DCIT RG 8(1), MUMBAI V. GARWARE CHEMICALS LTD, MUMBAI

ITA 5887/MUM/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 72009 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2009-2010
• Appeal Filed On: 27-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C P PATNAIK
• Keywords: Business income; Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH G , MUMBAI BEFORE SHRI D. KARUNAKARA RAO , ACCOUNTANT MEMBER AND SHRI SANJAY GARG , JUDICIAL MEMBER ITA NO. 5887/M/2012 ASSESSMENT YEAR: 2009 - 10 DCIT, RG. - 8(1), R. NO.260A, 2 ND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400020 VS. M/S. GARWARE CHEMICALS LTD. GARWARE HOUSE, WESTERN EXPRESS HIGHWAY, VILE PARLE (E), MUMBAI 400 057 PAN: AABCG2467M (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VIJAY MEHTA REVENUE BY : SHRI K.C.P. PATNAIK, CIT, DR DATE OF HEARING : 26.11. 2013 DATE OF PRONOUNCEMENT : 31.12.2013 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A) DATED 0 2.07.12 RELEVANT TO ASSESSMENT YEAR 2009 - 10. THE GROUND S OF APPEAL READ ARE UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE OF DEPRECIATION OF RS.5,70,54,060/ - ON PLANT AND MACHINE RY. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE OF DEPRECIATION OF RS.5,70,54,060/ - ON PLANT AND MACHINERY, WITHOUT APPRECIATING THAT THE ASSESSEE HAD NOT USED THE PLANT AND MACHINERY FOR ANY BUSINESS CARRIED OUT BY IT DURING THE RELEVANT YEAR. ITA NO .5887/M/2012 M/S. GARWARE CHEMICALS LTD. 2 2. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO OBSERVED THAT THE AO OBSERVED THAT THE ASSESSEE CLAIMED DEPRECIATION RS.5,70,54,060/ - ON PLANT & MACHINERY. THE AO DISALLOWED THE CLAIM O F THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAS NOT CARRIED OUT ANY BUSINESS ACTIVITY DURING THE YEAR. THE AO HAS PLACED RELIANCE ON THE ANNUAL REPORT WHEREIN IT HAS BEEN MENTIONED THAT THE PLANT OPERATIONS HAD BEEN SUSPENDED IN THE FINANCIAL YEAR RELE VANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. ON APPEAL, THE LD. CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE BY HOLDING THAT THE ASSETS WERE ALREADY USED FOR THE PURPOSE OF BUSINESS AND ENTERED IN THE BLOCK OF ASSETS, THEN EVEN THOUGH THEY ARE NOT USED TE MPORARILY FOR THE REASON OF A LULL OR SLOWDOWN THE DEPRECIATION ON THIS CAN NOT BE DISALLOWED. LD. CIT(A) HAS PLACED RELIANCE ON SERIES OF DECISIONS OF THE HONBLE HIGH COURTS AND HONBLE SUPREME COURT ON THIS POINT. THE REVENUE IS THUS IN APPEAL BEFORE US. 3. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH THE PARTIES AND ALSO HAVE GONE THROUGH THE RECORDS. AT THE OUTSET THE LD. A.R. HAS SUBMITTED THAT THE IDENTICAL ISSUE CAME INTO CONSIDERATION OF THE TRIBUNAL IN THE CASE OF THE ASSESSEE ITSELF FOR TH E EARLIER YEAR I.E. ASSESSMENT YEAR 2008 - 09 IN ITA NO.1478/M/12 DECIDED ON 08.11.13. WHILE DEALING WITH THE IDENTICAL ISSUE THE TRIBUNAL HAS UPHELD THE FINDING OF THE CIT(A) DELETING THE ADDITIONS MADE BY THE AO ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION ON PLANT & MACHINERY. 4. LD. A.R. HAS FURTHER SUBMITTED THAT THE ISSUE UNDER CONSIDERATION IS SQUARELY COVERED WITH THE FINDINGS OF THE TRIBUNAL GIVEN IN EARLIER YEAR ON IDENTICAL ISSUE IN THE CASE OF ASSESSEE ITSELF. THE RELEVANT FINDINGS/CONCLUDING ITA NO .5887/M/2012 M/S. GARWARE CHEMICALS LTD. 3 PARA OF THE ORDER DATED 08.11.13 FOR THE SAKE OF CONVENIENCE IS REPRODUCED AS UNDER: 5.4 HAVING CONSIDERED THE RIVAL SUBMISSIONS AND PERUSING ALL RELEVANT RECORD WE NOTE THAT THE ASSESSEE HAS SHOWN INCOME FROM JOB - WORK OF BIO - DIESEL WHICH HAS BEEN ASSESS ED BY AO AS BUSINESS INCOME. THERE IS NO ADDITION IN PLANT AND MACHINERY DURING THE YEAR. THEREFORE, WE DO NOT FIND ANY SUBSTANCE IN THE CONTENTION OF THE LD. DEPARTMENTAL REPRESENTATIVE THAT SEPARATE PLANT AND MACHINERY MIGHT HAVE BEEN USED. THEREFORE, IT IS MANIFEST FROM THE RECORDS THAT PLANT AND MACHINERY HAS BEEN USED FOR THE JOB - WORK OF MANUFACTURING OF BIO - DIESEL. FURTHER, IT IS SETTLED LEGAL PROPOSITION THAT DEPRECIATION HAS TO BE ALLOWED ON BLOCK OF ASSETS AND ONCE THE PLANT AND MACHINERY IS PA RT OF ASSETS THEN FOR THE REASON OF TEMPORARY NON - UTILISATION OF THE PLANT AND MACHINERY DEPRECIATION CAN NOT BE DENIED. WE FIND THAT PLANT AND MACHINERY HAS BEEN USED BY THE ASSESSEE FOR ITS BUSINESS PURPOSE. THEREFORE, THERE IS NO JUSTIFICATION FOR DEN YING THE CLAIM OF DEPRECIATION. ACCORDINGLY WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A) QUA THIS ISSUE. 5. A PERUSAL OF THE ABOVE OBSERVATIONS MADE BY THE TRIBUNAL REVEALS THAT THE ISSUE UNDER CONSIDERATION IS SQUARELY COVERED B Y THE FINDINGS GIVEN BY THE TRIBUNAL AS REPRODUCED ABOVE IN THE OWN CASE OF THE ASSESSEE IN EARLIER YEARS. THE LD. D.R. COULD NOT BRING OUT ANY NEW FACT OR PROPOSITION OF LAW WHICH MAY JUSTIFY DEPARTURE FROM THE ABOVE FINDINGS GIVEN BY THE TRIBUNAL IN THE EARLIER YEAR. HENCE, RESPECTFULLY FOLLOWING THE SAME , THE ISSUE UNDER CONSIDERATION IS DECIDED IN FAVOUR OF THE ASSESSEE AND THE APPEAL OF THE REVENUE IS HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.12. 2013. SD/ - SD/ - ( D. KARUNAKARA RAO) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 31.12. 2013. * KISHORE ITA NO .5887/M/2012 M/S. GARWARE CHEMICALS LTD. 4 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMB AI THE CIT ( A) CONCERNED, MUMBAI THE DR C BENCH //TRUE COPY// [ BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.