Rahee Infratech Ltd., Kolkata V. DCIT, CC-XXI, Kolkata, Kolkata

ITSSA 17/KOL/2015

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3593 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 11 month(s) 20 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 05-01-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 16-01-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G HANGSHING
• Assessee Lawyers: MANISH TIWARI
• Keywords: Depreciation; Search and seizure
• Section: 143(3); 153A; 54; 132; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA [BEFORE HONBLE SHRI N.V.VASUDEVAN, JM & HONBLE SHRI M.BALAGANESH, AM ] I .T.(SS).A NOS. 17 & 18/KOL/2015 ASSESSMENT YEARS : 2010- 11 & 2011-12 RAHEE INFRATECH LTD. -VS- DCIT, CC-XXI, KOLKATA [PAN: AABCR 2809 Q] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI MANISH TIWARI , AR FOR THE RESPONDENT : SHRI G. HANGSHING, CIT, DR DATE OF HEARING : 03.01.2018 DATE OF PRONOUNCEMENT : 05.01.2018 ORDER PER M.BALAGANESH, AM 1. THESE APPEALS ARE PREFERRED BY THE ASSESSEE AGAI NST THE ORDERS OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-21, KOLKATA [I N SHORT THE LD CITA] VIDE APPEAL NOS. 324 & 325/CC-4(4)/CIT(A)-21/14-15 DATED 27.11.2014 FOR ASST YEARS 2010-11 & 2011-12 RESPECTIVELY. ASSESSME NTS WERE FRAMED BY THE LEARNED DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE XXI, KOLKATA [ IN SHORT THE LD AO] U/S 154/153A/ 143(3) OF THE INC OME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASST YEA RS 2010-11 & 2011-12 RESPECTIVELY DATED 8.9.2014. SINCE IDENTICAL FACT S ARE INVOLVED IN BOTH THE APPEALS, THEY ARE TAKEN UP TOGETHER AND DISPOSED OF F BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2 IT(SS)A NOS.17&18/KOL/2015 RAHEE INFRATECH LTD. A.YRS.2010-11 & 2011-12 2 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS A S TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN UPHOLDING THE ACTION OF THE LD. AO IN REDUCING THE CLAIM OF DEPRECIATION ON COMMERCIAL VEHICLES IN THE PROCEEDI NGS U/S 154 OF THE ACT, IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASSESS EE IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING OF RAILWAY TRACKS, FASTEN ING AND OTHER RELATED PRODUCTS AND CONSTRUCTION OF RAILWAY BRIDGES AND OT HER INFRASTRUCTURE PROJECTS. A SEARCH AND SEIZURE OPERATION U/S 132 OF THE ACT W AS CARRIED OUT IN THE RESIDENTIAL AND OFFICE PREMISES OF RAHEE GROUP ON 22.09.2011. THE ASSESSEE COMPANY IS THE FLAGSHIP COMPANY OF THE SAID GROUP. THE NOTICE U/S 153A OF THE ACT WAS ISSUED ON 22.01.2013 FOR THE ASSESSMENT YEA RS 2010-11 AND 2011-12 AMONG OTHER YEARS. IN RESPONSE TO THE SAME, THE ASS ESSEE FILED ITS RETURN OF INCOME ON 06.05.2013 DISCLOSING RS. 3,48,15,630/- F OR THE ASSESSMENT YEAR 2010-11 AND RS. 3,25,97,507/- FOR THE ASSESSMENT YE AR 2011-12. THE ASSESSMENT WAS COMPLETED U/S 153A OF THE ACT ON 31. 03.2014 FOR BOTH THE ASSESSMENT YEARS AFTER MAKING CERTAIN ADDITIONS. TH IS ASSESSMENT WAS LATER SOUGHT TO BE MODIFIED, IN VIEW OF THE FACT THAT THE LD. AO FOUND THAT THE ASSESSEE HAD CLAIMED DEPRECIATION ON COMMERCIAL VEH ICLES @50% INSTEAD OF 15%. ACCORDINGLY, THE NOTICE U/S 154 OF THE ACT WAS ISSUED ON THE ASSESSEE ON 06.08.2014. IN RESPONSE TO THE SAID NOTICE, THE ASS ESSEE DID NOT GIVE ANY FACTUAL SUBMISSIONS BEFORE THE LD. AO BUT INSTEAD SOUGHT TO EXPLAIN THAT THERE IS NO MISTAKE WHICH IS GLARING AND APPARENT FROM THE RECO RD SO AS TO INITIATE SECTION 154 PROCEEDINGS IN THE INSTANT CASE. IT WAS ALSO PL EADED THAT THE CLAIM OF DEPRECIATION ON COMMERCIAL VEHICLES WAS A DEBATABLE ISSUE AND HENCE, THE SAME CANNOT BE THE SUBJECT MATTER OF RECTIFICATION U/S 1 54 OF THE ACT. THE LD. AO 3 IT(SS)A NOS.17&18/KOL/2015 RAHEE INFRATECH LTD. A.YRS.2010-11 & 2011-12 3 HOWEVER OBSERVED THAT THE ASSESSEE HAD FURNISHED TH E DEPRECIATION CHART TOGETHER WITH LIST OF ASSETS WITH THEIR RESPECTIVE DATES OF INSTALLATION / PUT TO USE IN RESPECT OF EACH OF THE ASSETS THAT WERE ADDED DU RING THE YEAR UNDER CONSIDERATION AND THAT THESE DETAILS WERE FILED ALO NG WITH RETURN OF INCOME BY THE ASSESSEE. FROM THE PERUSAL OF THE SAID DETAILS IN THE DEPRECIATION CHART, THE LD. AO FOUND THAT THE DATES OF PUT TO USE OF COMMER CIAL VEHICLES WERE AFTER SEPTEMBER, 2009. THE SPECIAL RATE OF DEPRECIATION I S APPLICABLE ON COMMERCIAL VEHICLES ACQUIRED DURING THE PERIOD 01.01.2009 TO 3 0.09.2009. SINCE IN THE INSTANT CASE, THE VEHICLES WERE ACQUIRED AFTER 30.0 9.2009 AS IS EVIDENT FROM THE DETAILS OF DEPRECIATION CHART, THE LD. AO REDUCED T HE CLAIM OF DEPRECIATION ON THESE COMMERCIAL VEHICLES AT THE NORMAL RATE OF 15% AND DISALLOWED THE EXCESS 35% CLAIMED BY THE ASSESSEE AND MADE ADDITIONS THE RETO TO THAT EFFECT FOR BOTH THE ASSESSMENT YEARS UNDER APPEAL BEFORE US. THIS A CTION OF THE LD. AO WAS UPHELD BY THE LD. CIT(A). AGGRIEVED, THE ASSESSEE I S IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS: I.T.(SS)A. NO. 17/KOL/2015 FOR ASSESSMENT YEAR 2010 -11 1.A) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN UPHOLDING THE ACTION OF ASSESSING OFFICER WHO PA SSED ORDER U/S 154/153A/143(3) OF INCOME TAX ACT, 1961 TO ENHANCE TOTAL INCOME FOR WITHDRAWAL OF SO CALLED EXCESS DEPRECIATION ALLOWAN CE OF RS. 3,89,444/-. 2. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, A DDUCE, AMEND ANY GROUND OR GROUNDS ON OR AT THE TIME OF HEARING OF THE APPEAL. I.T.(SS).A. NO. 18/KOL/2015 FOR ASSESSMENT YEAR 201 1-12 4 IT(SS)A NOS.17&18/KOL/2015 RAHEE INFRATECH LTD. A.YRS.2010-11 & 2011-12 4 1.A) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN UPHOLDING THE ACTION OF ASSESSING OFFICER WHO PA SSED ORDER U/S 154/153A/143(3) OF INCOME TAX ACT, 1961 TO ENHANCE TOTAL INCOME FOR WITHDRAWAL OF SO CALLED EXCESS DEPRECIATION ALLOWAN CE OF RS. 52,62,578/-. 2. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, A DDUCE, AMEND ANY GROUND OR GROUNDS ON OR AT THE TIME OF HEARING OF THE APPEAL. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS. THE LD. AR PLACED ON RECORD BEFORE US THE COPY OF THE DEPRECIATION CHART TOGETHER WITH TH E DETAILS OF DATE OF PUT TO USE OF EACH OF THE ASSETS. FROM THE PERUSAL OF THE SAME , WE ARE SATISFIED THAT THE ASSETS WERE PUT TO USE ONLY AFTER THE PERIOD 30.09. 2009 AND THAT THE ASSESSEE IS NOT ENTITLED FOR EXCESS RATE OF DEPRECIATION @ 50%. HOWEVER, THE LD. AR ALTERNATIVELY PLEADED THAT THE ASSESSEE HAD ALSO DE RIVED HIRE CHARGES INCOME DURING THE COURSE OF EXECUTION OF ITS VARIOUS INFRA STRUCTURE PROJECTS. HE PLEADED THAT THESE COMMERCIAL VEHICLES WERE USED BY THE AS SESSEE IN ITS INFRASTRUCTURE PROJECTS AND WERE ALSO USED FOR LETTING OUT ON HIRE WHILE EXECUTING THE INFRASTRUCTURE PROJECTS, WHICH HAD DERIVED INCOME F ROM THE HIRE CHARGES TO THE ASSESSEE. ACCORDINGLY, THE ASSESSEE WOULD BE ENTITL ED TO THE SPECIAL RATE OF DEPRECIATION @ 30% APPLICABLE FOR VEHICLES USED IN THE BUSINESS OF RUNNING THEM ON HIRE. HE ARGUED THAT THESE MATTERS WERE NO T FACTUALLY EXAMINED BY THE LD. AO AND THE LD. AO MERELY PROCEEDED ON THE DETAI LS AVAILABLE IN THE DEPRECIATION CHART WITHOUT GIVING PROPER OPPORTUNIT Y TO THE ASSESSEE. ACCORDINGLY, HE PRAYED FOR SETTING ASIDE OF THE ISS UE TO THE FILE OF LD. AO FOR DE NOVO ADJUDICATION. IN RESPONSE TO THIS, THE LD. DR FAIRLY CONCEDED FOR REMITTING BACK THE ISSUE TO THE FILE OF THE LD. AO AS THE MATTERS INVOLVED FACTUAL VERIFICATION. IN THESE FACTS AND CIRCUMSTAN CES, WE DEEM IT FIT AND APPROPRIATE TO REMIT THIS ISSUE TO THE FILE OF THE LD. AO, IN THE INTEREST OF JUSTICE 5 IT(SS)A NOS.17&18/KOL/2015 RAHEE INFRATECH LTD. A.YRS.2010-11 & 2011-12 5 AND FAIR PLAY, FOR DE NOVO ADJUDICATION OF THE ISS UE IN DISPUTE BEFORE US FOR BOTH THE ASSESSMENT YEARS UNDER APPEAL. ACCORDINGLY , THE GROUNDS RAISED BY THE ASSESSEE FOR BOTH THE YEARS ARE ALLOWED FOR STA TISTICAL PURPOSES. 8. IN THE RESULT, THE APPEALS OF THE ASSESSEE IN IT (SS)A NOS . 17 & 18 /KOL/2015 FOR ASST YEARS 2010-11 AND 2011-12 RESPECTIVELY ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 05.0 1.2018 SD/- SD/- [N.VASUDEVAN] [ M.BALAGANESH ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 05.01.2018 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. RAHEE INFRATECH LTD., 4, HO-CHI-MINH SARANI, FLA T-1C, KOLKATA-700071 2. DCIT, CC-XXI, AAYKAR BHAWAN POORVA, 110, SHANTI PALLY, KOLKATA-700107 3. C.I.T(A)- 4. C.I.T.- KOLKAT A. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S