AMOL DICALITE LTD., Ahmedabad V. THE DY. CIT, CIRCLE-1, Ahmedabad

ITA 892/AHD/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9068 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 09-09-2009
• Assessment Year: 2004-2005
• Appeal Filed On: 20-03-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M C
• Keywords: Depreciation; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE SHRI H.L. KARWA, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER DATE OF HEARING : 09.09.09 DRAFTED ON: 10.09 .09 ITA NO.892/AHD/2009 ASSESSMENT YEAR : 2004-05 AMOL DICALITE LTD. 301, AKSHAY, SHRIMALI SOCIETY, NAVRANGPURA, AHMEDABAD. VS. THE DY. CIT, CIRCLE-1, AHMEDABAD. PAN/GIR NO. : AABCA 2807K (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI TUSHAR P. HEMANI RESPONDENT BY: SHRI M.C.PANDIT SR. D.R. O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER OF THE LD.CIT(APPEALS)-VI, AHMEDABAD, DATED 1.12.2008. 2. THE SOLE ISSUE INVOLVED IN ALL THE GROUNDS OF AP PEAL TAKEN BY THE ASSESSEE IS THAT THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN CONFIRMING IN DISALLOWANCE MADE BY THE LEARNED ASSE SSING OFFICER OF RS.2,01,503/- OUT OF CLAIM OF DEPRECIATION OF RS.2, 93,095/- ON PURCHASE OF NEW DUST COLLECTOR. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E CLAIMED DEPRECIATION @ 80% ON THE PURCHASE OF NEW DUST COLLECTOR FOR RS.7, 32,737/-. SINCE PURCHASE WAS MADE, AFTER SEPTEMBER, IT CLAIM RS.2,93,095/- B EING 50% OF THE NORMAL DEPRECIATION ALLOWABLE ON THE DUST COLLECTOR. FROM THE DETAILS OF PURCHASE OF ITA NO .892/AHD/2009 M/S.AMOL DICALITE LTD. ASST.YEAR -2004-05 - 2 - DUST COLLECTOR FURNISHED BY THE ASSESSEE, THE LEARN ED ASSESSING OFFICER OBSERVED THAT THE PURCHASES WERE OF ITEMS SUCH AS I ND. MOTOR, WIRE CAGE, TIMER 18 CHANNEL, PULSE JET VALVE, WOODEN SLIPPER, LADDER, HR SHEET, INDUSTRIAL FILTERS, ETC.. SINCE THE PURCHASE WAS NOT FOR DUST COLLECTOR, THE CLAIM OF ASSESSEE FOR DEPRECIATION @ 80% WAS DISALLOWED BY THE LEARNE D ASSESSING OFFICER AND ONLY 25% RATE OF DEPRECIATION APPLICABLE ON PLANT A ND MACHINERY WAS ALLOWED TO THE ASSESSEE. SINCE, PURCHASE WAS MADE AFTER SEP TEMBER, DEPRECIATION AT 12.5% ON RS.7,32,737/- WHICH WORKS OUT RS.91,592/- WAS ALLOWED TO THE ASSESSEE AND THE DIFFERENCE AMOUNT OF RS.2,01,503/- WAS DISALLOWED OUT OF THE TOTAL CLAIM OF THE DEPRECIATION OF THE ASSESSEE. 4. IN APPEAL, THE LEARNED COMMISSIONER OF INCOME TA X(APPEALS) OBSERVING THAT ASSESSEE HAS FILED COPIES OF BILLS AND DELIVER Y CHALLANS FOR PURCHASE OF MATERIALS FROM M/S. ANUP ENGINEERING LTD. AHMEDABAD AND M/S. INDUSTRIAL FILTERS AND FABRICS, BHOPAL. FURTHER, THE PLANT IN- CHARGE OF THE ASSESSEE CERTIFIED THAT THE ASSEMBLING AND INSTALLATION OF T HE DUST COLLECTOR WAS DONE BY THE ASSESSEE AS PER DOCUMENTS FURNISHED DURING THE APPEAL PROCEEDINGS, BUT THE FACT EMERGES THAT EQUIPMENT WAS ASSEMBLED BY M/ S. ANUP ENGINEERING LTD. AHMEDABAD. FURTHER, IT IS NOT CLEAR AS TO HOW THE E QUIPMENT COMES UNDER THE PURVIEW OF ENERGY SAVING SYSTEM TO ENTITLE THE ASSE SSEE FOR DEPRECIATION @ 80%. HENCE, HE CONFIRMED THE ACTION OF THE LEARNED ASSESSING OFFICER. 5. THE LEARNED AUTHORISED REPRESENTATIVE OF THE AS SESSEE AT THE TIME OF THE HEARING SUBMITTED THAT THE ASSEMBLING OF THE DU ST COLLECTOR WAS DONE BY THE ASSESSEE HIMSELF AFTER PURCHASING THE VARIOUS P ARTS REQUIRED FOR THE SAME. THE ASSESSEE FILED DULY FURNISHED A COPIES OF BILLS FOR ALL PURCHASES MADE FOR MANUFACTURE OF THE DUST COLLECTOR. THE DUST COLLEC TOR WAS IN FACT MANUFACTURED ITA NO .892/AHD/2009 M/S.AMOL DICALITE LTD. ASST.YEAR -2004-05 - 3 - AND USED BY THE ASSESSEE IS NOT IN DISPUTE AS THE L EARNED ASSESSING OFFICER HIMSELF HAS ALLOWED THE DEPRECIATION ON THE SAME @ 25% IN PLACE OF 80% CLAIMED BY THE ASSESSEE. THE ONLY DISPUTE IS WHETHE R THE DUST COLLECTOR FALLS UNDER THE HEAD ENERGY SAVING DEVICE OR NOT IN ORDER TO QUALIFY FOR DEPRECIATION @80%. HE REFERRED TO RULE-5 PART A(III)(3)(VIII)(C) OF THE INCOME TAX RULES AND SUBMITTED THAT ITS CONTAINS DUST COLLECTOR ON WHICH DEPRECIATION IS ALLOWABLE @ 100%. THEREFORE, IT IS SUBMITTED THAT THE ASSESS EE SHOULD SUCCEED IN THIS APPEAL. 6 THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 7 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RE CORD. IN THE INSTANT CASE, THE ASSESSEE CLAIMED DEPRECIATION @80% IN RESPECT OF MA CHINE CALLED DUST COLLECTOR WHICH WAS GOT ASSEMBLED FROM M/S. ANUP EN GINEERING LTD. AHMEDABAD. THE LEARNED ASSESSING OFFICER DISALLOWED THE CLAIM ON THE GROUND THAT ASSESSEE HAS BROUGHT NO MATERIAL TO PROVE THAT IT IS A ENERGY SAVING DEVICE, AND THEREFORE, HE ALLOWED DEPRECIATION IN RESPECT O F THE SAME @ 25%. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ALSO CO NFIRMED THE ACTION OF THE LEARNED ASSESSING OFFICER. BEFORE US, THE ASSESSEE POINTED OUT THAT THE DUST COLLECTOR MACHINE WAS STATED IN RULE-5 PART A(III)( 3)(VIII)(C) UNDER THE HEAD AIR POLLUTION CONTROL EQUIPMENT, AND THEREFORE, WAS EL IGIBLE FOR HIGHER RATE OF DEPRECIATION @100%. WE FIND THAT THE CLAIM OF THE A SSESSEE WAS DISALLOWED BY THE LOWER AUTHORITIES ON THE GROUND THAT THE DUST C OLLECTOR MACHINE WAS NOT AN ENERGY SAVING DEVICE BUT THEY HAVE NOT CONSIDERED W HETHER IT IS A AIR POLLUTION CONTROL EQUIPMENT WHICH ARE ALSO ELIGIBLE FOR HIGHE R RATE OF DEPRECIATION. IN THE ITA NO .892/AHD/2009 M/S.AMOL DICALITE LTD. ASST.YEAR -2004-05 - 4 - CIRCUMSTANCES, IN OUR CONSIDERED OPINION, IT SHALL BE IN THE INTEREST OF THE JUSTICE TO SET ASIDE THIS ISSUE TO THE FILE OF THE LEARNED ASSESSING OFFICER FOR RECONSIDERATION OF THE RATE OF DEPRECIATION ALLOWAB LE AS PER THE PROVISIONS OF LAW AND TO ALLOW THE CORRECT DEPRECATION AS APPLICA BLE AS PER LAW. WE THEREFORE, REMIT THE MATTER BACK TO THE FILE OF THE LEARNED ASSESSING OFFICER WITH THE DIRECTIONS AS STATED ABOVE. NEEDLESS TO ST ATE THAT PROPER OPPORTUNITY OF HEARING SHALL BE GIVEN BY THE LEARNED ASSESSING OFFICER TO THE ASSESSEE BEFORE ADJUDICATING THE ISSUE AFRESH. THUS, THIS GR OUND OF APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 8 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 11/09/2009. SD/- SD/- ( H.L. KARWA ) ( N.S. SAINI ) JUDICIAL MEMBER ACCO UNTANT MEMBER AHMEDABAD; DATED 11/09/ 2009 PARAS# COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)- 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD