Sampat Devi Patawari, Rajasthan V. I.T.O., Ward - 45(4), Kolkata, Kolkata

ITA 725/KOL/2022

AI Insights

The case revolves around the appeal by Sampat Devi Patawari against the order of the Commissioner of Income Tax (Appeals), which upheld the disallowance of depreciation on certain machineries used in her business for the assessment year 2016-2017. The primary contention was whether the machineries, which were purchased and not independently installed, qualified for depreciation. The assessee argued that the machineries were part of a larger system and had been used for production, as evidenced by the income declared. The Tribunal agreed with the assessee, noting that the Revenue Authorities had not adequately analyzed the operational details of the machineries before disallowing the depreciation.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129141 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 25-04-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 13-12-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 143(2)

Judgement Text

ITA No. 725/KOL/2022 A.Y. 2016-2017 Sampat Devi Patawari 1 IN THE INCOME TAX APPELLATE TRIBUNAL, ‘SMC’ BENCH, KOLKATA Before Shri Rajpal Yadav, Vice-President & Shri Rajesh Kumar, Accountant Member I.T.A. No. 725/KOL/2022 Assessment Year: 2016-2017 Sampat Devi Patawari,.............................Appellant Flat No. 301, AWHO, Shaitan Singh Vihar Colony, Vidhyadhar Nagar, Sector-1, Rajasthan-302012 [PAN: AFYPP0344M] -Vs.- Income Tax Officer,..............................Respondent Ward-45(4), Kolkata, 3, Government Place, Kolkata-700001 Appearances by: Shri Rakesh Jain, A.R., appeared on behalf of the assesseee Smt. Ranu Biswas, Addl. CIT, D.R., appeared on behalf of the Revenue Date of concluding the hearing : April 26, 2023 Date of pronouncing the order : May 23, 2023 O R D E R Per Shri Rajpal Yadav, Vice-President (KZ):- The assessee is in appeal before the Tribunal against the order of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi ITA No. 725/KOL/2022 A.Y. 2016-2017 Sampat Devi Patawari 2 dated 17 th October, 2022 passed for assessment year 2016-17. 2. Though the assessee has taken four grounds of appeal, but her solitary grievance is that the Revenue Authorities have disallowed the depreciation partly. 3. Brief facts of the case are that the assessee has filed her return of income electronically on 26.08.2016 declaring total income of Rs.13,44,080/-. The case of the assessee was selected for scrutiny assessment and a notice under section 143(2) was issued and served upon the assessee. The ld. Assessing Officer has issued a show-cause notice on the ground that six number of machineries , which were purchased from 4 th November, 2015 upto 26 th November, 2016 could not be put to use because date of installation is not available and accordingly in his opinion, these machineries do not qualify for grant of depreciation. He issued a show-cause notice, which is available on page no. 2 of the assessment order. The ld. Assessing Officer after confronting the assessee with the date of purchase and value of machinery has observed that why depreciation debited to the tune of Rs.1,05,274/- and Rs.1,87,156/- on account of machineries and buildings should be disallowed to the assessee. The assessee failed to submit the details, hence he disallowed the above amounts and ITA No. 725/KOL/2022 A.Y. 2016-2017 Sampat Devi Patawari 3 made the addition of Rs.2,92,430/-. The assessee has submitted detailed written submission but without examining them analytically, ld. CIT(Appeals) has upheld the disallowance. In the concluding lines, the ld. 1 st Appellate Authority has observed that certain machineries had been put to use only just for five days from the close of the year and this is not probable to use them. In this way, ld. CIT(Appeals) has confirmed the disallowance of depreciation. 4. Ld. Counsel for the assessee has filed a paper book running into 58 pages. He submitted that items of machineries on which depreciation has been claimed, are not required to be installed independently. He pointed out that total addition to the plant & machinery from 01.10.2015 to 31.03.2016, on which depreciation was claimed, was Rs.20,22,395/-, out of which assessee itself not included the sum of Rs.3,06,000/- while working out the depreciation. The ld. Assessing Officer has excluded only Rs.10,97,650/- out of total plant & machinery having value of Rs.17,16,395/-. In other words, there are three components- (a) machinery of Rs.3,06,000/-: the assessee did not claim depreciation; (b) Rs.17,16,395/-: assessee claimed depreciation; (c) Ld. Assessing Officer excluded only Rs.10,97,650/- and allowed the ITA No. 725/KOL/2022 A.Y. 2016-2017 Sampat Devi Patawari 4 depreciation on Rs.6,18,745/- (Rs.17,16,395/- minus Rs.10,97,650/-) 5. Ld. Counsel for the assessee submitted that these are the machineries, which cannot operate independently. Thus on certain parts, ld. Assessing Officer has granted depreciation but selectively disallowed the depreciation on certain machineries, which combined together would form a single machinery to give rise the production. It has also been brought to our notice that the assessee has generated the products, which have been sold and this aspect has not been doubted by the Revenue Authorities while accepting computation of income at Rs.13,44,080/- in the self- assessment. Thus we are of the view that the Revenue Authorities have disallowed the depreciation partly without deeply analysing the complete details. Therefore, we delete the disallowance and allow the appeal of the assessee. 6. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on May 23, 2023. Sd/- Sd/- (Rajesh Kumar) (Rajpal Yadav) Accountant Member Vice-President(KZ) Kolkata, the 23 rd day of May, 2023 ITA No. 725/KOL/2022 A.Y. 2016-2017 Sampat Devi Patawari 5 Copies to : (1) Sampat Devi Patawari, Flat No. 301, AWHO, Shaitan Singh Vihar Colony, Vidhyadhar Nagar, Sector-1, Rajasthan-302012 (2) Income Tax Officer, Ward-45(4), Kolkata, 3, Government Place, Kolkata-700001 (3) Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi; (4) Commissioner of Income Tax , (5) The Departmental Representative (6) Guard File TRUE COPY By order Assistant Registrar Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S.