M/s. Malani Impex Inc., JODHPUR V. DCIT, BARMER

MA 101/JODH/2013

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 1853 (ITAT-JODHPUR)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 20-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Keywords: Depreciation

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER MA NO.101/JODH/2013 (ARISING OUT OF ITA NO. 422/JU/2009) ASSESSMENT YEAR : 2006-07 M/S. MALANI IMPEX INC., VS. DCIT, BARMER C IRCLE, C/O SHRI U.C. JAIN, ADVOCATE, BARMER. SHATRUNJAY HARI SINGH NAGAR, PALI ROAD, JODHPUR. PAN: AAFFM 6980 L (APPELLANT) (RESPONDENT) C.O. NO. 56/JU/2009 (ARISING OUT OF I.T.A. NO. 422/JU/2009) (A.Y. : 2006-07) M/S. MALANI IMPEX INC., VS. THE DCIT, CIRCLE, MAIN BAZAR, CHOUHTAN, BARMER. DISTRICT BARMER. PAN: AAFFM 6980 L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJENDRA JAIN DEPARTMENT BY : SHRI N.A. JOSHI, D.R. DATE OF HEARING : 29-04-2014 DATE OF PRONOUNCEMENT : 05-05-2014 O R D E R 2 PER N.K. SAINI, A.M. THIS MISCELLANEOUS APPLICATION ARISING OUT OF THE O RDER DATED 26-08-2011 IN ITA NO. 422/JU/2009 FOR THE A.Y. 2006-07 HAS BEEN F ILED BY THE ASSESSEE STATING THEREIN AS UNDER:-. THE HUMBLE PETITION ON BEHALF OF THE ABOVE NAMED A PPELLANT U/S 254(2) OF I.T, ACT 1961 IS ON THE FOLLOWING FACTS & GROUNDS: - 1. THAT AGAINST THE ORDER PASSED BY ID CIT (A) J ODHPUR, DATED 24-04-2009, THE REVENUE FILED AN APPEAL (ITA NO422/JU/2009) AND THE ASSESSEE FIRM FILED CROSS OBJECTION (CO NO 56/JU/09). THE APPEAL OF THE DEPARTMENT AND CROSS- OBJECTION OF THE ASSESSEE FIRM WERE DISPOSED OF BY THE HON'BLE TRIBUNAL ON 26-08-2011 BY THE COMMON ORDER FOR THE A.Y, 2005-06 & 2006-07. 2. IN THE DEPARTMENT GROUND OF APPEAL NO (III), T HE DEPARTMENT HAS OBJECTED IN ALLOWING THE DEPRECIATION ON TDP TRANSFORMER RS 2,60,000/- @ 80% IGNORING THE FACTS THAT THE TDP TRANSFORMER IS BASI CALLY A PLANT & MACHINERY AND DOES NOT LOOSE CHARACTER OF PLANT & MACHINERY B Y ITS INSTALLATION WITH WIND MILLS. 3. IN CROSS-OBJECTION FILED BY THE ASSESSEE, THE ASSESSEE HAS OBJECTED IN CONFIRMING DISALLOWANCES IN RESPECT OF CLAIM OF DEP RECATION OF RS 9,10,,000/- OUT OF TOTAL DEPRECIATION ON WIND MILLS. 4. ON THE SUCH GROUNDS OF APPEAL RAISED BY THE RE VENUE & THE APPELLANT FIRM, THE HON'BLE BENCH HAS GIVEN HIS FINDING AT PA RA 14 TO 16 PAGE 6 TO 9 READS AS UNDER:- 14. THE NEXT ISSUE FOR CONSIDERATION IN ASSESSMENT YEAR 2006-07 RELATES TO ALLOWING THE DEPRECIATION ON TDP TRANSFORMER AT THE RATE OF 80 PER CENT. THE ASSESSEE IN CROSS OBJECTION HAS CHALLENGE D THE CONFIRMING THE DEPRECIATION OF RS.9,10,000/- OUT OF TOTAL DEPRECIA TION OF RS. 1,52,00,OOO/- CLAIMED BY THE ASSESSEE ON CAPITA L EXPENDITURE OF RS.3,85,00,000/- INCURRED ON WIND-MILL ............ ...... 3 15......... 16. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE HAD CLAIMED DEDUC TION ON ACCOUNT OF DEPRECIATION ALLOWANCE IN RESPECT OF CONTROL ROOM, INTERNAL ROADS AND SITE DEVELOPMENT AND TDP TRANSFORMER. THE ID. CIT ( A) HAS ALLOWED DEPRECIATION ON TDP TRANSFORMER. HOWEVER, HE HAS RE JECTED THE CLAIM OF THE ASSESSEE IN RESPECT OF CONTROL ROOM, SITE DEVEL OPMENT AND INTERNAL ROADS. THE REVENUE IS AGGRIEVED AGAINST ALLOWING DE PRECIATION ALLOWANCE ON TDP TRANSFORMER WHEREAS THE ASSESSEE I S AGGRIEVED AGAINST DISALLOWANCE OF DEPRECIATION IN RESPECT OF CONTROL ROOM, SITE DEVELOPMENT AND INTERNAL ROADS. CLAUSE (XIII) OF PL ANT AND MACHINERY IN APPINDIX-1 DEALS WITH DEPRECIATION ALLOWANCE IN RES PECT OF RENEWABLE ENERGY DEVICES. SUB CLAUSE (1) DEALS WITH WIND-MILL S AND ANY SPECIALLY DESIGNED DEVICES WHICH RUN ON WIND-MILLS. THE DEPRE CIATION ALLOWABLE IN RESPECT OF THE ITEMS IN CLAUSE (XIII) IS 80 PER CEN T. INTERNAL ROADS, THE SITE DEVELOPMENT AND CONTROL ROOM CANNOT BE CONSIDERED A S PART OF WIND- MILLS BECAUSE THEY ARE NOT SPECIALLY DESIGNED DEVIC ES WHICH RUN ON WIND-MILL. CONTROL ROOM IS NOTHING, BUT A BUILDING. THE USE OF CONTROL ROOM IS NOT DEPENDENT ON WIND-MILL. SO IS THE CASE WITH ROADS AND EXPENDITURE INCURRED ON SITE DEVELOPMENT. CLAUSE (X III) DEALS WITH RENEWABLE ENERGY DEVICES. THEREFORE, DEPRECIATION O N INTERNAL ROADS, SITE DEVELOPMENT AND CONTROL ROOM CANNOT BE ALLOWED AS A PART OF WIND-MILL. AS REGARDS TDP TRANSFORMER, IT IS A DEVI CE WHICH CONTROLS THE VOLTAGE OF ELECTRICAL ENERGY. THEREFORE, TRANSFORME R WHICH IS CONNECTED WITH THE WIND-MILL HAS TO BE TAKEN AS PART OF WIND- MILL AND HIGHER RATE OF DEPRECIATION WILL BE ALLOWABLE. ITAT, IN THE CAS E OF POONAWALA FINVEST & AGRO MILLS (SUPRA) HAS HELD THAT EARTH WORK, FOUN DATION AND APPROACH ROADS WERE NOT SUCH THAT IT COULD BE SAID THAT THEY WERE DESIGNED SO AS TO PERFORM THE FUNCTION OF FACILITATING THE GENERAT ING THE POWER BY WIND-MILL OR DISTRIBUTION OF POWER GENERATED BY WIN D-MILL. IT IS NOT THE CASE OF THE ASSESSEE THAT BUILDING, INTERNAL ROAD AND SITE DEVELOPMENT WAS DONE OR WERE SPECIALLY DESIGNED TO MEET THE SPE CIAL REQUIREMENTS OF THE WIND MILL. THEREFORE, THE BUILDING AND INTER NAL ROADS AND SITE DEVELOPMENT CANNOT BE TREATED AS PART OF WIND-MILL. WE, THEREFORE, UPHOLD THE ORDER OF THE ID. CIT (A) ALLOWING DEPREC IATION ONLY ON TDP TRANSFORMER. 4 5. WHILE GOING THROUGH THE ORDER OF HON'BLE TRIBU NAL AND IT IS FOUND THAT THE HON'BLE TRIBUNAL NOWHERE CONSIDERED THE DECISION OF HON'BLE ITAT JODHPUR BENCH IN THE CASE OF DY. CIT, JODHPUR V DELHI RAJAS THAN TRANSPORT CO., ITA NO. 195/JU/2010 DATED 11/02/2011. [HON'BLE ITAT JODHPUR BENCH( COPY OF JUDGMENT WAS PLACED ON RECORD AT P.B. PAGE 108 TO 1 18). 6. THAT IN THE WRITTEN SUBMISSION (P.B. PAGE 106 TO 107) THE APPELLANT FIRM HAD SUBMITTED BEFORE HON'BLE BENCH WHICH IS REPRODU CED AS UNDER:- G.A. NO. III OF THE REVENUE APPEAL AND GROUND OF AP PEAL NO. 4 IN THE CROSS OBJECTION RELATING TO ADDITION / DELETION OF DISALL OWANCES IN RESPECT OF CLAIM OF DEPRECATION ON WIND MILLS AO ORDER PARA 2 PAGE 11 TO 31 CIT (A) ORDER PAGE 6 TO 8 SUBMISSION BEFORE HON'BLE ITAT P.B. PAGE 90 TO 96 RELEVANT DECISION OF HON'BLE ITAT, JAIPUR BENCH P.B. 101 TO 105 RELEVANT DECISION OF HON'BLE ITAT, JODHPUR BENCH P.B. DY. CIT. LODHPUR V DELHI RAJASTHAN TRANSPORT CO.. I TA NO. 195/JU/2010 DATED LL/02/2011.[HON'BLE ITAT LODHPUR BENCH] P.B.P AGE ''WE, THEREFORE, TAKING INTO CONSIDERATION AND THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO FOLLOWING THE ABOVE CASE LAWS WE CAME TO CONCLUSION THAT THE FOUNDATION OF THE WIND MILL IS AMOUNTING TO PAR T AND PARCEL OF THE WIND MILL AND IT IS A PLANT AND MACHINERY AND ACCORDINGL Y THE ASSESSEE IS ELIGIBLE FOR HIGHER RATE OF DEPRECIATION WHICH WAS CLAIMED. AS F AR AS CIVIL WORK IS CONCERNED, WE FIND THAT IT IS NOT AN INTEGRAL PART OF THE WIND MILL AND HE IS NOT ELIGIBLE FOR HIGHER DEPRECIATION. IN VIEW OF THE ABOVE OBSERVATIONS, WE SET ASIDE THE ORDER PASSED BY THE ID. CIT(A) AND REMIT THE ISSUE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER AND DIRECT THE AO TO ALLOW THE HIGHER DEPRECIATION CLAI M OF THE ASSESSEE IN RESPECT OF FOUNDATION OF THE WIND MILL IN SO FAR AS OTHER ALLIED WORKS ARE CONCERNED NORMAL RATE HAS TO BE APPLIED AND THIS GR OUND OF APPEAL RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE.' 5 7. IN LIGHT OF ABOVE A MISTAKE HAS BEEN CREPT IN THE ORDER OF THE TRIBUNAL BY NOT TAKING INTO CONSIDERATION THE DECISION OF HON'B LE ITAT ]ODHPUR BENCH RELIED BY APPELLANT FIRM BEFORE THE TRIBUNAL THROUG H HIS SUBMISSIONS. 8. THAT THE DECISION OF THE CO-ORDINATE BENCH IN EARLIER BENCH IS BINDING IN THE LATER CASES. RELIANCE IS PLACED ON: A. G.D. GOPAL VS. CIT REPORTED IN 258 ITR 584 (MA D). B. CIT VS. TRAVANCORE TITANIUM PRODUCTS LTD. 265 ITR 526 (KAR) C. DLF UNIVERSAL LTD. VS. CIT 306 ITR 271 (DEL) 9. THAT IF THE DECISION REFERRED BY THE ASSESSEE NOT CONSIDERED BY THE HON'BLE BENCH WHILE DECIDING THE APPEAL THE SAME HAS TO BE CONSIDERED AS MISTAKE APPARENT ON THE FACE OF RECORD AND REQUIRES RECTIFI CATION AS HELD IN THE FOLLOWING DECISIONS: A. THE HON'BLE SUPREME COURT IN THE CASE OF HONDA SIEL POWER PRODUCTS LTD. VS. CIT 295 ITR 466 (SC) HAS HELD THAT: 'WHEN PREJUDICE RESULT FROM AN ORDER ATTRIBUTABLE T O THE TRIBUNAL'S MISTAKE, ERROR OR OMISSION, THEN IT IS THE DUTY OF THE TRIBUNAL TO SET IT RIGHT. ATONEMENT TO THE WRONG PARTY,BY THE COURT OR TRIBUN AL FOR THE WRONG COMMITTED BY IT HAS NOTHING TO DO WITH THE CONCEPT OF INHERENT POWER REVIEW. IN THE PRESENT CASE, THE TRIBUNAL WAS JUSTI FIED IN EXERCISING ITS POWER UNDER S. 254(2) WHEN IT WAS POINTED OUT TO TH E TRIBUNAL THAT THE DECISION OF THE CO-ORDINATE BENCH WAS PLACED BEFORE THE TRIBUNAL WHEN THE ORIGINAL ORDER CAME TO BE PASSED BUT IT HAD COM MITTED A MISTAKE IN NOT CONSIDERING THE MATERIAL WHICH WAS ALREADY ON R ECORD. THE TRIBUNAL HAS ACKNOWLEDGED ITS MISTAKE; IT HAS ACCORDINGLY RE CTIFIED ITS ORDER. IN THAT CASE, A DECISION BY A COORDINATE BENCH WAS THOUGH C ITED YET HOWEVER, WAS NOT CONSIDERED BY THE TRIBUNAL AND THE MISCELLANEOU S APPLICATION FILED BY THE ASSESSEE, WAS ACCEPTED. UNDER THIS BACKGROUND, THE RECTIFICATION DONE BY THE TRIBUNAL WAS CONFIRMED.' B. PERFETTI VAN MELLE INDIA (P) LTD. VS. CIT 334 ITR 2 59 (SC) IN LIGHT OF ABOVE THE DECISION RENDERED IN ITA NO. 422/JU/09 AND CO NO. 56/JU/09 CONTAINS MISTAKES WHICH IS APPARENTLY ON I TS FACE AND REQUIRES TO BE RECTIFIED BY PASSING A APPROPRIATE ORDER U/S 254(2) . YOURS FAITHFULLY SD/- XXXXXXX 6 2. DURING THE COURSE OF HEARING, LD. COUNSEL FOR TH E ASSESSEE REITERATED THE CONTENTS OF THE AFORESAID MISC. APPLICATION AND SUB MITTED THAT SINCE MISTAKE IS APPARENT FROM THE RECORD, THE ORDER DATED 26/08/201 1 MAY BE RECALLED AND RECTIFIED. 3. IN HIS RIVAL SUBMISSIONS, LD. D.R. OPPOSED THE R ECALLING OF THE ORDER AND STATED THAT THIS ISSUE WAS DECIDED ON MERIT VIDE OR DER DATED 26/08/2011, SO THERE IS NO MISTAKE APPARENT FROM THE RECORD. 4. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IT IS NOTICED TH AT WHILE DECIDING THE ISSUE RELATING TO THE DEPRECIATION ON WIND MILL, ITAT IN ITS ORDER DATED 26/08/2011 IN PARA 16 HAS FOLLOWED THE DECISION OF THE ITAT PUNE BENCH IN THE CASE OF POONAWALA FINVEST & AGRO MILLS REPORTED AT 118 TTJ 68 INSTEAD OF THE DECISION OF THIS BENCH OF THE TRIBUNAL IN THE CASE OF DCIT, JODHPUR VS. DELHI RAJASTHAN TRANSPORT CO. IN I.T.A.NO. 195/JU/2010 ORDER DATED 11/02/2011 WH ICH WAS CITED BY THE ASSESSEE. THEREFORE, BY NOT FOLLOWING THE O RDER OF THE SAME BENCH, A MISTAKE HAS OCCURRED, WHICH DESERVES TO BE RECTIFIE D. WE, THEREFORE, ARE OF THE VIEW THAT THE MISTAKE POINTED OUT BY THE ASSESSEE I S APPARENT FROM THE RECORD. ACCORDINGLY, THE ORDER DATED 26/08/2011 IN C.O. NO. 56/JU/2009 IS RECALLED FOR THE LIMITED PURPOSE OF DECIDING THE ISSUE RELATING TO THE DEPRECIATION ON WIND MILL. 7 5. SINCE BOTH THE PARTIES WERE READY TO ARGUE THE M ATTER ON MERIT, THEREFORE, CO NO. 56/JU/2009 FILED BY THE ASSESSEE FOR THE A.Y . 2006-07 ON THE LIMITED ISSUE OF DEPRECIATION ON WIND MILL WAS HEARD ALONG WITH T HE MISC. APPLICATION. 6. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE WAS ELIGIBLE FOR DEPRECIATION ON TDP TRANSFORMER @ 80% ON THE WI ND MILL INCLUDING EARTH WORK, FOUNDATION AND ERECTION OF INTERNAL/EXTERNAL LINES ETC. AS HAS BEEN HELD BY THIS BENCH OF THE TRIBUNAL IN THE CASE OF DCIT, JOD HPUR VS. DELHI RAJASTHAN TRANSPORT CO. IN I.T.A.NO. 195/JU/2010 ORDER DATED 11/02/2011, COPY OF WHICH IS PLACED AT PAGE NOS. 108-118 OF THE ASSESSEES PAPER BOOK. 7. IN HIS RIVAL SUBMISSIONS, LEARNED D.R. SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 8. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IT IS NOT ICED THAT DUE TO OVERSIGHT AND INADVERTENTLY, THE ITAT IN ITS ORDER DATED 26/08/20 11 WHILE DECIDING THE ISSUE RELATING TO DEPRECIATION ON WIND MILL, HAD NOT CONS IDERED THE DECISION OF THIS BENCH OF THE TRIBUNAL IN THE CASE OF DCIT, JODHPUR VS. DELHI RAJASTHAN TRANSPORT CO. (SUPRA), WHEREIN VIDE PARA 13, IT HAS BEEN HELD AS UNDER:- WE, THEREFORE, TAKING INTO CONSIDERATION THE FACT S AND CIRCUMSTANCES OF THE CASE AND ALSO FOLLOWING THE ABOVE CASE LAWS WE COME TO CONCLUSION THAT THE FOUNDATION OF THE WIND MILL IS AMOUNTING TO PART 8 AND PARCEL OF THE WIND MILL AND IT IS A PLANT AND M ACHINERY AND ACCORDINGLY THE ASSESSEE IS ELIGIBLE FOR HIGHER RAT E OF DEPRECIATION WHICH WAS CLAIMED. AS FAR AS CIVIL WORK IS CONCERN ED, WE FIND THAT IT IS NOT AN INTEGRAL PART OF THE WIND MILL AND HE IS NOT ELIGIBLE FOR HIGHER DEPRECIATION. 9. IN VIEW OF THE ABOVE, WE MODIFY THE AFORESAID EA RLIER ORDER DATED 26/08/2011 OF THE ITAT AND DIRECT THE ASSESSING OFF ICER TO ALLOW THE CLAIM OF THE ASSESSEE ON ACCOUNT OF HIGHER DEPRECIATION AS DIREC TED IN THE AFORESAID REFERRED TO ORDER DATED 11/02/2011 IN THE CASE OF DCIT, JODH PUR VS. DELHI RAJASTHAN TRANSPORT CO. (SUPRA) IN I.T.A.NO. 195/JU/2010 AND C.O. 09/JU/2010 FOR THE A.Y. 2007-08. 10. IN THE RESULT, THE MISC. APPLICATION FILED BY T HE ASSESSEE IS ALLOWED AND BOTH THE APPEALS FILED BY THE REVENUE AND THE CROSS OBJE CTION FILED BY THE ASSESSEE ARE PARTLY ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON THIS 05-0 5-2014.) SD/- SD/- (HARI OM MARATHA) (N.K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 05 TH MAY, 2014 VR/- COPY TO:- 1.THE APPELLANT 2. THE RESPONDENT 3. THE LD. CIT 4. THE LD. CIT(A) 9 5. THE DR 6. THE GUARD FILE ASSISTANT REGISTRAR ITAT, JODHPUR.