The Ropar Distt. Cooperative Milk Producers Union Ltd., Mohali V. DCIT, Mohali

ITA 991/CHANDI/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5426 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 28-04-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 02-07-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Keywords: Depreciation
• Section: 143(3); 32; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI D.K.SRIVASTAVA, ACCOUNTANT MEMBER AND MS.SUSHMA CHOWLA, JUDICIAL MEMBER ITA NOS.991 & 992 /CHD/2010 (ASSESSMENT YEARS : 2003-04 & 2006-07) THE ROPAR DISTT.COOPERATIVE MILK VS. THE D.C.I.T ., PRODUCERS UNION LTD., CIRCLE 6(1), MILK PLANT, MOHALI. MOHALI. PAN: AAAAT5977G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M.R.SHARMA RESPONDENT BY : SHRI N.K.SAINI, DR O R D E R PER SUSHMA CHOWLA, J.M, : BOTH THE APPEALS OF THE ASSESSEE ARE AGAINST THE S EPARATE ORDERS OF THE COMMISSIONER OF INCOME-TAX (A), DATED 30.4.2010 RELATING TO ASSESSMENT YEARS 2003-04 & 2006-07 AGAINST THE ORDE RS PASSED U/S 143(3) OF THE INCOME-TAX ACT. 2. BOTH THE APPEALS OF THE ASSESSEE ON THE SAME ISS UE WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLI DATED ORDER FOR THE SAKE OF CONVENIENCE. 3. THE GROUND NO.2 RAISED BY THE ASSESSEE IS COMMON IN BOTH THE ASSESSMENT YEARS AND READS AS UNDER : 2. THAT THE ORDER OF THE ASSESSING OFFICER AS UPHELD BY THE COMMISSIONER OF INCOME TAX (APPEALS) 2 CHANDIGARH DISALLOWING CLAIM OF DEPRECIATION AT RS.1,71,542/- ON HEAVY COMMERCIAL VEHICLES BEING MILK TANKER WITH IN THE MEANING OF CLAUSE (II) OF SUB-SECTION (1) OF SECTION 32 AND ALLOWING DEPRECIATION AT THE RATES APPLICABLE TO MOTOR CARS IS BAD IN LAW AND NEEDS TO SET ASIDE. 4. GROUND NO.3 RAISED BY THE ASSESSEE IN ASSESSMENT YEAR 2003-04 IS AS UNDER : 3. THAT ORDER OF THE ASSESSING OFFICER AS UPHELD B Y THE COMMISSIONER OF INCOME TAX (APPEALS) CHANDIGARH INITIATING RE-ASSESSMENT PROCEEDINGS BY WAY OF ISSU E OF NOTICE U/S 148 IS BAD IN LAW AND IS AGAINST THE JUDICIAL DECISION IN THIS BEHALF. 5. SHRI M.R.SHARMA APPEARED FOR THE ASSESSEE AND SH RI. N.K.SAINI APPEARED FOR THE REVENUE AND PUT-FORTH THEIR CONTEN TIONS. 6. THE LEARNED A.R. FOR THE ASSESSEE FAIRLY POINTED OUT THAT THE ISSUE WITH REGARD TO THE INITIATION OF ASSESSMENT PROCEED INGS THOUGH RAISED BEFORE THE CIT(A), HAS NOT BEEN ADDRESSED BY THE CI T(A). THE LEARNED A.R. POINTED OUT THAT THE ISSUE MAY BE SENT BACK TO THE FILE OF THE CIT(A) FOR ADJUDICATION. 7. THE LEARNED D.R. FOR REVENUE POINTED OUT THAT IN VIEW OF THE REASONS FOR REOPENING, THE ASSESSMENT PROCEEDINGS H AS BEEN RIGHTLY INITIATED UNDER SECTION 147/148 OF THE ACT. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE GRIEVANCE OF THE ASSESSEE IN THIS REGARD IS THAT NO PROPER ADJUDICATION OF THE ISSUE WAS DONE BY THE CIT(A). FROM THE PERUSA L OF THE ORDER OF CIT(A) IT TRANSPIRES THAT THOUGH THE CIT(A) HAS REF ERRED TO THE GROUND OF APPEAL BUT HAS NOT ADJUDICATED UPON THE SAME. UN DER THE PROVISIONS OF 3 SECTION 250(6) OF THE ACT IT IS IMPERATIVE UPON THE CIT(A) TO PASS AN ORDER IN WRITING DISPOSING OFF THE APPEAL AND FURTH ER THE CIT(A) SHALL STATE THE POINTS FOR DETERMINATION, THE DECISION TH EREON AND REASON FOR THE DECISION. IN THE PRESENT CASE WE FIND THAT THE CIT(A) TO HAVE FAILED TO DISCHARGE ITS DUTY IN GIVING THE POINTS FOR DETE RMINATION/DECISION ON THE MERITS OF THE CASE. IN THE INTEREST OF NATURA L JUSTICE WE DEEM IT FIT TO RESTORE THE ISSUE BACK TO THE FILE OF THE CIT(A) TO RE-ADJUDICATE THE ISSUE AFTER AFFORDING REASONABLE OPPORTUNITY OF HEA RING TO THE ASSESSEE. THE GROUND NO.2 RAISED BY THE ASSESSEE IS ALLOWED F OR STATISTICAL PURPOSES. 9. NOW COMING TO THE ISSUE RAISED BY THE ASSESSEE A GAINST THE MERITS OF THE ADDITION, THE ISSUE RAISED BY THE ASSESSEE I N BOTH THE YEARS UNDER APPEAL IS IN CONNECTION WITH THE RATE OF DEPRECIATI ON ALLOWABLE ON THE MILK TANKERS OWNED BY THE ASSESSEE. THE ASSESSEE H AD CLAIMED DEPRECIATION ON THE SAID MILK TANKERS @ 40% WHICH WAS RESTRICTED TO 25% BY THE ASSESSING OFFICER. THE CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER AND ACCORDINGLY EXCESS DEPRECIATION OF RS.1,71,542/- WAS DISALLOWED IN ASSESSMENT YEAR 2003-04. SIMILARLY, IN ASSESSMENT YEAR 2006-07 THE CLAIM OF THE ASSESSEE WAS @ 30% OF THE WDV WHICH WAS RESTRICTED TO 15% BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A), RESU LTING IN DISALLOWANCE OF RS.79,439/-. THE ASSESSEE IS IN A PPEAL AGAINST THE AFORESAID ORDERS OF THE AUTHORITIES BELOW. ON PER USAL OF THE RECORD AND THE RATES OF DEPRECIATION FOR THE CAPTIONED YEARS W E FIND THAT THE RATES APPLICABLE FOR THE ASSESSMENT YEARS 2003-04 AND 200 6-07 ARE AT VARIANCE. UNDER OLD APPENDIX-I APPLICABLE FOR ASSESSMENT YEAR S 2003-04 TO 2005- 06, THE TABLE OF RATES AT WHICH DEPRECIATION IS ADM ISSIBLE IS PROVIDED UNDER PART-A, ITEM NO.III MACHINERY & PLANT AS UNDE R : 4 (1) MACHINERY AND PLANT OTHER THAN THOSE COVERED BY SUB-ITEMS (2), (3) AND (8) BELOW. (2) MOTOR CARS, OTHER THAN THOSE USED IN A BUSINESS OF RUNNING THEM ON HIRE ACQUIRED OR PUT TO USE ON OR AFTER THE 1 ST DAY OF APRIL, 1990. (3) (I) AEROPLANES AEROENGINES (II) MOTOR BUSES, MOTOR LORRIES AND MOTOR TAXIS USED IN A BUSINESS OF RUNNING THEM ON HIRE. (III) COMMERCIAL VEHICLE WHICH IS ACQUQIRED BY THE ASSESSEE ON OR AFTER THE 1 ST DAY OF OCTOBER, 1998, BUT BEFORE THE 1 ST DAY OF APRIL, 1999 AND IS PUT TO USE FOR ANY PERIOD BEFORE THE 1 ST DAY OF APRIL, 1999 FOR THE PURPOSES OF BUSINESS OR PROFESSION IN ACCORDANCE WITH THE THIRD PROVISO TO CLAUSE (II) OF SUB-SECTION (1) OF SECTION 32. (IV) NEW COMMERCIAL VEHICLE WHICH IS ACQUIRED ON OR AFTER THE 1 ST DAY OF OCTOBER, 1998, BUT BEFORE THE 1 ST DAY OF APRIL, 1999 IN REPLACEMENT OF CONDEMNED VEHICLE OVER 15 YEARS OF AGE AND IS PUT TO USE FOR ANY PERIOD BEFORE THE 1 ST DAY OF APRIL, 1999 FOR THE PURPOSES OF BUSINESS OR PROFESSION IN ACCORDANCE WITH THE THIRD PROVISO TO CLAUSE (II) OF SUB-SECTION (1) OF SECTION 32. (V) NEW COMMERCIAL VEHICLE WHICH IS ACQUIRED ON OR AFTER THE 1 ST DAY OF APRIL, 1999, BUT BEFORE THE 1 ST DAY OF APRIL, 2000 IN REPLACEMENT OF CONDEMNED VEHICLE OVER 15 YEARS OF AGE AND IS PUT TO USE BEFORE THE 1 ST DAY OF APRIL, 2000 FOR THE PURPOSES OF BUSINESS OR PROFESSION IN ACCORDANCE WITH THE SECOND PROVISO TO CLAUSE (II) OF SUB-SECTION (1) OF SECTION 32. 5 10. UNDER ITEM III (III) TO (V) THE COMMERCIAL VEHI CLES ACQUIRED BY THE ASSESSEE DURING THE SPECIFIED PERIOD ARE ELIGIBLE F OR DEPRECIATION @ 40% AND AS ADMITTED BY THE LEARNED A.R. FOR THE ASSESSE E THE SAID MILK VANS OWNED BY THE ASSESSEE WERE NOT ACQUIRED BY THE ASSE SSEE IN THE SAID PERIOD AND HENCE THE SAID RATES WERE NOT ATTRACTED IN THE CASE OF THE ASSESSEE. 11. NOW COMING TO THE CASE OF THE ASSESSEE, THE CON TENTION OF THE ASSESSEE IN THIS REGARD WAS THAT THE MILK VANS OWNE D BY THE ASSESSEE WERE KIND OF MOTOR LORRIES WHICH WERE BEING RUN ON HIRE FOR CARRYING ON THE BUSINESS OF THE ASSESSEE. THE LEARNED A.R. FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE WAS TO COLLECT MILK AND SUPPLY THE SAME TO MOTHER DIARY IN ITS MILK VANS AND HENCE, THE PLEA O F RUNNING THE MILK VANS ON HIRE. WHEN CONFRONTED REGARDING THE APPLIC ATION OF TDS PROVISIONS TO SUCH HIRING OF VEHICLES, THE LEARNED A.R. POINTED OUT THAT THE SAID MILK VANS WERE UTILIZED FOR CARRYING ON TH E BUSINESS OF THE ASSESSEE AND THE CHARGES WERE PART OF SALE. 12. IN THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND NO MERITS IN THE CONTENTION OF THE ASSESSEE THAT TH E MILK VANS ARE ENGAGED IN THE BUSINESS OF HIRING. THE ASSESSEE IS UTILIZING THE SAID MILK VANS FOR TRANSPORTATION OF MILK COLLECTED FROM DIFF ERENT VENDORS FOR SUPPLY TO MOTHER DIARY. THE SAID MILK VANS ARE ENG AGED IN THE BUSINESS CARRIED ON BY THE ASSESSEE AND HENCE CANNOT BE SAID TO BE ENGAGED IN THE BUSINESS OF RUNNING THEM ON HIRE. ACCORDINGLY, THE ENHANCED RATE BY 40% IN ALLOWING DEPRECIATION ON THE SAID ASSET IS NOT ALLOWABLE TO THE 6 ASSESSEE. UNDER ITEM NO.III (1) THE RATE OF 25% FO R ALLOWING DEPRECIATION ON MACHINERY AND PLANT OTHER THAN THOS E COVERED BY SUB- ITEMS (2), (3) AND (8) BELOW IS PROVIDED I.E. GENER AL RATE OF ALLOWING DEPRECIATION ON MACHINERY & PLANT IS 25%. HOWEVER, IN RESPECT OF MOTOR CAR OTHER THAN THOSE BEING PLIED IN THE BUSINESS OF RUNNING ON HIRE, ACQUIRED OR PUT TO USE ON OR AFTER 1 ST APRIL, 1990 IS 20% UNDER ITEM-III (2), WHICH IS NOT APPLICABLE TO THE FACTS OF THE PR ESENT CASE. AS THE CASE OF THE ASSESSEE DOES NOT FALL WITHIN SUB-ITEM (2),( 3) AND (8) UNDER ITEM III OF THE OLD APPENDIX-I, THE ASSESSEE IS ENTITLED TO THE CLAIM OF DEPRECIATION @ 25% ON THE MILK VANS OWNED BY IT. C ONFIRMING THE ORDER OF THE CIT(A) WE DISMISS THE GROUND NO.2 RAISED BY THE ASSESSEE IN THIS REGARD FOR ASSESSMENT YEAR 2003-04. 13. IN ASSESSMENT YEAR 2006-07, SIMILAR RATE OF DEP RECIATION ALLOWABLE AS PER ITEM III(1) IS 15% AND HENCE, THE ASSESSEE I S ENTITLED TO THE DEPRECIATION @ 15% ON THE MILK VANS OWNED BY IT. CONFIRMING THE ORDER OF THE CIT(A) WE DISMISS THE GROUND NO.2 RAIS ED BY THE ASSESSEE IN THIS REGARD FOR ASSESSMENT YEAR 2006-07. 14. IN THE RESULT, APPEAL OF THE ASSESSEE FOR ASSES SMENT YEAR 2003-04 IS PARTLY ALLOWED AND APPEAL FOR ASSESSMENT YEAR 2006- 07 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH DAY OF APRIL, 2011. SD/- SD/- (D.K.SRIVASTAVA) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 29 TH APRIL , 2011 RATI COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. 7 8