DCIT, Circle -1, Kolkata, Kolkata V. M/s Shivam India Limited, Kolkata

ITA 945/KOL/2012

• Counselvise Citation: 94523514 RSA 2012
• Duration Of Justice: 2 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 18-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR
• Assessee Lawyers: K K CHHAPARIA FCA I T
• Keywords: Reopening of assessment; Depreciation; Additional depreciation

Judgement Text

I.T .A. NO . 945 & 946 /KOL./201 2 ASSESSMENT YEAR : 2006 - 07 & 2008 - 09 & C.O. NO. 72/KOL/2012 (IN ITA NO. 945/KOL/2012) ASSESSMENT YEAR: 200 6 - 20 0 7 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI N.K. SAINI (ACCOUNTANT MEMBER) , AND SHRI GEORGE MATHAN (JUDICIAL MEMBER) I.T.A. NO. 945 /KOL . / 20 1 2 ASSESSMENT YEAR : 200 6 - 20 0 7 & I.T.A. NO. 946 /KOL./ 20 12 ASSESSMENT YEAR : 200 8 - 2009 DEPUTY COMMISSIONER OF INCOME TAX, ........ .... ............ .. .APP ELL ANT CIRCLE - 1, KOLLKATA, P - 7, CHOWRINGHEE SQUARE, KOLKATA - 700 069 - VS. - M/S. SHIVAM INDIA LIMITED,.................... .................. . RESPONDENT ROOM NO.1, 2 ND FLOOR, 3, WOOD STREET, KOLKATA - 700 016 [PAN : AAECS 8326 A] & C.O. NO. 72/KOL/2012 (ARISING OUT OF I.T.A. NO. 945/KOL/2012) ASSESSMENT YEAR : 2006 - 2007 M/S. SHIVAM INDIA LIMITED,...................................... . CROSS OBJECT OR ROOM NO.1, 2 ND FLOOR, 3, WOOD STREET, KOLKATA - 700 016 [PAN : AAECS 8326 A] - VS. - DEPUTY COMMISSIONER OF INCOME TAX,............ ............ .. . RESPONDENT CIRCLE - 1, KOLLKATA, P - 7, CHOWRINGHEE SQUARE, KOLKATA - 700 069 APPEARANCES BY: SHRI VIJAY KUMA R, CIT, D.R., FOR THE DEPARTMENT SHRI K.K. CHHAPARIA , FCA , FOR THE ASSESSEE I.T .A. NO . 945 & 946 /KOL./201 2 ASSESSMENT YEAR : 2006 - 07 & 2008 - 09 & C.O. NO. 72/KOL/2012 (IN ITA NO. 945/KOL/2012) ASSESSMENT YEAR: 200 6 - 20 0 7 PAGE 2 OF 5 DATE OF CONCLUDING THE HEARING : JANUARY 27 , 2 01 5 DATE OF PRONOUNCING THE ORDER : JANUARY 30 , 201 5 O R D E R PER GEORGE MATHAN : I.T.A. 945/KOL/2012 IS AN APPEAL FI LED BY THE REVENU E AGAINST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 1 , KOLKATA IN APPEAL NO. 114/ CIT (A) - 1/CIR - 1/10 - 11 DATED 09.03.2012 FOR THE ASSESSMENT YEAR 2006 - 07. I.T.A. 946/KOL/2012 IS AN APPEAL FILED BY THE REVENUE AGAINST T HE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 1, KOLKATA IN APPEAL NO. 209 /CIT(A) - 1/CIR - 1/10 - 11 DATED 09.03.2012 FOR THE ASSESSMENT YEAR 200 8 - 0 9, AND C.O. 72/KOL/2012 IS A CROSS OBJECTION FILED BY THE ASSESSEE IN THE REVENUE S APPEAL IN I.T.A. 945/KOL/2012. 2 . SHRI VIJAY KUMAR, CIT, D.R., REPRESENTED ON BEHALF OF THE REVENUE AND SHRI K.K. CHHAPARIA , F.C.A. , REPRESENTED ON BEHALF OF THE ASSESSEE . 3. AS THE ISSUES IN BOTH THE REVENUE S APPEALS ARE IDENTICAL, THE SAME ARE BEING DISPOSED O F BY THIS COMMON ORDER. IN THE CROSS OBJECTION, THE ASSESSEE HAS CHALLENGED THE REOPENING OF ASSESSMENT. 4 . AT THE TIME OF HEARING, IT WAS SUBMITTED BY THE LD. CIT, D.R. THAT THE ISSUE IN THE REVENUE S APPEALS WAS AGAINST THE ACTION OF THE LD. CIT(APPEAL S) IN DIRECTING THE ASSESSING OFFICER TO ALLOW DEPRECIATION ON ELECTRICAL INSTALLATION BY HOLDING THE SAME AS PLANT AND MACHINERY. IT WAS THE SUBMISSION THAT IN THE COURSE OF ASSESSMENT, IT WAS NOTICED THAT THE ASSESSEE HAD STARTED THE BUSINESS OF MANUFACT URING OF MS BILLET AND TMT BARS AND COKE. THE ASSESSEE HAD CLAIMED DEPRECIATION @ 15% ON THE ELECTRICAL INSTALLATIONS AND FURTHER ADDITIONAL DEPRECIATION OF 10%. IT WAS I.T .A. NO . 945 & 946 /KOL./201 2 ASSESSMENT YEAR : 2006 - 07 & 2008 - 09 & C.O. NO. 72/KOL/2012 (IN ITA NO. 945/KOL/2012) ASSESSMENT YEAR: 200 6 - 20 0 7 PAGE 3 OF 5 THE SUBMISSION THAT THE ASSESSING OFFICER HAD HELD THAT THE ELECTRICAL EQUIPMENT WAS EL IGIBLE FOR DEPRECIATION ONLY AT 15% AS THE SAME FELL WITHIN THE ELECTRICAL FITTINGS WHICH WERE REQUIRED FOR THE POWER DISTRIBUTION TO THE PLANT AND MACHINERY. IT WAS THE SUBMISSION THAT THE ISSUE COULD BE RESTORED TO THE FILE OF ASSESSING OFFICER FOR RE - ADJUDICATION. 5. IN REPLY, LD. A.R. SUBMITTED THAT THE ELECTRICAL EQUIPMENTS, ON WHICH DEPRECIATION HAD BEEN CLAIMED AT 15%, WERE PART OF THE PLANT AND MACHINERY. IT WAS THE SUBMISSION THAT WHAT IS MENTIONED AS ELECTRICAL FITTINGS IN THE DEPRECIATION SCHE DULE WERE ONLY ELECTRICAL WIRING, SWITCHES, SOCKETS, ETC. WHICH WERE NORMALLY USED FOR OFFICE PURPOSES AND NOT PART OF THE PLANT AND MACHINERY. LD. A.R. DREW OUR ATTENTION TO PAGE 2 OF THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2006 - 07. IT WAS THE SUBMIS SION THAT THE ASSESSING OFFICER HAD BROUGHT OUT A CHART OF VARIOUS EXPENDITURES IN RESPECT OF THE ELECTRICAL PARTS OF PLANT AND MACHINERY WHICH COSTS MORE THAN RS.5 LAKHS. IT WAS THE SUBMISSION THAT THE ELECTRICAL INSTALLATION ON WHICH THE ASSESSEE HAD CLA IMED DEPRECIATION AT 15% BEING PART OF PLANT AND MACHINERY WAS LIABLE TO BE ALLOWED DEPRECIATION @ 15%. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERUSAL OF THE ITEMS AS MENTIONED IN PAGE 2 OF THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2006 - 07, WHI CH ARE SUBSTANTIALLY THE ELECTRICAL ITEMS IN RESPECT OF THE CLAIM OF DEPRECIATION , SHOWS THAT THESE ARE ITEMS WHICH FORM PART OF THE PLANT AND MACHINERY. THESE ITEMS ARE NOT SIMPLE ELECTRICAL FITTINGS , FOR EXAMPLE INDUSTRIAL CABLE S , POWER DISTRIBUTION BOAR D, CON T ROL CABIN, CONVERTER PANEL, ETC. DO NOT HAVE STANDARD A LONE FUNCTION. T HEY ARE PART OF THE PLANT AND MACHINERY. THE ELECTRICAL FITTINGS AS MENTIONED BY THE INCOME TAX RULES ON WHICH DEPRECIATION IS SPECIFIED AT 10% ARE SUCH ITEMS WHICH CAN FUNCTION ON A STANDARD A LONE BASIS SUCH AS FAN, LIGHT AND THE ATTACHMENTS THERETO REPRESENTING WIRES, SWITCHES, ETC. THE ITEMS I.T .A. NO . 945 & 946 /KOL./201 2 ASSESSMENT YEAR : 2006 - 07 & 2008 - 09 & C.O. NO. 72/KOL/2012 (IN ITA NO. 945/KOL/2012) ASSESSMENT YEAR: 200 6 - 20 0 7 PAGE 4 OF 5 WHICH HAVE BEEN MENTIONED IN PAGE 2 OF THE ASSESSMENT ORDER CLEARLY ARE NOT SIMPLE ELECTRICAL FITTINGS. THESE GO TO FORM PART OF THE PLAN T AND MACHINERY. CONSEQUENTLY THE SAME WOULD HAVE TO BE HELD TO BE ELIGIBLE FOR DEPRECIATION AT THE RATE PROVIDED FOR PLANT AND MACHINERY. A PERUSAL OF THE ORDER OF THE LD. CIT(APPEALS) CLEARLY SHOWS THAT THE LD. CIT(APPEALS) HAS TAKEN INTO CONSIDERATION T HE DECISION OF THE HON BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. - OSWAL WOOLLEN MILLS LTD. REPORTED IN 289 ITR 261 AS ALSO THE DECISION OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF TRIBENI TISSUES LIMITED VS. - CIT REPORTED IN 190 ITR 487 (CAL.) TO HOLD THAT THE ELECTRICAL INSTALLATION WAS TO BE TREATED AS PART OF PLANT AND MACHINERY FOR DEPRECIATION AT THE SPECIFIED RATE PROVIDED FOR PLANT AND MACHINERY. REVENUE HAS NOT BEEN ABLE TO DISLODGE THIS SPECIFIC FINDING OF THE LD. CIT(APP EALS), CONSEQUENTLY THE FINDING OF THE LD. CIT(APPEALS) ON THIS ISSUE STANDS CONFIRMED. 7. IN THE RESULT, BOTH THE APPEALS OF REVENUE STAND DISMISSED. 8. IN RESPECT OF THE CROSS OBJECTION, AS THE APPEAL OF THE REVENU E HAS BEEN ADJUDICATED ON MERITS IN F AVOUR OF THE ASSESSEE, THE ISSUE OF RE - OPENING BECOMES ACADEMIC AND CONSEQUENTLY DISMISSED AS INFRUCTUOUS. 9. IN THE RESULT, BOTH THE APPEALS OF REVENUE AND CROSS OBJECTION FILED BY THE ASSESSEE STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JANUARY , 201 5 . SD/ - SD/ - N.K. SAINI GEORGE MATHAN ( ACCOUNTANT MEMBER) ( JUDICIAL MEMBER) KOLKATA, THE 30 TH D AY OF JANUARY , 201 5 I.T .A. NO . 945 & 946 /KOL./201 2 ASSESSMENT YEAR : 2006 - 07 & 2008 - 09 & C.O. NO. 72/KOL/2012 (IN ITA NO. 945/KOL/2012) ASSESSMENT YEAR: 200 6 - 20 0 7 PAGE 5 OF 5 COPIES TO : (1) DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 1, KOLL KATA, P - 7, CHOWRINGHEE SQUARE, KOLKATA - 700 069 (2) M/S. SHIVAM INDIA LIMITED, ROOM NO.1, 2 ND FLOOR, 3, WOOD STREET, KOLKATA - 700 016 (3) COMMISSIONER OF INCOME TAX (APPEALS) ( 4 ) COMMISSIONER OF INCOME TAX ( 5 ) THE DEPARTMENTAL REPRESENTATIV E ( 6 ) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA B ENCHES, KOLKATA LAHA/SR. P.S.