ASSISTANT COMMISSIONER OF INCOME TAX 15(2)(2), MUMBAI V. M/S. PRASOL CHEMICALS LIMITED, MUMBAI

ITA 5990/MUM/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5359 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 25-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILLIP
• Assessee Lawyers: Y P TRIVEDI AW MS USHA DALAL
• Keywords: Depreciation; Additional depreciation; Revised return
• Section: 32(1)(iia)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER ITA NO. 5990 / MUM . /201 7 ( ASSESSMENT YEAR : 20 1 4 15 ) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 15(2)(2) , MUMBAI . APPELLANT V/S M/S. PRASOL CHEMICALS LTD. PLOT NO.6, DATA MANDIR ROAD BHANDUP (W), MUMBAI 400 078 PAN AAACP2389N . RESPONDENT REVENUE BY : SHRI NEIL PHILLIP ASSESSEE BY : SHRI Y.P. TRIVEDI A/W MS. USHA DALAL DATE OF HEARING 16.05.2019 DATE OF ORDER 24.05.2019 O R D E R PER SAKTIJIT DEY. J.M. THE AFORESAID APPEAL HAS BEEN FILED BY THE REVENUE CHALLENGING THE ORDER DATED 30 TH JUNE 2017, PASSED BY THE L EARNED COMMISSIONER (APPEALS) 24 , MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 201 4 15 . 2 . THE ONLY DISPUTE IN THE PRESENT APPEAL IS WITH REGARD TO THE ALLOWANCE OF ASSESSEES CLAIM OF ADDITIONAL DEPRECIATION. 2 M/S. PRASOL CHEMICALS LTD. 3 . BRIEF FACTS ARE, IN THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR 2013 14 , THE ASSESSEE HAD PURCHASED SOME PLANT AND MACHINERIES WHICH WERE PUT TO USE FOR LESS THAN 180 DAYS. THEREFORE, THOUGH , ADDITIONAL DEPRECIATION @ 20% WAS OTHERWISE ALLOWABLE, HOWEVER, IT WAS ALLOWED @ 10%. IN THE IMPUGNED ASSESSMENT YEAR, THOUGH I N THE ORIGINAL RETURN OF INCOME, THE ASSESSEE DID NOT CLAIM THE BALANCE 10% OF THE ADDITIONAL DEPRECIATION CARRIED OVER FROM ASSESSMENT YEAR 2013 14, HOWEVER, THE ASSESSEE FILED A REVISED RETURN OF INCOME CLAIMING THE BALANCE 10% OF THE ADDITIONAL DEPRECIA TION AMOUNTING TO ` 68 LAKH. IN THE COURSE OF ASSESSMENT PROCEEDINGS, WHEN THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO JUSTIFY ITS CLAIM OF DEPRECIATION PERTAINING TO THE PRECEDING ASSESSMENT YEAR, THE ASSESSEE SUBMITTED THAT SINCE THE ADDITIONAL DEP RECIATION UNDER SECTION 32(1)(IIA) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ) IS ALLOWABLE @ 20% BUT IN THE ASSESSMENT YEAR 2013 14, IT WAS ALLOWED @ 10% , THE BALANCE 10% OF THE ADDITIONAL DEPRECIATION CAN BE ALLOWED IN THE IMPUGNED ASSESSMENT YEAR. IN SUPPORT OF SUCH CONTENTION, ASSESSEE RELIED UPON CERTAIN JUDICIAL PRECEDENTS. THE ASSESSING OFFICER, HOWEVER, DID NOT FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE AND HELD THAT THE ADDITIONAL DEPRECIATION PERTAINING TO THE PRECEDING ASSESSMENT YEAR CANNOT BE ALLOWED IN THE IMPUGNED ASSESSMENT YEAR. ACCORDINGLY, HE DISALLOWED THE ADDITIONAL 3 M/S. PRASOL CHEMICALS LTD. DEPRECIATION AMOUNTING TO ` 68 LAKH. THE ASSESSEE CHALLENGED THE DISALLOWANCE BEFORE T HE FIRST APPELLATE AUTHORITY . 4 . THE LEARNED COMMISSIONER (APPEALS) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE LIGHT OF THE JUDICIAL PRECEDENTS CITED BEFORE HIM, ALLOWED ASSESSEES CLAIM OF ADDITIONAL DEPRECIATION. 5 . WE HAVE CONSIDERED RIVAL SU BMISSIONS AND PERUSED THE MATERIAL ON RECORD. SHRI NEIL PHILLIP, THE LEARNED DEPARTMENTAL REPRESENTATIVE AND SHRI Y.P, TRIVEDI, THE LEARNED SR. COUNSEL FOR THE ASSESSEE HAVE AGREED BEFORE US THAT THE ISSUE IN DISPUTE IS COVERED BY VARIOUS CASE LAWS. UNDISP UTEDLY, IN THE ASSESSMENT YEAR 2013 14 THE ASSESSEE HAD PURCHASED SOME PLANT AND MACHINERY ON WHICH ADDITIONAL DEPRECIATION UNDER SECTION 32(1)(IIA) OF THE ACT WAS ALLOWABLE @ 20%. HOWEVER, SINCE THE ASSETS WERE PUT TO USE FOR A PERIOD OF LESS THAN 180 DAY S, DEPRECIATION WAS ALLOWED @ 50% OF THE RATE FIXED I.E., @ 10%. THE BALANCE 10% OF THE ADDITIONAL DEPRECIATION WAS CLAIMED BY THE ASSESSEE IN THE IMPUGNED ASSESSMENT YEAR. THE ISSUE BEFORE US IS, WHETHER BALANCE PORTION OF ADDITIONAL DEPRECATION PERTAININ G TO THE PRECEDING ASSESSMENT YEAR CAN BE ALLOWED IN THE IMPUGNED ASSESSMENT YEAR. WE FIND ANSWER TO THE AFORESAID ISSUE IN THE DECISIONS CITED BY THE LEARNED SR. COUNSEL FOR THE ASSESSEE. THE TRIBUNAL, MUMBAI BENCH, IN M/S. WELLKNOWN POLYESTERS LTD. V/S J CIT, ITA NO.7015/MUM./2012, DATED 17 TH SEPTEMBER 2014, HELD THAT IF THE 4 M/S. PRASOL CHEMICALS LTD. ENTIRE AMOUNT OF ADDITIONAL DEPRECIATION COULD NOT BE ALLOWED IN THE ASSESSMENT YEAR , WHEREIN , THE PLANT AND MACHINERIES WERE PUT TO USE FOR LESS THAN 180 DAYS, THE BALANCE PORTION OF DEPRECIATION CAN BE ALLOWED IN THE SUBSEQUENT ASSESSMENT YEAR. THE SAME VIEW HAS BEEN EXPRESSED BY THE HONBLE KARNATAKA HIGH COURT IN CIT V/S RITTAL INDIA PVT. LTD., ITA NO.590/2015, DATED 4 TH JANUARY 2016 AND BY T HE HON'BLE MADRAS HIGH COURT IN CIT V/S T .P. TEXTILES PVT. LTD., TAX CASE APPEAL NO.157/2017, DATED 6 TH MARCH 2017. RESPECTFULLY FOLLOWING THE RATIO LAID DOWN IN THE AFORESAID DECISION S , WE UPHOLD THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) ON THIS ISSUE. GROUNDS ARE DISMISSED. 6 . IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN C OURT ON 24.05.2019 SD/ - MANOJ KUMAR AGGARWAL ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 24.05.2019 COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ASSISTANT REGISTRAR ITAT, MUMBAI