DCIT, New Delhi V. M/s. YFC Projects Pvt. Ltd., New Delhi

ITA 5847/DEL/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4094 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2008-2009
• Appeal Filed On: 30-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Rule of consistency; Additional depreciation
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D: NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 5847/DEL /2014 ASSESSMENT YEAR: 2008-09 DCIT, CIRCLE-13(1), NEW DELHI. VS M/S YFC PROJECTS PVT. LTD., B-28, SHIVALIK, MALVIYA NAGAR, NEW DELHI. (PAN: AAACF1998B) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI HIREN MEHTA, CA RESPONDENT BY : SHRI AMIT JA IN, SR. DR DATE OF HEARING: 22.1.2018 DATE OF PRONOUNCEMENT : 23.1.2018 ORDER PER SUDHANSHU SRIVASTAVA, J.M. THIS APPEAL HAS BEEN PREFERRED BY THE DEPARTMENT AGAINST THE ORDER DATED 8.8.2014 PASSED BY THE LD. CIT(A)-XXI, NEW DELHI FOR ASSESSMENT YEAR 2008-09. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS IN THE BUSINESS OF CONSTRUCTION OF BUILDING, ROAD CONSTRUC TION AND ALSO IN THE BUSINESS OF MANUFACTURING OF READY MIXED CONCRETE (RMC). THE ASSESSEE HAD CLAIMED ITA NO. 5847/DEL/2014 ASSESSMENT YEAR 2008-09 2 ADDITIONAL DEPRECIATION U/S 32(1)(IIA) OF THE INCOM E TAX ACT, 1961 (HEREINAFTER CALLED 'THE ACT') ON PLANT A ND MACHINERY WHICH WERE USED FOR CONCRETE MANUFACTURIN G. THE ASSESSING OFFICER DENIED THE ADDITIONAL DEPRECI ATION MAINLY ON THE GROUND THAT THE ASSESSEE WAS IN THE CONSTRUCTION BUSINESS AND MANUFACTURING OF RMC CANN OT BE CALLED A MANUFACTURING ACTIVITY. THE ASSESSING OFFICER PROCEEDED TO DISALLOW ADDITIONAL DEPRECIATION OF RS . 39,56,478/-. ON APPEAL, THE LD. COMMISSIONER OF IN COME TAX(A) OBSERVED THAT THE ASSESSEES CASE WAS COVERE D IN FAVOUR OF THE ASSESSEE BY THE ORDER OF ITAT IN ASSE SSEES OWN CASE FOR ASSESSMENT YEAR 2004-05 AND 2007-08. THE LD. COMMISSIONER OF INCOME TAX(A) ALSO NOTED THAT T HE CIT(A) HAD ALSO FOLLOWED THE ORDER OF ITAT IN ASSES SMENT YEARS 2005-06 AND 2006-07. BASED ON PRINCIPLE OF CONSISTENCY AND JUDICIAL DISCIPLINE, THE LD. COMMIS SIONER OF INCOME TAX(A) DELETED THE DISALLOWANCE ON ACCOUN T OF ADDITIONAL DEPRECIATION AND NOW THE DEPARTMENT HAS APPROACHED THE ITAT AND HAS CHALLENGED THE DELETION . 3. AT THE OUTSET, THE LD. AR FILED A COPY OF ORDER PASSED U/S 143(3)/254 OF THE ACT WHEREIN VIDE ORDER DATED ITA NO. 5847/DEL/2014 ASSESSMENT YEAR 2008-09 3 31.3.2016 FOR ASSESSMENT YEAR 2008-09, THE ASSESSIN G OFFICER HAS ALLOWED THE ASSESSEES CLAIM OF ADDITIO NAL DEPRECIATION. THE LD. AR SUBMITTED THAT THE ASSESSI NG OFFICER HAD ALLOWED THE ASSESSEES CLAIM FOR ADDITI ONAL DEPRECIATION AFTER DULY EXAMINING THE CLAIM OF THE ASSESSEE SUBSEQUENT TO THE DIRECTIONS OF THE ITAT. HE DREW OUR ATTENTION TO PARAGRAPHS 3, 4 AND 5 OF THE ASSESSMENT ORDER DATED 31.3.2016 AND SUBMITTED THAT IN VIEW OF THE ASSESSMENT IN FAVOUR OF THE ASSESSEE, T HE PRESENT APPEAL OF THE DEPARTMENT HAD BECOME INFRUCTUOUS AND SHOULD BE DISMISSED. 4. IN RESPONSE, THE LD. SR. DR PLACED RELIANCE ON T HE ORIGINAL ASSESSMENT ORDER BUT COULD NOT NEGATE THE FACT THAT SINCE THE ASSESSING OFFICER HAS NOW ALLOWED TH E ASSESSEES CLAIM OF ADDITIONAL DEPRECIATION AND HAS ACCEPTED THE RETURNED INCOME, THE APPEAL OF THE DEPARTMENT HAD BECOME INFRUCTUOUS. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFF ICER HAS GIVEN THE FACTUAL MATRIX OF THE ENTIRE CASE IN PARAGRAPHS 1 TO 5 OF THE ASSESSMENT ORDER U/S ITA NO. 5847/DEL/2014 ASSESSMENT YEAR 2008-09 4 143(3)/254 OF THE ACT DATED 31.3.2016 AND THE SAME IS REPRODUCED HEREUNDER FOR READY REFERENCE:- RETURN OF INCOME FOR THE A.Y. 2008-09 WAS ELECTRONI CALLY FILED ON 29.09.2018 DECLARING TOTAL INCOME OF RS. 6,31,19,650/- WHICH WAS PROCESSED U/S 143(1). THE C ASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S 143(2) DAT ED 17.08.2009 WAS ISSUED AND DULY SERVED UPON THE ASSESSEE. SCRUTINY ASSESSMENT U/S 143(3) WAS COMPLETED ON 24.12.2010 AFTER MAKING THE CERTAIN ADDITIONS INCLUDING ADDITION OF RS. 39,56,478/- U/S 32(1)(IIA) ON ACCOUNT OF ADDITIONAL DEPRECIATION. T HE INCOME WAS ASSESSED AT AN INCOME OF RS. 6,72,60,690 /- ACCORDINGLY. 2. THE MATTER WAS ALREADY IN APPEAL BEFORE HON'BLE ITAT AS PER ITA NO. 4672/DEL/2007 DATED 15.01.2010 FOR THE A.Y. 2004-05 AS THE LD. CIT(A) HAD DISALLOWED T HE APPEAL OF THE ASSESSEE COMPANY FOR THE A.Y. 2004-05 . THE HON'BLE ITAT ALLOWED THE ASSESSEE'S APPEAL AND BEING AGGRIEVED, THE REVENUE PREFERRED AN APPEAL BE FORE THE HON'BLE HIGH COURT OF DELHI VIZ. ITA 508/2011 I N RESPECT OF A.Y. 2004-05, 2006-07, 2007-08, & 2008-0 9. FOR THIS YEAR, THE ID. CIT(A) VIDE ORDER NO. 194/10 -11 DATED 16.05.2011 ALLOWED THE ASSESSEE'S APPEAL AND DELETED THE ADDITION OF RS. 39,56,478/- U/S 32(1)(I IA) MADE ON ACCOUNT OF ADDITIONAL DEPRECIATION, IN VIEW OF THE PENDING APPEALS BEFORE THE HIGHER APPELLATE AUTHORI TIES. THE HON'BLE HIGH COURT VIDE ITA NO. 508/2011 DATED 24.10.2011 RESTORED BACK THE MATTER TO THE ITAT FOR LIMITED EXAMINATION TO ASCERTAIN WHETHER THE 'RMC' MANUFACTURED BY THE ASSESSEE WAS SOLD TO OUTSIDE PARTIES OR CONSUMED IN HOUSE AND IN THE LIGHT OF TH E DECISION OF HON'BLE SUPREME COURT IN THE CASE OF N. C. BUDDHIRAJA AND TO ALLOW ACCORDINGLY. THE APPEAL EFF ECT ORDER U/S 250/143(3) DATED 30.03.2012 HAS ASSESSED THE INCOME AT RS. 6,31,19,650/-. 3. ACCORDINGLY, THE HON'BLE ITAT FOLLOWING THE DIRECTIONS OF HON'BLE DELHI HIGH COURT VIZ. ITA 508 /2011 AND 901/2011 BOTH DATED 24.10.2011 HAS RESTORED THE MATTER BACK TO THE FILE OF THE AO FOR THE LIMITED P URPOSE OF ITA NO. 5847/DEL/2014 ASSESSMENT YEAR 2008-09 5 EXAMINATION AND VERIFICATION OF THE ISSUES RAISED T HEREIN AS PER THE ORDER DATED 23.01.2015. 4. ACCORDINGLY, NOTICE U/S 143(2) WAS ISSUED ON 19.11.2015 AND WAS DULY SERVED UPON THE ASSESSEE. T HE ASSESSEE WAS ASKED TO SUBMIT THE NECESSARY DETAILS AND DOCUMENTARY EVIDENCES TO SUBSTANTIATE ITS CLAIM REG ARDING THE ADDITIONAL DEPRECIATION CLAIMED U/S 32(1)(IIA) IN VIEW OF HON'BLE HIGH COURT DELHI & ITAT'S ORDER. IN RESPONS E TO THE NOTICE, THE ASSESSEE SUBMITTED THE ADDITIONAL EVIDE NCES VIDE LETTERS DATED 14.01.2016, DATED 29.03.2016 & D ATED 30.03.2016 DOCUMENTS THEREOF AND DETAILS/DOCUMENTS AS DESIRED TO VERIFY THE DIRECTIONS GIVEN BY THE HON'B LE ITAT AS SPECIFIC QUERIES WERE RAISED IN THIS REGARD. 5. ON PERUSAL OF DETAILS, SUBMITTED AND AFTER CONSIDE RING THE DIRECTIONS AS MENTIONED IN ITAT'S ORDER, THE IN COME IS ASSESSED AT RS. 6,31,19,650/-. CHARGE INTEREST U/S 234A, 234B, 234C, & 234D AS APPLICABLE AS PER THE PROVISI ONS OF THE IT ACT 1961. ISSUE NECESSARY FORMS I.E. ITNS, D EMAND NOTICE AND CHALLAN. 5.1 THUS, IT IS EVIDENT THAT THE ISSUE IS SETTLED IN FAVOUR OF THE ASSESSEE. WE AGREE WITH THE CONTENTIONS OF THE LD. AR THAT THE DEPARTMENTS APPEAL HAS BECOME INFRUCUTOUS AND WE A CCORDINGLY DISMISS THE GROUNDS RAISED BY THE DEPARTMENT. 6. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS D ISMISSED AS HAVING BECOME INFRUCTUOUS. ITA NO. 5847/DEL/2014 ASSESSMENT YEAR 2008-09 6 THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 23.1. 2018. SD/- SD/- (B.P. JAIN) (SUDHANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 23RD JANUARY, 2018 GS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER ASSISTANT REGISTRAR