ACIT, New Delhi V. M/s. Nav Bharat International Ltd., New Delhi

ITA 6696/DEL/2015

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2435 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 6 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2006-2007
• Appeal Filed On: 18-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Set aside
• Section: 48

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SH. N. K. BILLAIYA, ACCOUNTANT MEMBER AND SH.KULDIP SINGH, JUDICIAL MEMBER (THROUGH VIDEO CONFERENCING) ITA NO.6696/DEL/2015 ASSESSMENT YEAR: 2006-07 ACIT CENTRAL CIRCLE -15, ROOM NO.353, E-2, ARA CENTRE, JHANDEWALAN EXTN NEW DELHI VS NAV BHARAT INTERNATIONAL LTD., 5192, LAHORI GATE NAYA BAZAR, NEW DELHI PAN NO.AABCN9065G (APPELLANT) (RESPONDENT) APPELLANT BY SH. H. K. CHOUDHARY, CIT DR RESPONDENT BY SH. SATISH AGARWAL, CA DATE OF HEARING: 23/06/2021 DATE OF PRONOUNCEMENT: 23/06/2021 ORDER PER N. K. BILLAIYA, AM: THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST TH E ORDER OF THE CIT(A)-42, NEW DELHI DATED 17.08.2015 PERTAININ G TO A.Y. 2006-07. 2 2. THOUGH THE REVENUE HAS RAISED AS MANY AS NINE GR OUNDS BUT THE SUM AND SUBSTANCE OF THE GRIEVANCE OF THE R EVENUE IS THAT THE CIT(A) ERRED IN ALLOWING DEPRECIATION OF RS.3.0 4 CRORES CLAIMED ON WIND POWER GENERATION PLANT. 3. ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF PROCESSING AND EXPORT OF RICE AND DURING THE YEAR U NDER CONSIDERATION THE ASSESSEE ALSO ENTERED INTO THE BU SINESS OF WIND POWER GENERATION. 4. THE ASSESSEE FILED ITS RETURN OF INCOME DECLARIN G INCOME OF RS.1.45 CRORES WHICH WAS ACCESSED AT RS.1.49 CRORES VIDE ORDER DATED 16.04.2008 FRAMED U/S. 143 (3) OF THE ACT. 5. SUBSEQUENTLY VIDE ORDER DATED 03.03.2011 THE PCI T ASSUMING JURISDICTION U/S.263 OF THE ACT SET ASIDE THE ASSESSMENT WITH A DIRECTION TO THE AO TO FRAME THE ASSESSMENT AFRESH AFTER VERIFICATION OF GENUINENESS OF THE CLAIM OF THE DEP RECIATION ON WIND POWER PLANT. 6. PURSUANT TO THE DIRECTION OF THE PCIT THE AO FRA MED IMPUGNED ASSESSMENT BY MAKING THE DISALLOWANCE OF D EPRECIATION OF RS.3.04 CRORES. 3 7. ASSESSMENT WAS ASSAILED BEFORE THE CIT(A) AND AF TER VERIFICATION OF THE FACTS THE CIT(A) ALLOWED THE CL AIM OF DEPRECIATION. 8. BEFORE US THE DR STRONGLY SUPPORTED THE FINDINGS OF THE AO. 9. IT IS THE SAY OF THE DR THAT THE WIND MILL PLANT WAS NOT COMMISSIONED DURING THE YEAR UNDER CONSIDERATION AN D, THEREFORE, THE ASSESSEE IS NOT ELIGIBLE FOR THE CLA IM OF DEPRECIATION AND THE AO HAS RIGHTLY DISALLOWED THE CLAIM OF DEPR ECIATION. 10. PER CONTRA THE COUNSEL FOR THE ASSESSEE REITERA TED WHAT WAS STATED BEFORE THE FIRST APPELLATE AUTHORITY AND REL IED UPON THE DECISION OF THE FAA. 11. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE AO HAS DIS ALLOWED THE DEPRECIATION ON THE WIND POWER GENERATION PLANT MAI NLY FOR THE FOLLOWING REASONS :- (I) THE PLANT COULD NOT HAVE BEEN SET UP BY 31.03. 2006, IN VIEW OF THE FACT THAT THE SELLER M/S SULZON ENERGY L TD. (SEL) HAD ISSUED THE SALE BILL ON 29.03.2006 AND THERE WAS NO EVIDENCE IN THE FORM OF REQUIRED LORRY RECEIPTS, WHIC H COULD CONFIRM TRANSPORTATION OF THE SAID PLANT DURING THE YEAR. (II) THE AGREEMENT FOR SUPPLY OF POWER IN THE FORM OF POWER PURCHASE AGREEMENT WITH THE PUBLIC SECTOR UNDERTAKI NG, 4 NAMELY M/S BESCOM DATED 28.03.2006 WAS ANTEDATED AS TH E APPROVAL FROM KARNATAKA ELECTRICITY REGULATORY COMM ISSION WAS ACCORDED ON 24.05.2006, WHICH WAS RECORDED ON THE SAID AGREEMENT. IN THIS REGARD, AO PREFERRED TO CONDUCT EN QUIRY DIRECTLY WITH THE CHIEF SECRETARY, THE GOVERNMENT OF KARNATAKA BY WRITING A LETTER DATED 09.12.2011, WHICH WAS NOT REPLIED TO BY THE LATTER TILL THE DATE OF PASSING OF THE IMPUG NED ORDER. ON THIS ASPECT, MY ID. PREDECESSOR, CIT(A)-4, NEW DELHI , VIDE SEVERAL LETTERS DIRECTED THE AO TO FURNISH HIS REMAN D REPORT, HOWEVER, TILL DATE IN THE ABSENCE OF THE COMMENTS O F THE CHIEF SECRETARY, GOVERNMENT OF KARNATAKA, NO SUCH REPLY WA S FILED. (III) THE AUDITOR IN THE AUDIT REPORT DID NOT MENTIO N ABOUT THE BUSINESS OF WIND POWER GENERATION NOR ANY DEPRECIATI ON ON THE WIND POWER GENERATION PLANT WAS CLAIMED UNDER THE COMPANIES 1956. 12. WE HAVE GONE THROUGH THE POWER PURCHASE AGREEME NT WITH BANGLORE ELECTRICITY SUPPLY COMPANY LIMITED AND THE SAME IS PLACED AT PAGES 9 TO 34 OF THE PAPER BOOK. 13. THE WIND POWER GENERATION PLANT HAD BEEN DISPAT CHED VIDE CHALLANS FOR WHICH LORRY RECEIPTS FROM 10.03.2016 T O 23.03.2006 CAN BE UNDERSTOOD FROM THE FOLLOWING CHART :- 5 14. THE INVOICES WERE RAISED BY M/S SULZON ENERGY L TD . ON DIFFERENT DATES FOR SALE OF WIND POWER GENERATION P LANT THE COPIES OF THE INVOICES ARE PLACED AT PAGES 49 TO 57 OF THE PAPER BOOK. 15. THE DETAILS OF WHICH ARE SUMMRISED AS UNDER :- 6 16. M/S. SUZLON ENERGY LTD. HAS CLARIFIED THAT THE WIND POWER GENERATION PLANT WAS DISPATCHED AND INSTALLED AT TH E SITE BEFORE 30.03.2006 AND THE COPY OF THE CLARIFIED IS AT PAGE S 47 AND 48 OF THE PAPER BOOK. 17. THE WIND POWER GENERATION PLANT WAS COMMISSIONE D ON 31.03.2006 AS PER COPY OF COMMISSIONING CERTIFICATE ISSUED BY KARNATAKA POWER TRANSMISSION CORPORATION LIMITED. THE SAID COMMISSIONING CERTIFICATE IS AS UNDER :- 7 8 18. CONSIDERING THE AFORESTATED CLINCHING EVIDENCES THERE REMAIN NO DOUBT THAT THE WIND POWER GENERATION PLAN T WAS COMMISSIONED DURING THE FINANCIAL YEAR UNDER CONSID ERATION AND, THEREFORE, THE ASSESSEE IS VERY MUCH ELIGIBLE FOR C LAIM OF DEPRECIATION WHICH HAS BEEN RIGHTLY ALLOWED BY THE CIT(A). WE, THEREFORE, DO NOT FIND ANY ERROR IN THE FINDINGS OF THE CIT(A). THE APPEAL FILED BY THE REVENUE IS ACCORDINGLY DISMISSE D. 19. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 20. DECISION ANNOUNCED IN THE OPEN COURT IN THE PR ESENCE OF BOTH THE REPRESENTATIVES ON 23.06.2021. SD/- SD/- (KULDIP SINGH) (N. K. BILL AIYA) JUDICIAL MEMBER A CCOUNTANT MEMBER *NEHA* DATE:- 23.06.2021 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGI STRAR ITAT NEW DELHI 9 DATE OF DICTATION 23.06.2021 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 23.06.2021 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER 23.06.2021 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS 23.06.2021 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 23.06.2021 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS 23.06.2021 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 23.06.2021 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE HEAD CLERK. THE DATE O N WHICH FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER