ACIT, CHITTORGARH V. M/s. Sarvodaya Mining Services, CHITTORGARH

ITA 9/JODH/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70320 (ITAT-JODHPUR)
• Duration Of Justice: 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 13-11-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 04-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Assessee Lawyers: G K GARGIEYA
• Keywords: Depreciation; Rule of consistency
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER ITA NO.09/JODH/2013 ASSESSMENT YEAR: 2009-10 ASSTT. COMMISSIONER OF INCOME TAX, VS. M/S. SARVO DAYA MINING SERVICES, CIRCLE, CHITTORGARH. PETCH AREA, DAK BUNGLOW ROAD, NIMBAHERA, CHITTORGARH. (PAN: AAVFS 4002 P). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N.A. JOSHI, D.R. RESPONDENT BY : SHRI G.K. GARGIEYA & SHRI SARVESH BALDI DATE OF HEARING : 13.11.2013 DATE OF PRONOUNCEMENT : 25.11.2013 ORDER PER HARI OM MARATHA, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE FOR ASSESSMENT YEAR 2009 -10 IS DIRECTED AGAINST THE ORDER OF LD. CIT(A), UDAIPUR DATED 12.10.2012. 2. THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS A PPEAL:- ON THE FACTS AND IN THE PRESENT CIRCUMSTANCES OF T HE CASE, THE LEARNED CIT(A) HAS ERRED IN :- 1. ALLOWING THE CLAIM OF DEPRECIATION @ 50% & 30% I GNORING THE FACT THAT THE VEHICLES WERE NOT GIVEN ON HIRE FOR TRANSPORTA TION BUT WAS USED FOR HIS OWN BUSINESS AS SUCH NORMAL DEPRECIATION @15% IS A LLOWABLE AND HENCE 2 ITA NO.09/JODH/2013 A.Y. 2009-10 ERRED IN DELETING THE ADDITION OF RS.31,87,493/- M ADE ON ACCOUNT OF EXCESS CLAIM OF DEPRECIATION. 2. DELETING THE ADDITION OF RS.2,90,828/- MADE UNDE R SECTION 40A(2)(B) OF THE I.T. ACT ON ACCOUNT OF EXCESS COMMISSION PAYMENT T O ITS SISTER CONCERN IN COMPARISON TO OTHER CASES OF SIMILAR LINE. THAT THE APPELLANT CRAVES TO ADD, AMEND, ALTER, DEL ETE OR MODIFY ANY OR ALL THE ABOVE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HE ARING. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE ENTIRE RECORDS. THE FIRST GROUND OF THIS APPEAL PERTAINS TO CLAIM OF DEPRECIATION. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MINING AND T RANSPORTATION OF LIME STONE ON CONTRACT BASIS. FOR THE A.Y. 2009-10 THE ASSESSEE FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF RS.18,13,231/-. DURING T HE ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE A.O. FROM THE DEPRECIATION CHART FILED THAT THE ASSESSEE HAS CLAIMED DEPRECIATION ON OLD DUMPER (TAURUS) @ 50% O N WDV OF RS.1,71,343/- AMOUNTING TO RS.85,672/- AS AGAINST THE ALLOWABLE R ATE OF DEPRECIATION AT 15%. SIMILARLY, ON ANOTHER BLOCK OF DUMPERS ON WDV AND N EW ADDITION TOTALING TO RS.2,08,50,151/- DEPRECIATION AMOUNTING TO RS.62,55 ,045/- HAS BEEN CLAIMED @ 30% AS AGAINST ALLEGEDLY ALLOWABLE DEPRECIATION OF 15%. THE CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED BY THE A.O. AND, THEREFOR E, HE DISALLOWED THE DEPRECIATION OF RS.31,87,493/- WHICH WAS MORE THAN 15% AS VEHICLES WERE ACTUALLY USED BY THE ASSESSEE FOR HIS OWN CONTRACT/BUSINESS AND THE BUSINESS OF THE ASSESSEE IS NOT OF HIRING OF VEHICLES. 3 ITA NO.09/JODH/2013 A.Y. 2009-10 4. AGGRIEVED, THE ASSESSEE FILED APPEAL AND THE LD. CIT(A), BY FOLLOWING THE HISTORY OF THE ASSESSEE, ALLOWED THE DEPRECIATION A T THE RATE CLAIMED BY THE ASSESSEE. THE REVENUE HAS DISPUTED THIS FINDING. IT WAS ARGU ED BY THE LD. AUTHORIZED REPRESENTATIVE THAT THIS ISSUE STANDS COVERED BY TH E ORDER OF A.O. HIMSELF TAKEN IN ASSESSEES OWN CASE. THE ASSESSEE WAS IN THE SAME BUSINESS FROM THE A.Y. 2004- 05 ONWARDS AND IN THE A.YS. 2004-05, 2005-06 & 2006 -07 THE ASSESSMENTS WERE COMPLETED UNDER SECTION 143(3) OF THE ACT AND THE H IGHER DEPRECIATION CLAIMED ON THE VEHICLES WERE ALLOWED. SIMILARLY, HIGHER DEPRE CIATION CLAIMS WERE ALLOWED IN A.YS. 2007-08 AND 2008-09. THIS ISSUE STANDS COVER ED BY THE CONSISTENT VIEW TAKEN BY THE DEPARTMENT ITSELF. THEREFORE, BY FOLL OWING THE PRINCIPLE OF CONSISTENCY, WE ALSO APPROVE THE ACTION OF THE LD. CIT(A) AND DISMISS GROUND NO.1 OF REVENUES APPEAL. 5. THE FACTS APROPOS GROUND NO.2 ARE THAT DURING TH E COURSE OF ASSESSMENT PROCEEDINGS, FROM ANNEXURE-III OF FORM NO.3CD, IT W AS NOTICED BY THE A.O. THAT THE ASSESSEE HAD PAID COMMISSION OF RS.5,52,385/- T O M/S U.B. ROADLINES WHICH IS ITS SISTER CONCERN. WHEN ASKED TO DO, THE ASSESSEE FURNISHED NECESSITY OF PAYING THIS COMMISSION, BUT IT WAS NOT ACCEPTED BY THE A.O . THEREFORE, HE DISALLOWED A SUM OF RS.2,90,828/- OUT OF THE COMMISSION PAID TO THE SISTER CONCERN UNDER SECTION 40A(2)(B) OF THE ACT ON THE BASIS THAT GENE RALLY THE COMMISSION PAID ON DEPLOYING OF VEHICLES IN SIMILAR LINE OF BUSINESS I S PAID @ 1.5% TO 2%. 4 ITA NO.09/JODH/2013 A.Y. 2009-10 6. AGGRIEVED, THE ASSESSEE PURSUED THE MATTER FURTH ER AND THE LD. CIT(A) DELETED THIS ADDITION ON THE PREMISE THAT THE SISTE R CONCERN IS ALSO SUBJECT TO 30% TAX AND, THEREFORE, THERE IS NO LOSS OF REVENUE AND ALLEGED EXCESS PAYMENT CANNOT BE TREATED AS DIVERSION TO REDUCE THE TAX LIABILITY IN ITS HAND. HE HAS ALSO MENTIONED THAT THE A.O. HAS MADE GENERAL OBSERVATIO N THAT IN THIS LINE OF BUSINESS COMMISSION @ 1.5 TO 2% IS PAID. HE HAS MENTIONED T HAT THE A.O. HAS NOT REFERRED TO ANY SUCH CASE. 7. BEFORE US, BOTH THE PARTIES STUCK TO THEIR OLD S TAND. WE HAVE NOTICED THAT WHEN THERE IS NO LOSS OF REVENUE, THE PROVISIONS OF SECTION 40A OF THE ACT CANNOT BE INVOKED. ACCORDINGLY, WE FIND THAT NO MERIT IN THIS APPEAL OF THE REVENUE AND HENCE WE DISMISS THE SAME. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. (ORDER PRONOUNCED IN THE OPEN COURT ON 25.11.2013) SD/- SD/- (N.K. SAINI) (HARI OM MARATHA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 25 TH NOVEMBER, 2013 PBN/* 5 ITA NO.09/JODH/2013 A.Y. 2009-10 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, JODHPUR BENCH, JODHPUR 6. GUARD FILE. BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE T RIBUNAL, JODHPUR