HAVE HEARD THE LEARNED AUTHORISED REPRESENTATIVE (AR) OF THE ASSESSEE AND LEARNED DEPARTMENTAL REPRESENTATIVE ( DR) FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AT TH E OUTSET OF HEARING THE LEARNED AR OF THE ASSESSEE SUBMITS THAT HE IS NOT P RESSING GROUND NO.1 & 2 RAISED IN THE PRESENT APPEAL. CONSIDERING THE SUB MISSION OF LEARNED AR OF THE ASSESSEE GROUND NO. 1 & 2 ARE DISMISSED AS N OT PRESSED. GROUND NO.3 AND 4 FOUR RELATES TO THE APPRECIATION ON TUFF MACHINES AND ADDITIONAL DEPRECIATION UNDER SECTION 32(1)(II). TH E LEARNED AR OF THE ASSESSEE SUBMITS THAT AFTER PASSING THE IMPUGNED OR DER BY LD COMMISSIONER (APPEALS), THE ASSESSING OFFICER PASSE D THE ASSESSMENT ORDER FOR EARLIER ASSESSMENT YEAR, I.E. FOR ASSESSM ENT YEAR 2008-09, UNDER SECTION 143(3) RWS 147, DATED 26 TH MARCH 2016. THE LD. AR FOR THE ASSESSEE PRAYED THAT THE WRITTEN DOWN VALUE (WDV) O F THE ASSETS CONSIDERED BY ASSESSING OFFICER WHILE PASSING THE A SSESSMENT ORDER FOR 2008-09 ON 26 TH MARCH 2016 BE TAKEN INTO CONSIDERATION BY ASSESSIN G OFFICER WHILE DISALLOWING THE DEPRECIATION FOR THE YEAR UNDER CONSIDERATION. THE LD. AR FOR THE ASSESSEE PRAYED T HAT THE GROUND NO.3 AND 4 MAY BE RESTORED TO THE FILE OF ASSESSING OFFI CER FOR VERIFICATION OF FACTS AND TO ALLOW THE DEPRECIATION BY CONSIDERING THE WDV OF ASSET TAKEN BY ASSESSING OFFICER WHILE PASSING THE ORDER FOR ASSESSMENT YEAR 2008-09 ON 26 TH MARCH 2016. THE LD. AR FOR THE ASSESSEE FILED COP Y OF ITA NO. 5648/M/2012 ANKITA KNITWEAR LTD 4 THE ASSESSMENT ORDER DATED ON RECORD. ON THE CONTRA RY THE LEARNED THE AR FOR THE REVENUE SUPPORTED THE ORDER OF COMMISSIONER (APPEALS). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PART IES AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES. THE ASSESSING OF FICER WHILE PASSING THE ASSESSMENT ORDER, ON THE BASIS OF THE RECORD OF ASS ESSMENT YEAR 2007-08 OBSERVED THAT THE ASSESSEE CLAIMED DEPRECIATION @ 5 0% ON THE PLANT AND MACHINERY USED IN WEAVING PROCESSING UNDER TECHNOLO GY UPGRADATION FUND SCHEME (TUFS). THE ASSESSEE CLAIMED TO HAVE PU RCHASED THAT MACHINE DURING THE FINANCIAL YEAR RELATED WITH ASSE SSMENT YEAR 2007-08 ON WHICH HIGHER RATE OF DEPRECIATION @50% WAS CLAIM ED. THE ASSESSEE GAIN CLAIMED DEPRECIATION @ 50% ON PLANT AND MACHIN ERY. THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF BLOCK OF ASSET ON WHICH THE DEPRECIATION WAS CLAIMED AND TO GIVE THE DETAILS OF LAST THREE YEARS HAVING OPENING WDV. THE ASSESSEE FILED ITS REPLY DATED 26. 12.2011. IN THE REPLY THE ASSESSEE CONTENDED THAT NO ADDITION TO THE BLOC K OF FIXED ASSET AND OR IN EARLIER YEARS THERE IS NO ADDITION. THE ASSESSIN G OFFICER ON THE BASIS OF RECORD OF ASSESSMENT YEAR 2007-08 RESTRICTED THE DE PRECIATION @15%. THE LD CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFF ICER HOLDING THAT THE ASSESSEE IS ENTITLED FOR DEPRECIATION @50% UNDER T ECHNOLOGY UPGRADATION FUND SCHEME (TUFS) ON ASSET PURCHASED O N OR AFTER 01.04.2001 AND PUT TO USE BEFORE 01.04.2001 AND IN THIS CASE THE ITA NO. 5648/M/2012 ANKITA KNITWEAR LTD 5 MACHINERY WAS PURCHASED AFTER THAT DATE. BEFORE US THE LD AR FOR THE ASSESSEE CONFINED HIS SUBMISSIONS THAT THE WDV FOR THE YEAR UNDER CONSIDERATION BE TAKEN FROM THE ASSESSMENT ORDER 20 07-08 DATED 26.03.2016 FOR WORKING OUT THE ENTITLEMENT OF DEPRE CIATION. IN OUR VIEW THE SUBMISSION OF LD. AR FOR THE ASSESSEE IS REASON ABLE, WHICH WE ACCEPT. CONSIDERING THE SUBMISSIONS OF THE LD AR FOR THE AS SESSEE THE GROUND NO.3 &4 ARE RESTORED TO THE FILE OF ASSESSING OFFIC ER, THE ASSESSING OFFICER IS DIRECTED TO CONSIDER THE WDV OF THE BLOCK OF AS SET OF PLANT AND MACHINERY AS TAKEN IN THE ASSESSMENT ORDER FOR 20 08-09 DATED 26.03.206 AND TO PASS THE ORDER AFRESH IN ACCORDANCE WITH LAW . NEEDLESS TO BEFORE PASSING THE ORDER THE ASSESSING OFFICER SHALL GRANT OPPORTUNITY OF HEARING TO THE ASSESSEE. IN THE RESULT THE GROUND NO.3 & 4 ARE ALLOWED FOR STATISTICAL PURPOSE. 5. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST DAY OF MAY 2018. SD/- SD/- (G.S. PANNU) (PAWAN SINGH) ACCOUNTANT MEMBER J UDICIAL MEMBER MUMBAI; DATED 31/05/2018 S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT.REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/