ACIT 5(1), MUMBAI V. GARWARE WALL ROPES LTD, MUMBAI

ITA 6413/MUM/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62425 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 26-03-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 30-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H N SHAH
• Assessee Lawyers: A K NAYAK
• Keywords: Depreciation
• Section: 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH: MUMBAI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.6413/MUM/2010 (ASSESSMENT YEAR: 2007-08) ACIT 5(1), ROOM NO.568, 5TH FLOOR, AAYAKAR BHAVAN, MUMBAI -400 020 ...... APPELLANT VS M/S. GARWARE WALL ROPES LIMITED, CHOWPATTY CHAMBERS, SANDHURST BRIDGE, MUMBAI -400 007 ..... RESPONDENT PAN: AAACG 1337 P APPELLANT BY: SHRI A.K. NAYAK RESPONDENT-REVENUE BY: SHRI H.N. SHAH DATE OF HEARING: 29.03.2012 DATE OF PRONOUNCEMENT: 16.05.2012 O R D E R PER R.S. PADVEKAR, JM: THIS APPEAL IS FILED BY THE REVENUE CHALLENGING THE IMPUGNED ORDER OF THE LD. CIT (A)-9, MUMBAI DATED 23.06.2010 FOR THE A.Y. 2007-08. THE REVENUE HAS TAKEN THE FOLLOWING GROUN D: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND AS PER LAW, WAS THE LD. CIT (A) JUSTIFIED IN DI SMISSING THE AOS ACTION OF ALLOWING DEPRECIATION TO THE ASS ESSEE COMPANY, BEFORE GRANTING DEDUCTION U/S.80IB, WITHOU T CONSIDERING EXPLANATION 5, OF THE PROVISIONS OF SEC TION 32 AND THE JUDICIAL PRONOUNCEMENTS IN THE CASE OF SCOO P INDUSTRIES AND RAYON CORPORATION. 2. THE ASSESSEE COMPANY IS A MANUFACTURER OF ROPES, TWINES, FISHNETS & GEO FABRICS. THE A.O. HAS OBSERVED THAT IN COMPUTATION ITA NO.6413/MUM/2010 M/S. GARWARE WALL ROPES LIMITED 2 OF THE INCOME THE ASSESSEE HAS CLAIMED DEPRECIATION OF ` 9,94,00,778/- AS PER INCOME-TAX RULES. HOWEVER, TH E ASSESSEE OPTED NOT TO CLAIM DEPRECIATION ON CERTAIN UNITS IN EARLI ER YEARS UPTO A. Y. 2001-02 ON THE GROUND THAT DEPRECIATION NEED NOT BE FORCED UPON IT. THE A.O. HAS OBSERVED THAT THE SAID CONTENTION OF T HE ASSESSEE WAS NOT ACCEPTED BY THE DEPARTMENT AND IN THE SUBSEQUEN T ASSESSMENT ORDERS DEPARTMENT ALLOWED THE DEPRECIATION ON SUCH UNITS UPTO A.Y. 2006-07 AND HENCE, WDV AS ON 01.04.2006 IN VARIOUS UNITS IS NOT SAME AS WORKED OUT BY THE DEPARTMENT AND THAT AS PE R THE ASSESSEE. THE A.O. RESTRICTED THE DEPRECIATION AT ` 9,43,81,823/- AS AGAINST ` 9,94,00,778/-. 3. WE HAVE HEARD THE PARTIES. THE LD. COUNSEL SUBM ITS THAT THE ISSUE HAS BEEN SETTLED BY THE HONBLE HIGH COURT OF BOMBAY IN THE ASSESSEES OWN CASE. WE FIND THAT THE ISSUE HAS BE EN CONSIDERED BY THE HONBLE HIGH COURT OF BOMBAY IN THE ASSESSEES OWN CASE IN THE A.YS. 2003-04 & 2004-05. WE MAY REPRODUCE HIS OBSE RVATION AND FINDINGS OF HONBLE HIGH COURT IN CIT-5 VS. GARWARE WALL ROPES LIMITED, ITA NO.556 OF 2010 JUDGMENT DATED 02.12.20 11: 3. UPTO THE ASSESSMENT YEAR 2002-03 THE ASSESSEE H AD NOT CLAIMED DEPRECIATION WHILE COMPUTING DEDUCTION UNDE R CHAPTER VIA OF THE INCOME-TAX ACT, 1961. HOWEVER, IN THE ASSESSMENT YEAR, IN QUESTION, THE ASSESSEE COMPUTED DEDUCTION UNDER CHAPTER VIA AFTER TAKING INTO ACCOU NT THE DEPRECIATION ALLOWABLE UNDER THE ACT. THE ASSESSIN G OFFICER WAS OF THE OPINION THAT THE DEPRECIATION HA S TO BE COMPUTED ON THE WRITTEN DOWN VALUE OF THE ASSET COM PUTED IN THE EARLIER ASSESSMENT YEARS BY THRUSTING DEPREC IATION UPON THE ASSESSEE. ADMITTEDLY, THE DEPRECIATION TH IRSTED UPON THE ASSESSEE IN THE EARLIER YEARS HAVE BEEN DE LETED BY THE ITAT AND THOSE ORDERS HAVE ATTAINED FINALITY . IN THESE CIRCUMSTANCES, THE DECISION OF THE ITAT IN HO LDING THAT IN THE ASSESSMENT YEAR IN QUESTION, THE DEPREC IATION HAS TO BE COMPUTED ON THE WRITTEN DOWN VALUE DETERM INED ITA NO.6413/MUM/2010 M/S. GARWARE WALL ROPES LIMITED 3 ON THE FOOTING THAT DEPRECIATION WAS NOT THRUSTED U PON THE ASSESSEE IN THE EARLIER ASSESSMENT ORDERS CANNOT BE FAULTED. ACCORDINGLY, THE FIRST QUESTION RAISED BY THE REVENUE CANNOT BE ENTERTAINED. AS ISSUE HAS ALREADY DECIDED IN FAVOUR OF THE ASSES SEE, WE, THEREFORE, FIND NO REASON TO INTERFERE WITH THE ORDER OF THE L D. CIT (A). ACCORDINGLY, THE SAME IS CONFIRMED. 4. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 1 6TH MAY, 2012. SD/- ( J. SUDHAKAR REDDY ) ACCOUTANT MEMBER SD/- ( R.S. PADVEKAR ) JUDICIAL MEMBER MUMBAI, DATE: 16TH MAY, 2012 COPY TO: 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A)-9, MUMBAI. 4) THE CIT -5, MUMBAI. 5) THE D.R. G BENCH, MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR I.T.A.T., MUMBAI *CHAVAN