M/s.U.P.State Mineral Development Coporation Ltd., Lucknow V. Commissioner of Income Tax, Lucknow

ITA 74/LKW/2012

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8237 (ITAT-LUCKNOW)
• Duration Of Justice: 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 15-11-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 16-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS
• Assessee Lawyers: RISHABH KAPOOR
• Keywords: Depreciation; Opportunity of being heard; Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW SMC BENCH, LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER ITA NO. 74/LKW/2012 ASSESSMENT YEAR: 2008 - 09 M/S U.P. STATE MINERAL DEVELOPMENT CORPORATION LIMITED LUCKNOW V. CIT(A) - I LUCKNOW PAN: AAA CU2954Q (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. RISHABH KAPOOR, A.R. RESPONDENT BY: SMT. RANU BISWAS, D.R. DATE OF HEARING: 15.11.2012 DATE OF PRONOUNCEMENT: 16.11.2012 O R D E R THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A) THAT THE LD. CIT(A) HAS DISALLOWED AN AMOUNT OF ` 6,71,831 BEING DEPRECIATION ON FIXED ASSETS WHICH IS AGAINST THE PRINCIPLES OF NATURAL JUSTICES AND UNCALLED FOR. 2 . I HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY EXAMINED THE ORDERS OF THE AUTHOR ITIES BELOW AND DOCUMENTS PLACED ON RECORD. THE FACT S BORNE OUT FROM THE RECORD IN THIS REGARD ARE THAT THE ASSESSEE HAS CLAIMED DEPRECIATION OF ` 6,71,831 ON FIXED ASSETS AS PER COMPANYS LAW. SINCE THERE WAS NO BUSINESS ACTIVITY DURING THE YEAR, DEPRECIA TION WAS NOT ALLOWED. THE COMPANY HAS NOT MAINTAINED PROPER RECORDS OF FIXED ASSETS IN AN APPROPRIATE FORM SHOWING FULL PARTICULARS INCLUDING QUANTITATIVE DETAILS AND LOCATION OF THE FIXED ASSETS. IN THE ABSENCE OF COMPLETE DETAILS, THE ASSESSING OFFICER HAS DISALLOWED THE ENTIRE CLAIM OF DEPRECIATION OF ` 6,71,831. : - 2 - : 3 . THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) BUT DID NOT PLACE THE RELEVANT MATERIAL BEFORE HIM AND THE LD. CIT(A) HAS CONFIRMED THE DISALLOWANCE. 4 . NOW THE ASSESSEE HAS PREFERRED AN AP PEAL BEFORE THE TRIBUNAL WITH THE SUBMISSION THAT THE IMPUGNED ISSUE IS SQUARELY COVERED BY THE ORDER OF THE TRIBUNAL IN THE ASSESSEES OWN CASE ITA NO. 77/LKW/2010 FOR ASSESSMENT YEAR 2006 - 07 . COPY OF THE ORDER IS PLACED ON RECORD. 5 . THE LD. D.R., ON THE O THER HAND, HAS SUBMITTED THAT THIS IS NOT THE FIRST YEAR OF A SSESSMENT . THE ASSESSEE HAS NOT BEEN MAINTAINING P ROPER ACCOUNT FOR THE LAST SO MANY YEARS AND EVERY YEAR IT HAS CLAIMED DEPRECIATION AS PER COMPANYS LAW WHEREAS DEPRECIATION IS TO BE ALLOWED A S PER INCOME - TAX RULES FOR COMPUTING PROFIT UNDER CHAPTER IV OF THE INCOME - TAX ACT, 1961. DEPRECIATIONS ARE PROVIDED UNDER THE INCOME - TAX RULES AND THE ASSESSEE IS REQUIRED TO COMPUTE DEPRECIATION AS PER INCOME - TAX R ULES AND NOT AS PER COMPANYS LAW. 6 . HAVI NG GIVEN A THOUGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND FROM A CAREFUL PERUSAL OF RECORD, I FIND THAT THE ASSESSEE HAS BEEN MAINTAINING ACCOUNTS IN THE SAME PATTERN FOR THE LAST SO MANY YEARS AND HAS BEEN CLAIMING DEPRECIATION AS PER COMPANYS LAW . IN EARLIER YEAR , FOR THE SIMILAR REASON THE ENTIRE DEPRECIATION WAS DIS ALLOWED AND THE TRIBUNAL VIDE ITS ORDER DATED 4.8.2010 HA D RESTORED THE MATTER TO THE ASSESSING OFFICER WITH A DIRECTION TO RECOMPUTE THE DEPRECIATION AS PER LAW A S DEPRECIATIONS ARE THE STATUTORY DEDUCTIONS AND IS REQUIRED TO BE ADJUDICATED INDEPENDENTLY. COPY OF THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2006 - 07 IS PLACED ON RECORD IN WHICH THE MATTER WAS REFERRED TO THE ASSESSING OFFICER WITH A DIRECTION TO RECOMPUTE DEPRECIATION AS PER INCOME - TAX LAW. FROM A CAREFUL PERUSAL OF THE ORDERS OF THE LOWER AUTHORITIES, IT IS EVIDENT THAT THE ASSESSEE HAS CLAIMED DEPRECIATION AS PER COMPANYS LAW AND COMPLETE DETAILS OF THE ASSETS WERE NOT FURNISHED : - 3 - : BEFORE THE LOWER AUTHORITIES. BUT IN ANY CASE DEPRECIATIONS ARE THE STATUTORY DEDUCTIONS AND IT SHOULD BE ALLOWED AS PER LAW. THE ASSESSING OFFICER HAS NOT GIVEN ANY SPECIFIC FINDING AS TO WHY HE HAS NOT ALLOWED DEPRECIATION. THEREFORE, FOLLOWING THE AFORESAID ORD ER OF THE TRIBUNAL IN ASSESSEES OWN CASE, I SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO RE - ADJUDICATE THE ISSUE AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND TO GIV E A SPECIFIC FINDING WHETHER THE ASSESSEE IS ENTITLED FOR DEPRECIATION IN THE IMPUGNED ASSESSMENT YEAR ; IF ENTITLED UPTO WHAT RATE? THE ASSESSEE IS ALSO DIRECTED TO EXTEND ALL CO - OPE R ATIONS TO THE ASSESSING OFFICER IN DETERMINATION OF THE ISSUE. ACCORDIN GLY, THE MATTER IS RESTORED TO THE ASSESSING OFFICER. 7 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 16.11.2012. S D/ - [ S UNIL KUMAR Y ADAV ] JUDICIAL MEMBER DATED: 16.11.2012 JJ: 1511 COPY FORWARDED TO: 1 . APP ELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR