Himalayaputra Aviation ltd, New Delhi V. ACIT Circle-11(2), New Delhi

ITA 7904/DEL/2019

• Counselvise Citation: [2022] 107 COUNSELVISE.COM (IT) 0857 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 26-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 154; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘B’: NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI YOGESH KUMAR US, JUDICIAL MEMBER ITA No.7904/DEL/2019 [Assessment Year: 2013-14] Himalayaputra Aviation ltd. 54JA Annexe, BasantLok, Vasant Vihar, New Delhi-110057 Vs ACIT, Cricle-11(2), New Delhi-110002 PAN-AACCH7900F Assessee Revenue Assessee by Sh. Praveen Kumar, CA Revenue by Md. Gayasuddin Ansari, Sr. DR Date of Hearing 18.07.2022 Date of Pronouncement .07.2022 ORDER PER SHAMIM YAHYA, AM, This appeal by the assessee is directed against the order of the Ld. CIT(A)-4, New Delhi, dated 24.07.2019 pertaining to Assessment Year 2013-14. 2. The assessee has raised following grounds of appeal:- 1. That on facts and law involved, the Learned Commissioner of Income Tax (Appeals) [Ld. CIT(A)] has erred in not deleting the disallowance of Rs.5,84,00,045/- made by the Learned Assessing Officer (Ld. AO) out of total depreciation claimed on aircraft amounting to Rs.11,68,00,089/- on the ground that the aircraft was put to use for less than 180 days. 2. That on facts and law involved, the Ld. CIT(A) has erred in not quashing the impugned order u/s 154 passed by the Ld. AO on the incorrect ground that the issue of 2 ITA No.7904/Del/2019 depreciation from the date of ready to use even if not put to use is not a debatable issue and the claim of depreciation from the date of ready to use is a clear mistake apparent from record. 3. That on facts and law involved, the Ld. CIT(A) has erred in sustaining the depreciation on aircraft allowed by the Ld. Assessing Officer as per impugned order u/s 154 at 50% of 40% i.e. 20% as against 40% claimed and allowed earlier. 4. That on facts and law involved, the Ld. CIT(A) has erred in holding that the aircraft could actually be considered to 'put to use’ only from 10.10.2012 i.e. the date of receipt of permit to use the aircraft and not from 15.7.2012 i.e. the date of possession of the aircraft or from 24.9.2012 i.e. the date of application for permit to use. 5. That the above disallowance of depreciation as made is without jurisdiction and /or based on erroneous views and /or non-appreciation of the facts or law involved without properly considering the material on record and without affording appropriate& specific lawful opportunity. As such too the disallowance as made is unwarranted and not capable of being sustained. 6. That the rectification order as passed and the order of the Ld. CIT(A) are against law and facts of the case involved.” 3. Brief facts of the case are that the assessee company was incorporated on 23.07.2011 with the main object of Civil Aviation. In the course of business, the assessee entered into an agreement with USA Company on 26.03.2012 for the purchase of Aircraft. The Aircrafts were supplied in the FY 2012-13 and the assessee company took possession of the same on 15.07.2012 on the payment of custom duty. Later on, after completion of all formalities and approvals, the assessee applied for issue of non-schedule Air transport services permit on 24.09.2012 which was received on 10.10.2012. In the books, depreciation was provided from 15.07.2012. The assessee claimed 40% depreciation as per the Act. In the 3 ITA No.7904/Del/2019 assessment order passed u/s 143(3), the assessee return was accepted including the said claim of deprecation. Thereafter, the Assessing Officer issued in order u/s 154 of the Act on 21.02.2018, wherein, he corrected the mentioning of assessee’s income as Nil. Thereafter, in another order u/s 154, dated 21.01.2019, the Assessing Officer noted that during the course of audit, the audit party has found discrepancies and pointed out that Aircraft was put to use on 17.10.2012 for less than 180 days. Therefore, deprecation should have been provided @ 20% i.e. 50% or 40%. The Assessing Officer proceeded to issue show cause notice to the assessee. The assessee responded that though permit was received 10.10.2012 still aircraft was ready for to use on 15.07.2012 as mentioned in the books audited. However, the Assessing Officer was not satisfied and rejected the submission and passed order u/s 154 of the Act reducing the depreciation by 50%. 4. Upon assessee’s appeal, the Ld. CIT(A) noted the assessee’s submission that the aircraft was ready to use earlier and hence the claim of depreciation whether 40% or 20% is a debatable issue. The Ld. CIT(A) was not satisfied, he found there is no debate in this as sections provided for deprecation from date of put to use and not from the date when aircraft is ready to use, hence, he held there is no debate on this and it is clear mistake. Hence, he upheld the order of the Assessing Officer. 5. Against this order, the assessee is in appeal before us. 6. We have heard both the parties and perused the records. The Ld. Counsel for the assessee submitted that after having passed the 4 ITA No.7904/Del/2019 assessment order u/s 143(3) only at the behest to audit party, the Assessing Officer had passed second order u/s 154 of the Act. He submitted that issue of ready to use or put to use have been duly considered in several case laws. He submitted that ready for put to use by transport operator has been held to sufficient in allowing depreciation by the Hon’ble Delhi High Court in the case of Capital Bus Service Ltd. vs CIT 4 taxman 309 (Del). He further referred to the decision of Hon’ble Bombay High Court in the case of CIT vs Visvanath Bhaskar Sathe 5 ITR 621 (Bom.). He submitted that in this case, it was held that with reference to aircraft use for the purpose of business should be interpreted to mean that such plant or machinery must be open to use for the business and the proof of actual uses is not necessary. Referring to these case laws, the ld. counsel for the assessee submitted that the issue in this case is certainly debatable and cannot be rectified in order u/s 154 of the Act. 7. Per Contra, the Ld. DR relied upon the orders of the authorities below. 8. Upon careful consideration, on the facts and circumstances of the case narrated above, we are of the considered opinion that the issue is certainly debatable and cannot be rectified u/s 154 of the Act. The Hon’ble Apex Court in the case of T.S. Balaram, ITO vs Vokar Bros 82 ITR 50(SC) has held that a mistake apparent from record is the one which is apparent and there is no debate or reasoning is required. In the present case as referred by the ld. counsel for the assessee, there are Hon’ble High Courts decisions, where ready to use have been found to be sufficient for allowing depreciation instead of put to use. In this view of the matter, and 5 ITA No.7904/Del/2019 in our considered opinion, the matter could not have been rectified u/s 154 of the Act after the assessment order has been framed u/s 143(3) of the Act. Hence, we set-aside the orders of the authorities below and decide the issue in favour of the assessee. 9. In the result, the assessee’s appeal stands allowed. Order pronounced in the open court on 03/08/2022. Sd/- Sd/- [YOGESH KUMAR US] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER Delhi; 03.08.2022. f{x~{tÜ? f{x~{tÜ?f{x~{tÜ? f{x~{tÜ? Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi