The ACIT(OSD), Circle-5, Ahmedabad V. P.C. Snehal Engg.P.Ltd., Ahmedabad

ITA 758/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73162 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 24-03-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 09-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Assessee Lawyers: MANOJ ACHARYA
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER ITA NO.758/AHD/2011 A.Y. 2007-08 ACIT (OSD), CIRCLE-5, AHMEDABAD VS PC SNEHAL ENGG. P. LTD., 18 PRATIMA SOCIETY, NR. DADA SAHEB PAGIA NAVRANGPURA AHMEDABAD. PAN: AACCP 2051P (APPELLANT) (RESPONDENT) REVENUE BY : SHRI P.L. KUREEL, SR.D.R. ASSESSEE(S) BY : SHRI MANOJ ACHARYA, A.R. / DATE OF HEARING : 24/03/2014 / DATE OF PRONOUNCEMENT: 31/03/2014 / O R D E R PER SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE ARISING FROM THE ORDER OF LEARNED CIT(A)-XI, AHMEDABAD, DATED 03.01.2011 AND THE MAIN GROUND RAISED AS FOLLOWS: THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS OF TH E CASE IN DIRECTING THE AO TO VERIFY THE CONTENTIONS OF THE ASSESSEE AND TO DE LETE THE ADDITION OF RS.9,69,102/- MADE ON ACCOUNT OF DISALLOWANCE OF DE PRECIATION, IF ASSESSEES CONTENTIONS ARE FOUND CORRECT BY REASON OF THE AFOR EMENTIONED DIRECTION BEING IN CONTRAVENTION OF SECTION 251 2. AN ASSESSMENT WAS MADE U/S.143(3) DATED 04.12.20 09, WHEREIN IT WAS NOTED BY THE AO THAT THE ASSESSEE HAD CLAIMED D EPRECIATION @ 100% ON CERTAIN MATERIAL WHICH WAS NOT AS PER LAW. IT HA S ALSO BEEN NOTED BY THE AO THAT THE ASSESSEE HAD CLAIMED DEPRECIATION O N LABOUR CHARGES. WE HAVE BEEN INFORMED THAT THE ASSESSEE COMPANY IS ENG AGED IN THE BUSINESS ITA NO.758/AHD/2011 ACIT (OSD) VS. PC SNEHAL ENG. P. LTD. A.Y.2007-08 - 2 - OF CONSTRUCTION. THE AO HAS DISALLOWED THE ENTIRE C LAIM OF DEPRECIATION OF RS.9,69,102/-. 3. BEFORE LEARNED CIT(A), THE ASSESSEE HAS PRODUCE D CERTAIN PURCHASE BILLS AND AFTER CONSIDERING THOSE EVIDENCE S LEARNED CIT(A) HAS HELD AS UNDER: I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE AR O F THE APPELLANT AND THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE ASSESS MENT ORDER. THE CONTENTION OF THE APPELLANT ARE THAT COST OF EACH STEEL PLATE IS BELOW RS.5,000/- AND ALL THE PLATES WERE UTILIZED DURING THE YEAR. AO IS DIR ECTED TO VERIFY THE CONTENTION AND DELETE THE DISALLOWANCE. SUBJECT TO VERIFICATIO N, THESE GROUNDS OF APPEAL ARE ALLOWED. 4. WITH THIS BRIEF FACTUAL BACKGROUND, WE HAVE BEEN INFORMED THAT WHILE GIVING EFFECT TO THE ORDER OF LEARNED CIT(A), DATED 03.01.2011, THE AO VIDE AN ORDER UNDER SECTION 154, DATED 26.03.201 2 ADDED THE SAID AMOUNT AS PER THE FOLLOWING OBSERVATION: 3. SUBJECT TO THE ABOVE, THE TOTAL INCOME OF THE A SSESSEE COMPANY IS RECOMPUTED AS UNDER: TOTAL INCOME AS PER RETURN OF DEPRECIATION RS.16,63,938/- ADD: ADDITION ON ACCOUNT OF DISALLOWANCE OF DEPRECI ATION THE LEARNED CIT WAS ALLOWED THE RELIEF ON ADDITION ON A/C OF DISALLOWANCE OF DEPRECIATION WITH A DIRECTIO N TO VERIFY THE CLAIM OF DEPRECIATION. IN THIS CASE, THE LD. CIT(A) CONTENTION WAS NOT ACCEPTED BY THE REVENUE AND 2 ND APPEAL FILED BEFORE THE HONBLE ITAT, ABAD HENCE, THE SAME IS NOT GRANTED. RS.09,69,102 REVISED TOTAL INCOME RS.26,33,040 5. THAT ADDITION WAS AGAIN CHALLENGED BEFORE LEARNE D CIT(A)-XI, AHMEDABAD AND VIDE AN ORDER DATED 26.07.2013 GRANTE D PART RELIEF TO THE ASSESSEE IN THE FOLLOWING MANNER: I HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS. THE APPELLANTS CLAIM OF 100% DEPRECIATION IS FOUND TO BE INCORRECT AS THE P ROVISIONS OF ALLOWING 100% DEPRECIATION ON THE ITEMS VALUED LESS THAN RS. 5,000/- HAS BEEN OMITTED ITA NO.758/AHD/2011 ACIT (OSD) VS. PC SNEHAL ENG. P. LTD. A.Y.2007-08 - 3 - FROM THE STATUTE BY FINANCE ACT, 1995 WITH EFFECT F ROM 1.4.1996. SINCE, THE PROVISIONS ITSELF HAS BEEN OMITTED FROM THE STATUTE , THE QUESTION OF CLAIMING 100% DEPRECIATION AND SUBSEQUENTLY GRANTING THE SAM E DOES NOT ARISE. THIS VERIFICATION WAS REQUIRED TO BE DONE BY THE AO, HOW EVER, HE HAS FAILED TO DO THE SAME. THE AO IS DIRECTED TO ALLOW DEPRECIATION ON THE CENTERING MATERIAL AS PER THE PRESCRIBED RATE OF 15% FOR P & M. APPELL ANT, ACCORDINGLY GETS RELIEF OF RS.1,45,365/- AND THE BALANCE DISALLOWANC E OF RS.8,23,737/- IS HEREBY CONFIRMED. THIS GROUND OF APPEAL IS PARTLY ALLOWED. 5.1 WITH THIS FACTUAL BACKGROUND, WE HAVE RAISED A QUERY FROM THE RESPONDENT-ASSESSEE THAT WHETHER AN APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF LEARNED CIT(A), DATED 26.07.2013. 6. LEARNED AR HAS INFORMED IN WRITING THAT NO APPEA L HAS BEEN FILED BY THE ASSESSEE AND THAT PART RELIEF WAS ACCEPTED. DUE TO THIS REASON, WE HEREBY HOLD THAT IN A SITUATION WHEN AT THE INITIAL STAGE LEARNED CIT(A) HAD RESTORED THE ISSUE FOR DUE VERIFICATION AT THE STAGE OF THE AO VIDE AN ORDER DATED 03.01.2011 AND THEREAFTER AN ORDER OF T HE AO WAS PASSED AS ALSO AN ORDER HAS AGAIN BEEN PASSED BY LEARNED CIT( A); HENCE, THE ISSUE RAISED IN THIS GROUND OF THE REVENUE STOOD MERGED W ITH THOSE SUBSEQUENT ORDERS. RATHER, THERE SHOULD NOT BE ANY GRIEVANCE O F THE REVENUE DEPARTMENT. AT PRESENT, WE FIND NO FORCE IN THIS GR OUND OF THE REVENUE; HENCE, THE SAME IS HEREBY DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. SD/- SD/- (N.S. SAINI) (MUKUL KR. SHRAWAT) ACCOUNTANT MEMBER JUD ICIAL MEMBER AHMEDABAD; DATED 31/03/2014 PRABHAT KR. KESARWANI, SR. P.S. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. ITA NO.758/AHD/2011 ACIT (OSD) VS. PC SNEHAL ENG. P. LTD. A.Y.2007-08 - 4 - 3. / CONCERNED CIT 4. ( ) / THE CIT(A)-III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE. / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD