DCIT, Circle-1(1), Sambalpur V. Sanjay Kumar Nanda, Sundergarh

ITA 62/CTK/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5350 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 7 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-10-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 29-02-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: BINOD AGRAWAL
• Keywords: Depreciation; Question of law
• Section: 143(3); 142(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI N.S.SAINI, AM & SHRI PAV AN KUMAR GADALE, JM ./ ITA NO. 62 / CTK /20 1 6 ( / ASSESSMENT YEAR : 20 11 - 20 1 2 ) DCIT, CIRCLE - 1(1), SAM BALPUR VS. SRI SANJAY KUMAR NANDA, MISSION CHOWK, REVENUE COLONY, DIST - SUNDERGARH - 77001 ./ ./ PAN/GIR NO. : A CVPN 1075 D ( / APPELLANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI D.K.PRADHAN, DR /AS SESSEE BY : SHRI BINOD AGRAWAL , AR / DATE OF HEARING : 2 3 / 10 /201 7 / DATE OF PRONOUNCEMENT 24 / 10 /201 7 / O R D E R PER SHRI PAV AN KUMAR GADALE, JM : TH E REVENUE HAS FILED AN APPEAL AGAINST THE ORDER OF CIT (A) , CUTTACK , DATED 18.11.2015 , PASSED U/S. 143(3) OF THE INCOME TAX ACT, 1961 FOR THE ASSESSMENT YEAR 20 1 1 - 201 2. THE SOLE SUBSTANTIVE GROUND RAISED BY THE REVENUE IS AS UNDER : - WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS JUSTIFIED IN DELETING THE ADDITION MADE BY THE AO TOWARDS EXCESS CLAIM OF DEPRECIATION TO THE TUNE OF RS.34,63,178/ - FOR THE A.Y.2011 - 12. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A TRANSPORT CONTRACTOR, DERIVES INCOME FROM TRA NSPORT CONTRACT THROUGH HIS PROPRIETORSHIPS CONCERN M/S MATARANI TRANSPORT AND FILED THE RETURN OF INCOME ELECTRONICALLY FOR THE ASSESSMENT YEAR 20 1 1 - 201 2 ON 01.12.2011 WITH TOTAL INCOME OF RS. 48,84,430/ - AND THE RETURN OF INCOME WAS PROCESSED U/S.143(1) O F THE ACT SUBSEQUENTLY THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND NOTICE U/S.143(2) & 142(1) ALONG WITH ITA NO. 62 /CTK/201 6 2 QUESTIONNAIRE WAS ISSUED. IN COMPLIANCE TO THE SAME, LD. AR OF THE ASSESSEE APPEARED FROM TIME TO TIME AND FILED DOCUMENTS IN SUPPORT OF THE RE TURN OF INCOME AND PRODUCED BOOKS OF ACCOUNTS, BANK STATEMENT AND SUPPORTING DOCUMENTS. THE AO ON PERUSAL OF THE FINANCIAL STATEMENTS FOUND THAT THE ASSESSEE HAS CLAIMED DEPRECIATION ON THE VEHICLES @30% INSTEAD OF 15%. LD.AR EXPLAINED THAT THESE VEHICLES WERE GIVEN ON HIRE AND ALSO THE CBDT CIRCULAR NOTIFICATION NO.652 DATED 14.06.1993 CLARIFIES THAT HIGHER DEPRECIATION WILL BE ALLOWED ON MOTOR LORRIES USED IN THE ASSESSEES BUSINESS OF TRANSPORTATION OF GOODS ON HIRE. THE AO FOUND THAT THE ASSESSEE RECEIV ES CONSIDERATION ON THE BASIS OF NUMBER OF TRIPS MADE BY HIS VEHICLE WHICH IS LET ON HIRE AND CONSEQUENTIAL DISTANCE RUN BY THE VEHICLE . T HE EXPLANATION S OF THE ASSESSEE ARE NOT SATISFACTORY AS THE ASSESSEE BEING A TRANSPORT CONTRACTOR AND HIS JOB IS TO TR ANSPORT CERTAIN MATERIAL INCLUDING COAL ON THE BASIS OF QUANTITY ALLOTTED TO HIM BY THE CONTRACTEE , THEREFORE, WILL NOT BE ELIGIBLE FOR CLAIM OF HIGHER DEPRECIATION @30% ON HIS OWN TRUCKS. HENCE, THE AO ALLOWED THE DEPRECIATION @15% INSTEAD OF 30% CLAIMED BY THE ASSESSEE AND ASSESSE D THE TOTAL INCOME AT RS.83,47,600/ - AND PASSED THE ORDER U/S.143(3) OF THE ACT. 3 . AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE HAS FILED AN APPEAL WITH THE CIT(A). IN THE APPELLATE PROCEEDINGS THE LD. AR RAISED THE GROUNDS AND RE ITERATED THE SUBMISSIONS MADE BEFORE THE AO. LD. CIT(A) CONSIDERED SUBMISSIONS OF THE LD. AR IN RESPECT OF CLAIM OF DEPRECIATION AND FINDINGS OF THE AO. THE CIT(A) RELYING ON THE JUDICIAL DECISIONS ITA NO. 62 /CTK/201 6 3 ALLOWED THE APPEAL OF ASSESSEE AND DIRECTED THE AO TO ALL OW THE DEPRECIATION @30% AND OBSERVED AT PAGE 2 PARA 5 OF THE ORDER AS UNDER : - 5. SIMILARLY, THE ORDER OF THE HON'BLE ITAT BENCH 'C', KOLKATA IN THE CASE OF DCIT, CIR - 7, KOLKATA VS. M/S. REPLEY & COMPANY LTD IN ITA NO.240/KOL/2012 FOR A.Y. 2008 - 09 MAY BE C ONSIDERED WHERE ALLOWING 30% DEPR ECIATION TO THE TIPPERS AND DUMP ERS USED BY THE ASSESSEE, THE HON'BLE ITAT HAVE NOTED THAT : 'WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ISSUE IS SQUARELY CO VERED IN FAVOUR OF THE ASSESSEE ON THE DECISION OF THE JURISDICTIONAL HIGH COURT IN ASSESSEE'S OWN CASE IN ITAT NO.231 OF 2010 VIDE ORDER DATED 10TH JANUARY, 2011 FOR A.Y. 2006 - 07. THE LD. DR COULD NOT CONTROVERT THE SUBMISSION OF THE ID. COUNSEL OF THE AS SESSEE. UPON CAREFUL CONSIDERATION WE FIND THAT THIS ISSUE HAS BEEN DECIDED BY THE APPELLATE AUTHORITIES IN ASSESSEE'S OWN CASE IN THE EARLIER YEARS IN FAVOUR OF THE ASSESSEE. THE HON'BLE JURISDICTIONAL HIGH COURT HAS ALSO CONSIDERED THE ISSUE AND HAS DECI DED IN FAVOUR OF THE ASSESSEE HOLDING AS UNDER : THE LEARNED TRIBUNAL BELOW, ON CONSIDERATION OF THE MATERIALS ON RECORD, CAME TO THE CONCLUSION THAT IN VIEW OF CIRCULAR NO.652 DATED 14TH JUNE, 1993 OF CBDT, THE ASSESSEE WAS ENTITLED TO THE BENEFIT BECAU SE OF THE FACT THAT THE ASSESSEE WAS USING THE VEHICLES IN BOTH THE CAPACITIES, THAT IS TO SAY, BUSINESS FOR TRANSPORTATION OF GOODS ON HIRE AS WELL AS TRANSPORTATION OF GOODS. IT WAS ALSO POINTED OUT THAT IN THE PAST FOR THE ASSESSMENT YEARS 2005 - 06 AND 2 004 - 05, THE LEARNED CIT(A) HELD THAT THE ASSESSEE HAD THE BUSINESS OF TRANSPORTATION OF GOODS ON HIRE AS WELL AS TRANSPORTING OTHER GOODS AND AS SUCH WAS ENTITLED TO HIGHER RATE OF DEPRECIATION AS PER THE SAID CIRCULAR NO 652. IT APPEARS THAT THE REVENUE DID NOT CHALLENGE THOSE DECISIONS. WE THEREFORE, FIND THAT IN THE FACTS OF THE PRESENT CASE, THE LEARNED APPELLATE TRIBUNAL RIGHTLY HELD THAT THE ASSESSEE WAS ENTITLED TO THE BENEFIT CIRCULAR NO.652. NO SUBSTANTIAL QUESTION OF LAW BEING INVOLVED, WE DISMIS S THIS APPEAL.' 6. CONSIDERING THE ABOVE, THE AO IS DIRECTED TO ALLOW DEPRECIATION AS CLAIMED BY THE APPELLANT AT 30% ON THE VEHICLES MENTIONED IN THE ASSESSMENT ORDER. 4 . AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE HAS FILED AN APPEAL BEFORE THE TRIB UNAL. 5 . BEFORE US, LD. DR ARGUED THAT THE CIT(A) ERRED IN DELETING THE EXCESS DEPRECIATION WHICH THE ASSESSEE HAS CLAIMED ON THE VEHICLES AND THEY ARE NOT USED IN THE TRANSPORTATION OF GOODS ON HIRE AND PRAYED FOR SET ITA NO. 62 /CTK/201 6 4 ASIDE OF THE ORDER OF CIT(A). CONTRA, LD. A R SUPPORTED THE ORDER OF CIT(A) AND SUBMITTED THAT IT WAS ALLOWED IN EARLIER YEARS 6 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE SOLE ISSUE REVOLVES AROUND THE CLAIM OF DEPRECIATION @30 % AS THE VEHICLES USED IN THE TRANSPORTATION OF GOODS ON HIRE. LD. DRS CONTENTION THAT VEHICLES WERE NOT USED IN ASSESSEES BUSINESS OF TRANSPORTATION OF GOODS ON HIRE WHEREAS THE CIT(A) RELYING ON THE JUDICIAL DECISIONS HAS DIRECTED THE AO TO ALLOW THE CLAIM AT 30%. LD. AR SUBMI TTED THAT THE REVENUE HAS ALLOWED HIGHER RATE OF DEPRECIATION IN THE EARLIER YEARS AND ON THE QUERY FROM THE BENCH TO SUPPORT WITH MATERIAL EVIDENCE, LD. AR EXPRESSED HIS INABILITY AND PRAYED THAT MATTER BE REMITTED TO THE AO TO VERIFY AND ALSO RELIED ON T HE CBDT CIRCULAR NO. 652 DATED 14.06.1993. WE FOUND THAT THERE IS STRENGTH IN THE SUBMISSIONS OF LD. DR AND THE MATTER H AS TO BE VERIFIED AND ACCORDINGLY IN THE INTEREST OF JUSTICE , WE REMIT THE ENTIRE DISPUTED ISSUE TO THE FILE OF AO TO VERIFY AS TO WHETHE R HIGHER DEPRECIATION ON TRUCKS WAS ALLOWED TO THE ASSESSEE IN THE EARLIER YEAR AND PASS THE ORDER ON MERITS AND FURTHER THE ASSESSEE SHALL BE PROVIDED ADEQUATE OPPORTUNITY OF HEARING BEFORE PASSING THE ORDER. 7 . IN THE RESULT, APPEAL OF THE REVENUE IS ALL OWED FOR STATISTICAL PURPOSES. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 24/10 / 201 7 . SD/ - ( N. S. SAINI ) SD/ - ( PA V AN KUMAR GADALE ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER CUTTACK ; DATED 24/10 /201 7 . . / PKM , SENIOR PRIVATE SECRETARY ITA NO. 62 /CTK/201 6 5 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , / ITAT, CUTTACK 1. / THE APPELLANT - 2 . / THE RESPONDENT - 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. //TRUE COPY//