The DCIT, Central Circle-3, Surat V. Radha Madhav Corporation Ltd., Daman

ITSSA 257/AHD/2012

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 1671 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 29-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 29-02-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 14-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R I PATEL
• Assessee Lawyers: HARDIK V VORA
• Keywords: Depreciation; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI S.S. GODARA, JUDICIAL MEMBER) IT(SS)A. NOS: 241 & 257/AHD/2012 (ASSESSMENT YEARS: 2007-08 & 2009-2010) THE D.C.I.T., CENTRAL CIRCLE-3, SURAT V/S RADHA MADHAV CORPORATION LTD. 50/9, DAMAN INDUSTRIAL ESTATE, VILLAGE DUNETHA, DAMAN, 396210 (APPELLANT) (RESPONDENT) PAN: AACCR 9357C APPELLANT BY : SHRI R.I. PATEL, CIT/D.R. RESPONDENT BY : SHRI HARDIK V. VORA, A.R. ( )/ ORDER DATE OF HEARING :29 -02-2016 DATE OF PRONOUNCEMENT : 29 -02-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: IT(SS)A NO. 241/AHD/2012 FOR A.Y. 2007-08 1. THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF LD. CIT(A)-II, AHMEDABAD DATED 21.02.2012 PERTAINING TO A.Y. 2007-08. IT(SS)A NOS. 241 & 257/AHD/2012 . A.YS.2007-08 & 2009-10 2 2. THE REVENUE IS AGGRIEVED BY THE DELETION OF THE ADD ITION OF RS. 15,30,054/- MADE ON ACCOUNT OF UNACCOUNTED SALES. 3. AS IT CAN BE SEEN FROM THE GROUNDS OF APPEAL, THE I MPUGNED AMOUNT IS 15,30,054/- AND THE TAX ON WHICH COMES TO LESS THAN RS. 10 LAKHS WHICH IS THE THRESHOLD LIMIT FROM FILING THE APPEAL . 4. THEREFORE, IN THE LIGHT OF THE CBDT CIRCULAR NO. 21 /2015 DATED 10.12.2015, WE DISMISS THE APPEAL OF THE REVENUE, S INCE THE TAX EFFECT IS FOUND TO BE LESS THAN RS. 10 LAKHS. APPEAL FILED BY THE REVENUE IS DISMISSED. IT(SS)A NO. 257/AHD/2012 FOR A.Y. 2 009-10 5. THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF THE LD. CIT(A)-II, AHMEDABAD DATED 30.03.2012 PERTAINING TO A.Y. 2009-10. 6. THE SOLE GRIEVANCE OF THE REVENUE RELATES TO THE DE LETION OF THE DISALLOWANCE OF DEPRECIATION OF RS. 3,14,19,435/- M ADE BY THE A.O. 7. WHILE SCRUTINIZING THE RETURN OF INCOME AND GOING T HROUGH THE CLAIM OF DEPRECIATION UNIT-WISE, THE A.O FOUND THAT PLANT AN D MACHINERY WORTH RS. 17,32,59,949/- HAS NOT ONLY BEEN PURCHASED BUT CLAIMED TO BE INSTALLED BEFORE 2 ND OCTOBER, 2008. THE ASSESSEE HAS ALSO CLAIMED TRIAL PRODUCTION ON 25.08.2008 TO JUSTIFY THE CLAIM OF 10 0% DEPRECIATION ON THE SAME. 8. THE A.O ASKED THE ASSESSEE TO JUSTIFY ITS CLAIM OF DEPRECIATION FOR THE FULL YEAR. ASSESSEE FILED A DETAILED REPLY SUPPORTE D WITH NECESSARY IT(SS)A NOS. 241 & 257/AHD/2012 . A.YS.2007-08 & 2009-10 3 DOCUMENTARY EVIDENCE. AFTER CAREFULLY PERUSING THE SUBMISSIONS IN THE LIGHT OF THE DOCUMENTARY EVIDENCES, THE A.O DENIED FULL YEARS DEPRECIATION AND DISALLOWED RS. 3,14,19,435/-. 9. AGGRIEVED BY THIS, THE ASSESSEE CARRIED TH E MATTER BEFORE THE LD. CIT(A) AND REITERATED ITS CLAIM OF DEPRECIATION FOR THE FULL YEAR. 10. AFTER EXAMINING THE CONTENTIONS/CLAIMS OF THE ASSES SEE IN THE LIGHT OF THE DOCUMENTARY EVIDENCES, THE LD. CIT(A) WAS CONVINCED WITH THE CLAIM AND DIRECTED THE A.O TO DELETE THE IMPUGN ED DISALLOWANCE OF DEPRECIATION. 11. AGGRIEVED BY THIS, THE REVENUE IS BEFORE US. 12. SUPPORTING THE ORDER OF THE ASSESSMENT, THE D.R. FI LED A BRIEF NOTE STATING THAT THE POINTS ON WHICH THE DEPRECIAT ION HAS BEEN DISALLOWED BY THE A.O. AND THE SAME READ AS UNDER:- 1. MONTHLY PRODUCTION FIGURE NOT SUBMITTED TO VERITY WHETHER PRODUCTION STARTED BEFORE 02.10.2008. 2. PRODUCTION MANAGER STATED U/S. 132(4) (DATED 24.09 .2008) THAT ONLY TRIAL RUN WAS MADE WHICH FAILED (PARA 4.4.3 OF ASSESSMENT ORDER - PAGE 9 & 10). 3. EVEN C.A. CERTIFICATE STATED THAT AT LEAST 4 MACHI NERIES WERE AWAITING FOR TRIAL RUN AND WAS EXPECTED BY 15.10.2008 (PAGE 10 O F A.O.). FOR REMAINING 6 MACHINERIES HE CERTIFIED ON THE BASIS O F INFORMATION PROVIDED AND NOT BY PHYSICAL INSPECTION. 4. ER-7 FORM (GIVING LIST OF MACHINERIES INSTALLED) W AS FILED ON 30.04.2009 AND NOT BEFORE 02.10.2008, WHICH ACCORDING TO A.O. IS SELF SERVING STATEMENT. IT(SS)A NOS. 241 & 257/AHD/2012 . A.YS.2007-08 & 2009-10 4 5. 3 INSTALLATION CERTIFICATES FOR CERTAIN MACHINERIE S WERE GIVEN BY EXCISE AUTHORITIES ON 03.02.2009 AFTER ASSESSEE'S APPLICAT ION DATED 03.12.2008. 6. PERMANENT ELECTRICITY CONNECTION WAS GIVEN IN NOVE MBER, 2008. ACCORDING TO A.O. DIESEL GENERATION SET WAS INSTALLED BY 31.0 3.2009. EVEN, IF PRESUMED THAT INSTALLED PRIOR THERE TO, COMMERCIAL PRODUCTION IS NOT POSSIBLE BY D.G. SET. (REASONS: PARA 4.4.10) 7. PRINTING CYLINDERS TO BE FITTED IN MACHINERIES ENTE RED INTO FACTORY ON 29.09.2008. 13. PER CONTRA, THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE FINDINGS OF THE LD. CIT(A). 14. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. WE HAVE ALSO GONE THROUGH THE FI NDINGS OF THE FIRST APPELLATE AUTHORITY IN THE LIGHT OF THE DOCUMENTARY EVIDENCES. 15. FINDINGS OF THE FIRST APPELLATE AUTHORITY STARTS FR OM PARA 5 ON PAGE 12 OF HIS ORDER. A PERUSAL OF THE SAME SHOWS T HAT THE LD. CIT(A) HAS ANSWERED TO EVERY OBJECTION OF THE A.O, THE FIN DINGS ON EACH OBJECTION OF THE FIRST APPELLATE AUTHORITY ARE SUPP ORTED BY DOCUMENTARY EVIDENCES. 16. IN OUR CONSIDERED OPINION, THE FINDINGS OF THE FIRS T APPELLATE AUTHORITY ARE WELL RESEARCHED AND SUPPORTED BY RELE VANT DOCUMENTARY EVIDENCES WHICH EVEN THE LD. D.R. COULD NOT REBUT W HILE SUPPORTING THE ASSESSMENT ORDER. 17. THEREFORE, IN THE LIGHT OF THE TOTALITY OF THE FACT S, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD . CIT(A). APPEAL FILED BY THE REVENUE IS DISMISSED. IT(SS)A NOS. 241 & 257/AHD/2012 . A.YS.2007-08 & 2009-10 5 18. IN THE RESULT, BOTH THESE APPEALS OF REVENUE ARE DI SMISSED. ORDER PRONOUNCED IN OPEN COURT ON 29 - 02 - 2016. SD/- SD/- (S. S. GODARA) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHM EDABAD