DCIT, CHENNAI V. Allison Transmission Pvt Ltd., Sriperambudur

ITA 906/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7555 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2017
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 05-12-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 07-04-2016
• Court: TRIBUNAL
• Department Lawyers: C YAMUNA
• Keywords: Depreciation; Revised return
• Section: 143(3)

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . , . , BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI DUVVURU R L REDDY , JUDICIAL MEMBER ./ I T.A. NO. 906 /MDS/201 6 / ASSESSMENT YEAR :20 1 0 - 1 1 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 1 ( 1 ), CHENNAI 600 034 . VS. M/S. ALLISON TRANSMISSION PVT. LTD., A - 21 SIPCOT INDL. PARK, GR OWTH CENTRE, ORAGADAM, SRIPERUMPUDUR 602 105. [PAN:A AGCA4054P ] ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : MS. C. YAMUNA , JCIT / RESPONDENT BY : SHRI S. P. CHIDAMBARAM , A D VOCATE / DATE OF HEARING : 0 5 . 1 2 .201 6 / DATE OF P RONOUNCEMENT : 03 . 0 3 .201 7 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF I NCOME TAX ( APPEALS ) 1 , C HENNAI , DATED 29 . 0 1 .201 6 RELE VANT TO THE ASSESSMENT YEAR 20 1 0 - 1 1 . THE FIRST GROUND RAISED IN THE APPEAL OF THE REVENUE IS THAT THE LD. CIT(A) HAS ERRED IN ALLOWING DEPRECIATION AT 60% ON NETWORK ACCESSORIES, VGA PATCH CABLE & CONNEC TORS AND AUDIO VIDEO CONFERENCING EQUIPMENT LCD PROJECTORS TREATING THEM AS COMPUTERS AND THE SECOND GROUND IS THAT THE LD. CIT(A) I.T.A. NO. 906 /M/16 2 HAS ERRED IN ALLOWING DEPRECIATION AT 15% ON PACE FINGER PRINT READER WITH PROXIMITY SENSOR ON TCP, FIRE ALARM SYSTEM AND P UBLIC ADDRESS SYSTEM. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF ASSEMBLING AND SALE OF AUTO TRANSMISSION UNITS AND FILED ITS RETURN OF INCOME ADMITTING TOTAL INCOME AT .10,11,42,851/ - . THE RETURN FILED BY THE ASSESS EE WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 [ ACT IN SHORT] . THEREAFTER, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) OF THE ACT DATED 27.09.2011 WAS SERVED ON THE ASSESSEE. IN RESPONSE THERETO, THE ASSESSEE FILED ALL DETAILS. AFTER EXAMINING THE DETAILS FILED BY THE ASSESSEE, THE ASSESSING OFFICER HAS COMPLETED THE ASSESSMENT UNDER SECTION 143(3) R.W.S. 92CA OF THE ACT ASSESSING TOTAL INCOME OF THE ASSESSEE AT .11,00,98,242/ - AFTER MAKING DISALLOWANCE OF EXCESS CLAIM OF DEPRECIATION ON VARIOUS ITEMS. 3. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND VARIOUS CASE LAW RELIED ON BY THE ASSE SSEE, T HE LD. CIT(A) PARTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE . 4. ON BEING AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AND AGITATED WITH REGARD TO ALLOWANCE OF 60% DEPRECIATION ON NETWORK ACCESSORIES AS WELL AS ALLOWANCE OF 15% DEPRECI ATION ON PACE FINGER PRINT READER AND OTHER ITEMS. THE LD. DR HAS STRONGLY CONTENDED THAT THE LD. I.T.A. NO. 906 /M/16 3 CIT(A) HAS CONTENDED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF ASSEMBLING AND SALE OF AUTO TRANSMISSION KITS AND PROVIDING SALES SUPPORT SERVICES AND NO T IN THE BUSINESS OF COMPUTERS AND PLEADED THAT THE ORDERS OF THE LD. CIT(A) ON BOTH THE ISSUES SHOULD BE REVERSED. 5. PER CONTRA, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE NETWORK ACCESSORIES AND VGA PATCH CABLE & CONNECTORS ARE COMPUTER PERIPHERALS AND ARE ELIGIBLE FOR DEPRECIATION @ 60% HE FURTHER SUBMITTED THAT THE AUDIO VIDEO CONFERENCING EQUIPMENT, LCD PROJECTOR, PACE FINGER PRINT READER, FIRE ALARM SYSTEM, PUBLIC ADDRESS SYSTEM, ETC. ARE TO BE CLASSIFIED AS PLANT AND MACHINERY, WHICH WERE ACTUALLY INSTALLED AT THE FACTORY PREMISES OF THE ASSESSEE, AND ELIGIBLE FOR DEPRECIATION @ 15% . THUS, THE LD. COUNSEL FOR THE ASSESSEE HAS PRAYED THAT THE ORDERS OF THE LD. CIT(A) SHOULD BE SUSTAINED. 6 . WE HAVE HEARD BOTH SIDES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE ASSESSEE HAS CLAIMED DEPRECIATION @ 60% ON FOLLOWING ITEMS . S.NO. PARTICULARS OF ASSETS AMOUNT 1. NETWORK ACCESSORIES 1,46,34,300 2. VGA PATCH CABLE & CONNECTORS 37,688 3. AUDIO VIDEO CONFERENCING EQUIPMENT LCD PROJECTOR 20,20,320 4. PACE FINGER PRINT READER WITH PROXIMITY SENSOR ON TCP 2,93,625 5. FIRE ALARM SYSTEM 6,98,702 6. PUBLIC ADDRESS SYSTEM 2,26,155 TOTAL 1,79,10,790 I.T.A. NO. 906 /M/16 4 ON VERIFICATION OF DETAILS FILED BY T HE ASSESSEE, THE ASSESSING OFFICER HAS ALLOWED DEPRECIATION @ 10% AND THEREBY, THE DIFFERENCE IN CLAIM WAS BROUGHT TO TAX TO THE EXTENT OF .89,55,391/ - . 6.1 THE DEPRECIATION FOR ITEMS LISTED IN SL. 1 TO 3 WAS TREATED AS BUILDINGS AND OFFICE EQUIPMENTS AND THUS, THE ASSESSING OFFICER ALLOWED DEPRECIATION @ 10% ONLY. THESE ITEMS CANNOT FUNCTION INDEPENDENTLY AND CAN ONLY FUNCTION EITHER WITH THE COMPUTER OR LAPTOP AND HENCE THESE WOULD FORM PART OF COMPUTER ONLY AND ELIGIBLE FOR HIGHER DEPRECIATION @ 60%. SIMILARLY, ITEMS LISTED IN SL. NO. 4 TO 6 ARE ALSO IN THE NATURE OF OFFICE EQUIPMENTS AND THEREFORE WOULD BE ELIGIBLE FOR DEPRECIATION @ 1 5% AS HELD BY VARIOUS COURTS INCLUDING VARIOUS BENCHES OF THE TRIBUNAL. UNDER THESE CIRCUMSTANCES, THE LD. CIT(A) HAS RIGHTLY DIRECTED THE ASSESSING OFFICER TO ALLOW DEPRECIATION AS STATED ABOVE AND WE FIND NO INFIRMITY IN THE ORDERS OF THE LD. CIT(A) . HOW EVER, IN THE GROUNDS OF APPEAL, THE DEPARTMENT HAS DISPUTED THAT THE CLAIM NOT MADE IN THE RETURN OF INCOME CAN ONLY BE CLAIMED BY FILING A REVISED RETURN AS PER THE DECISION IN THE CASE OF GOETZE (INDIA) LTD. V. CIT (SC). BUT, IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS NOT DISPUTED THAT THE ASSESSEE HAS NOT MADE THE ABOVE CLAIMS IN THE ORIGINAL RETURN OF INCOME. THUS, THE OBJECTION RAISED IN THE GROUNDS OF APPEAL IS ACCORDINGLY REJECTED. I.T.A. NO. 906 /M/16 5 7 . IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED . ORDE R PRONOUNCED ON THE 03 RD MARCH, 201 7 AT CHENNAI. SD/ - SD/ - (A. MOHAN ALANKAMONY ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 03 . 03 .201 7 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPO NDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.