The ACIT, Gandhidham Circle, GANDHIDHAM V. M/s R.L. Kalathia & Minerals Pvt. Ltd., GANDHIDHAM

ITA 745/RJT/2010

• Counselvise Citation: 74524914 RSA 2010
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 01-11-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 04-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI T.K. SHARMA (JM) AND SHRI A.L. GEHLOT ( AM) I.T.A. NO.745/RJT/2010 (ASSESSMENT YEAR 2005-06) ACIT, GANDHIDHAM CIRCLE VS M/S R.L. MINERALS & MI NES GANDHIDHAM PLOT 46, SECTOR-8 GANDHIDHAM-KUTCH PAN : AAHFR3278E (APPELLANT) (RESPONDENT) DATE OF HEARING : 01-11-2011 DATE OF PRONOUNCEMENT : 04-11-2011 APPELLANT BY : SHRI AVINASH KUMAR RESPONDENT BY: SHRI KALPESH DOSHI O R D E R PER T.K. SHARMA (JM) THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER DA TED 09-12-2009 PASSED BY THE CIT(A)-II, RAJKOT DELETING THE DISALLOWANCE OF DEPRECIATION OF RS. 21,90,513 FOR THE ASSESSMENT YEAR 2005-06. 2. BRIEFLY STATED, THE FACTS ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN BUSINESS OF MINING. IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL THE ASSESSEE PURCHASED MACHINES (SURFACE MIN ER BITELL) FROM GERMANY BY BILL OF ENTRY DATED 21-09-2004 AND ALSO IMPORTED SPARE PARTS VIDE BILL OF ENTRY DATED 09-12-2004. SINCE THE ASSESSEE HAS BROUGHT T HE SPARE PARTS IN THE MONTH OF DECEMBER, 2004 THE ASSESSING OFFICER TOOK THE VI EW THAT MACHINE CANNOT BE USED WITHOUT SPARE PARTS FROM THE DATE OF IMPORT I. E. 21-09-2004. THE ASSESSING ITA NO.745/RJT/2010 2 OFFICER WAS THEREFORE OF THE OPINION THAT THE MACHI NE WAS PUT TO USE ONLY AFTER SEPTEMBER, 2004 AND THEREFORE, THE ASSESSEE IS ENTI TLED FOR 50% OF THE ELIGIBLE DEPRECIATION I.E. RS. 21,90,513 BEING 50% OF ELIGIB LE DEPRECIATION OF RS.43,81,026. ACCORDINGLY DEPRECIATION TO THE EXTE NT OF RS.21,90,513 WAS DISALLOWED. 3. ASSESSEE PREFERRED APPEAL BEFORE CIT(A) AND CONT ENDED THAT IMPORTED MACHINE WAS GIVEN FOR ASSEMBLING TO ONE M/S RAVI UD HYOG PVT LTD ON 25-09- 2004 AND THAT THEY HAVE STARTED USING THE SAID MACH INE FROM 25-09-2004 ONWARDS WHICH HAS BEEN CONFIRMED BY THE SAID IN THE IR CONFIRMATION OBTAINED BY THE ASSESSING OFFICER DIRECTLY FROM THE PARTY. IN SUPPORT THE ASSESSEE HAD ALSO SUBMITTED COPY OF BILL OF ENTRY TO PROVE THAT THE U NIT IMPORTED WAS A SINGLE ONE. COPY OF BILL RAISED BY CLEARING AND FORWARDING AGEN T WAS ALSO PRODUCED TO PROVE THAT THE MACHINE WAS A SINGLE UNIT. ALSO A PHOTOGR APH OF THE MACHINE WAS PRODUCED WHICH INDICATED THAT THE MACHINE COULD NOT BE ASSEMBLED LOCALLY. CERTIFICATES OF ORIGIN, INSPECTION AND WARRANTY IND ICATING THAT THE MACHINE WAS A SINGLE UNIT WERE ALSO PRODUCED. THE ASSESSEE ALSO EXPLAINED THAT IN THE BILL GIVEN BY THE SUPPLIER THE TECHNICAL DETAILS OF THE MACHINE WERE BIFURCATED, BUT THE A.O. MISTOOK THAT THE MACHINE CAME TO INDIA IN SEVE RAL PARTS, WHICH WAS NOT CORRECT. COPY OF A DEBIT NOTE RAISED BY THE CONTRA CTOR, M/S RAVI UDHYOG P LTD INDICATING THE DATE OF STARTING OF USAGE OF MACHINE ON 25-09-2004 AND THE COPY OF INVOICE RAISED BY THE ASSESSEE FOR THE PERIOD FROM 25-09-2004 TO 31-10-2004 ON M/S RAVI UDHYOG P LTD WERE ALSO FILED. THE ABOVE SU BMISSIONS OF THE ASSESSEE ITA NO.745/RJT/2010 3 FOUND FAVOUR WITH THE CIT(A). THE CIT(A), FOR THE DETAILED REASONS GIVEN AT PARAGRAPH (C) AND (CA) DIRECTED THE ASSESSING OFFIC ER TO ALLOW THE DEPRECIATION IN FULL AND THE DISALLOWANCE WAS THUS DELETED. AGGRIE VED BY THE ORDER OF CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 4. AT THE TIME OF HEARING BEFORE US, ON BEHALF OF T HE REVENUE SHRI AVINASH KUMAR APPEARED AND POINTED OUT THAT THE MATTER BE R ESTORED TO THE FILE OF THE ASSESSING OFFICER FOR FURTHER VERIFICATION. 5. SHRI KALPESH DOSH OBJECTED TO THIS PLEA OF THE L D.DR ON THE GROUND THAT NO FRESH EVIDENCE WAS FURNISHED BEFORE THE LD.CIT(A) A ND THAT ALL THOSE DOCUMENTS FURNISHED BEFORE THE CIT(A) WERE ALSO FURNISHED BEF ORE THE ASSESSING OFFICER. THE ASSESSING OFFICER DISALLOWED 50% OF DEPRECIATIO N ON SUSPICION AND THE LD.CIT(A) HAS GIVEN COGENT REASON WHILE DELETING TH E DISALLOWANCE. THE AR THEREFORE, PLEADED THAT THE ORDER OF THE CIT(A) BE UPHELD. 6. WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AUT HORITIES BELOW. IT IS PERTINENT TO NOTE THAT NO FRESH EVIDENCE WAS FILED BEFORE THE LD.CIT(A). FROM THE PERUSAL OF REASONING GIVEN BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER WE ARE CONVINCED THAT THE LD.CIT(A) RESTRICTED THE DEP RECIATION TO 50% ON SUSPICION THAT THE MACHINE CAME TO INDIA IN SEVERAL PARTS AN D LD.CIT(A) AFTER APPRECIATING ALL THE DOCUMENTS WHICH WERE FURNISHED BEFORE THE A SSESSING OFFICER CAME TO THE CONCLUSION THAT THE MACHINERY IN QUESTION WAS USED FROM 25-09-P2004, I.E. MORE ITA NO.745/RJT/2010 4 THAN SIX MONTHS IN THE PREVIOUS YEAR RELEVANT TO TH E ASSESSMENT YEAR UNDER APPEAL. WE ARE, THEREFORE, INCLINED TO UPHOLD THE ORDER OF LD.CIT(A). 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04-11-2011. SD/- SD/- (A.L. GEHLOT) (T.K. SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT, DT : 04TH NOVEMBER, 2011 PK/- COPY TO: 1. ASSESSEE 2. REVENUE 3. THE CIT(A)-1I, RAJKOT 4. THE CIT-I, RAJKOT 5. THE DR, I.T.A.T., RAJKOT (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, RAJKOT