RMC Services, Manimajra V. ITO, W-3(4), Chandigarh

ITA 835/CHANDI/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4292 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 27-01-2020
• Assessment Year: 2011-2012
• Appeal Filed On: 28-05-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P K SHARMA
• Keywords: Depreciation; Difference of opinion; Change of opinion
• Section: 271(1)(c); 143(3); 32

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, B CHANDIGARH , ! '# $ % & '# , () BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO. 835/CHD/2019 / ASSESSMENT YEAR : 2011-12 M/S RMC SERVICES, SCO 855, 1 ST FLOOR, NAC, MANIMAJRA, CHANDIGARH THE ITO, WARD 3(4), CHANDIGARH ./PAN NO: AAJFR6827P / APPELLANT /RESPONDENT ! /ASSESSEE BY : SHRI SUDHIR SEHGAL, ADVOCATE ' ! / REVENUE BY : SHRI P.K. SHARMA, ADDL CIT # $ % /DATE OF HEARING : 27.01.2020 &'() % / DATE OF PRONOUNCEMENT : . 2020 (*/ ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 24.04.2019 OF THE COMMISSIONER OF INCO ME TAX (APPEALS)- 1, CHANDIGARH [HEREINAFTER REFERRED TO AS CIT (A) ]. 2. THE ASSESSEE IN THIS APPEAL HAS TAKEN FOLLOWING GROUNDS OF APPEAL:- 1. THE LD. ASSESSING OFFICER'S & WORTHY CIT (A) ORDER ARE CONTRARY TO LAW AND FACTS OF THE CASE. ITA NO. 835-CHND-2019 SHRI RMC SERVICES, CHANDIGARH 2 2. THE LD. ASSESSING OFFICER'S & WORTHY CIT (A) ERRED IN ADDING BACK RS. 59,25,797/- ON ACCOUNT OF EXCESSIVE RATE OF DEPRECIATION CLAIMED ON CONCRETE PUMPS, EQUIPMENT & VEHICLE AT THE RATE OF 40% UNDER PROVISIONS OF SECT ION 32 OF THE INCOME TAX ACT, 1961. HOWEVER, THE VEHICLES WER E HEAVY COMMERCIAL VEHICLES AND REGISTERED WITH RTO AS HEAV Y COMMERCIAL VEHICLE UNDER THE MOTOR VEHICLES ACT. BU T, THE LD. A.O WITHOUT INDEPENDENT APPLICATION OF MIND REG ARDING THE FACTS OF THE CASE AND WITHOUT RELIED ON THE DEC ISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT-3 VS. RAKESH JAIN AND CIT VS. PUNJAB LEASING PVT. LTD . IGNORING THE REAL FACTS OF THE CASE PASSED THE IMPU GNED ORDER WHICH IS UNJUSTIFIED AND ILLEGAL AND DECIDED THE MATTER AGAINST THE ASSESSEE. 3. THE LD A.O WITH THE CHANGE OF OPINION ON THE RATE O F DEPRECIATION ON AFTER THE ORIGINAL ASSESSMENT HAS B EEN FRAMED UNDER SECTION 143(3) ALSO NOT WARRANTED THUS THE ASSESSMENT ORDER PASSED STAND VOID AB INITIO. 4. INITIATION OF PENALTY UNDER SECTION 271(1)(C) IS AL SO NOT WARRANTED DUE TO THE FACT THAT NOTHING HAS BEEN CON CEALED AND THE ADDITIONS WAS ONLY DUE/TO THE DIFFERENCE OF OPINION BETWEEN LD. A.O. AND THE ASSESSEE. NOTHING WAS CONC EALED TO AVOID ANY TAX, SO WE PRAY THAT THE VERY INITIATI ON OF THIS PENALTY PROCEEDING BE ORDER TO BE DROPPED. 5. THE APPELLANT CRAVES LEAVE TO ADD TO OR AMEND THE A FORESAID GROUNDS BEFORE DISPOSAL OF THE APPEAL . 3. A PERUSAL OF THE ABOVE GROUNDS OF APPEAL REVEAL THAT THE SOLE ISSUE RAISED BY THE ASSESSEE IN THIS APPEAL IS REGARDING THE RATE OF DEPRECIATION ON THE VEHICLE ALLOWABLE TO BY THE ASSESSEE. THE AS SESSING OFFICER OBSERVED THAT ASSESSEE HAD CLAIMED DEPRECIATION ON CONCRETE PUMP AND OTHER EQUIPMENT INSTALLED ON THE VEHICLE COLLECTIV ELY AT THE RATE OF 40%, ITA NO. 835-CHND-2019 SHRI RMC SERVICES, CHANDIGARH 3 WHEREAS, THE DEPRECIATION ALLOWABLE ON CONCRETE PUM P AND BOOT PUMP WAS 15%. FURTHER, THAT ASSESSEE CONTINUOUSLY HAD BE EN CLAIMING DEPRECIATION @ 15% ON THE CONCRETE PUMP AND BOOT P UMP IN EARLIER YEARS ALSO. THAT THIS YEAR THE ASSESSEE HAD WRONGLY CLAIMED THE DEPRECIATION @ 40% AS AGAINST ALLOWABLE RATE OF 1 5%. HOWEVER, THE CLAIM OF THE ASSESSEE HAS BEEN THAT THE CONCRETE PU MP WAS FIXED ON THE COMMERCIAL VEHICLE AND WAS PART AND PARCEL OF THE V EHICLE, HENCE, THE ASSESSEE HAD CLAIMED DEPRECIATION @ 40%, AS IS ALLO WABLE ON COMMERCIAL VEHICLE. HOWEVER, THE ASSESSING OFFICE R DID NOT AGREE WITH THE ABOVE CONTENTION OF THE ASSESSEE. THE ASSESSING OFFICER ALSO DISALLOWED DEPRECIATION CLAIMED @ 40% ON CHASSIS ATTACHED TO THE VEHICLE, WHEREUPON, THE CONCRETE PUMP WAS FIXED. 4. BEING AGGRIEVED BY THE ABOVE ORDER OF THE ASSES SING OFFICER, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A), HO WEVER, REMAINED UNSUCCESSFUL. 5. BEFORE US, THE LD. COUNSEL HAS SUBMITTED THAT TH E ASSESSEE BY FIXING THE EQUIPMENT I.E CONCRETE PUMP ETC. HAS MAD E IT A MOBILE CONCRETE PUMP VEHICLE, WHICH IS A REQUIREMENT FOR T HE BUSINESS OF THE ASSESSEE AND THAT THE ASSESSEE HAS RIGHTLY CLAIMED THE DEPRECIATION @ 40%. ITA NO. 835-CHND-2019 SHRI RMC SERVICES, CHANDIGARH 4 6. ON THE OTHER HAND, THE LD. DR HAS RELIED ON THE FINDINGS OF THE LOWER AUTHORITIES. 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF THE LD. A UTHORISED REPRESENTATIVES OF BOTH THE PARTIES AND HAVE ALSO G ONE THROUGH THE RECORD. WE ARE OF THE VIEW THAT THE CONCRETE PUMP ETC. HAVE BEEN FITTED BY THE ASSESSEE AS PER HIS OWN CONVENIENCE B UT THE SAME CANNOT BE SAID TO BE A PART OF THE COMMERCIAL VEHICLE, WHEREA S, THE CHASSIS FITTED ON THE VEHICLE IS A PART AND PARCEL OF THE VEHICLE. IN VIEW OF THE ABOVE, THE CLAIM OF THE ASSESSEE OF DEPRECIATION @ 40% ON CONCRETE PUMP AND OTHER RELATED EQUIPMENT, HAS RIGHTLY BEEN REDUCED / DISALLOWED BY THE LOWER AUTHORITIES AND THE SAME HAS RIGHTLY BEEN ALL OWED @ 15%. HOWEVER, SO FAR AS THE CHASSIS IS CONCERNED, SINC E THE SAME IS PART AND PARCEL OF THE VEHICLE, THE ASSESSEE IS ENTITLED TO DEPRECIATION @ 40%. WE ORDER ACCORDINGLY. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS P ARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30.01.2020 SD/- SD/- ( $ % & '# / ANNAPURNA GUPTA) () / ACCOUNTANT MEMBER ( / SANJAY GARG) / JUDICIAL MEMBER DATED : 30.01.2020 .. ITA NO. 835-CHND-2019 SHRI RMC SERVICES, CHANDIGARH 5 '+ ,-.- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. # / / CIT 4. # / ( )/ THE CIT(A) 5. -01 2 , %2 , 34516 / DR, ITAT, CHANDIGARH 6. 157$ / GUARD FILE