Kalyani Carpenter Special Sttels Ltd, Pune V. Addl CIT, Pune

MA 124/PUN/2013

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 1507 (ITAT-PUNE)
• Duration Of Justice: 7 month(s) 2 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 08-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 15-11-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 05-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Assessee Lawyers: SUNIL PATHAK
• Keywords: Depreciation; Additional depreciation; Capital expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER MA NO. 124/PN/2013 ARISING OUT OF ITA NO.1131/PN/2010) (ASST.YEAR: 2006-07) KALYANI CARPENTER SPECIAL STEELS LTD., 72-76, MUNDHWA, PUNE .. APPLICANT PAN NO. AABCK1779L VS. ADDL.CIT, RANGE-11, PUNE .. RESPONDENT APPLICANT BY : SHRI SUNIL PATHAK RESPONDENT BY : SHRI S.P. WALIMBE DATE OF HEARING : 13-12-2013 DATE OF PRONOUNCEMENT : 08-01-2014 ORDER PER R.K.PANDA, AM : THE ASSESSEE THROUGH THIS MISCELLANEOUS APPLICATION REQUESTS THE TRIBUNAL TO RECTIFY CERTAIN ERRORS WHICH HAS CR EPT IN THE ORDER OF THE TRIBUNAL 2. THE LD. COUNSEL FOR THE ASSESSEE REFERRING TO TH E MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE DREW THE ATTENTIO N OF THE BENCH TO THE CONTENTS OF THE MISCELLANEOUS APPLICATION WHICH READ AS UNDER : 1. THIS HAS A REFERENCE TO THE ORDER OF THE HON'BLE B BENCH, 1TAT, PUNE DATED 27.08.2012 IN THE CASE OF KALYANI CARPEN TER SPECIALS STEELS LTD. THE ASSESSEE COMPANY HAD FILED AN APPEAL AGAINST T HE ORDER PASSED BY THE LEARNED CIT(A). THE ASSESSEE HAD RAISED SEVER AL GROUNDS OF APPEAL. IN GROUND NO. 3.1 TO 3.3, THE ASSESS EE HAD CHALLENGED THE DISALLOWANCE OF EXPENDITURE OF RS.39,7 6,110/- INCURRED ON REPLACEMENT OF ROLLING MILLS ROLL AS IT WAS TREATED AS CAPITAL EXPENDITURE. IN THIS CONTEXT, THE ASSESSEE HAD ALSO RAISED AN ADDITIONAL GROUND OF APPEAL WHEREIN IT WAS STATED THAT IF THE EX PENDITURE ON ROLLING MILLS ROLL IS TREATED AS CAPITAL EXPENDITURE , ADDITIONAL DEPRECIATION AS PER SECTION 32(1)(IIA) SHOULD BE GRAN TED. 2 2. THE ISSUE AS TO WHETHER EXPENDITURE ON ROLLING MILL S ROLL IS TO BE TREATED AS CAPITAL EXPENDITURE OR REVENUE EXPENDI TURE IS DISCUSSED BY HON'BLE ITAT IN PARA 11 TO 15 OF THE ORDER. HON' BLE ITAT HAS HELD THAT THE EXPENDITURE INCURRED IS A CAPITAL EXPENDITU RE. IN PARA 12 & 13, HON'BLE ITAT HAS REFERRED TO THE ADDITIONAL GROUND O F APPEAL RAISED BY THE ASSESSEE. IN PARA 12, HON'BLE ITAT HAS STATED THAT TH E ASSESSEE HAS RAISED THE ADDITIONAL GROUND OF APPEAL WHEREIN IT HA S BEEN MENTIONED THAT IF THE EXPENDITURE IS HELD TO BE CAPITAL IN NAT URE, THE DEPRECIATION @80% SHOULD BE ALLOWED. HON'BLE ITAT IN PARA 15 ULTI MATELY HOLDS THAT THE EXPENDITURE INCURRED IS CAPITAL IN NATURE A ND HAS DIRECTED THE A.O. TO ALLOW DEPRECIATION @80%. 3. THE ASSESSEE SUBMITS THAT THERE ARE CERTAIN MISTAKES WHI CH HAVE CREPT IN THE ORDER OF HON'BLE ITAT. FIRSTLY, IN PARA 12 OF THE ORDER, HON'BLE ITAT HAS HELD THAT THE ASSESSEE IN THE AD DITIONAL GROUND HAS PRAYED FOR ALLOWANCE OF DEPRECIATION @80% . WITH DUE RESPECT, IT IS SUBMITTED THAT IN THE ADDITIONAL GROUND OF APPEAL, THE ASSESSEE HAD MADE AN ALTERNATE CONTENTION THAT IF THE EXPENDITURE INCURRED ON ROLLING MILLS ROLL IS HELD TO BE CAPITAL EXPENDITURE, ADDITIONAL DEPRECIATION @20% SHOULD BE ALLOWED AS PER SECTION 32(L)(IIA). IT IS TO BE NOTED HERE THAT AS PER APPEN DIX I OF IT RULES, DEPRECIATION ON ROLLING MILLS ROLL IS ALLOWABLE AT 80 % WHICH IS ALREADY ALLOWED BY THE LEARNED ASSESSING OFFICER. IN THE ADDITI ONAL GROUND, THE ASSESSEE HAS REQUESTED FOR ALLOWABILITY OF ADDITIONAL DEP RECIATION WHICH IS GRANTED IN RESPECT OF PLANT AND MACHINERY U/ S.32(L)(IIA) @20% OF COST. HON'BLE ITAT HAS WRONGLY INTERPRETED TH E ADDITIONAL GROUND RAISED BY THE ASSESSEE. IN PARA 15, HON'BLE ITAT HAS HELD THAT DEPRECIATION @80% IS TO BE GRANTED. IT IS SUBMITTED TH AT THE BASIC RATE OF DEPRECIATION ON ROLLING MILLS ROLL IS 80%. THE ALT ERNATE CONTENTION OF ALLOWING THE ADDITIONAL DEPRECIATION HAS NOT BEEN CO NSIDERED BY HON'BLE ITAT AND ACCORDINGLY, THERE IS A MISTAKE IN T HE ORDER OF HON'BLE ITAT. 2.1 THE LD. COUNSEL FOR THE ASSESSEE REFERRING TO T HE ABOVE SUBMITTED THAT THE CONTENTS OF THE MISCELLANEOUS AP PLICATION ARE SELF- EXPLANATORY. HE ACCORDINGLY REQUESTED TO RECALL TH E ORDER OF THE TRIBUNAL OR PASS APPROPRIATE ORDERS. 3. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND HAD NO OBJECTION FOR THE ABOVE. 4. AFTER HEARING BOTH THE SIDES, WE FIND THE ALTERN ATE CONTENTION OF THE ASSESSEE FOR ALLOWING ADDITIONAL DEPRECIATION H AS NOT BEEN CONSIDERED BY THE TRIBUNAL. WE FIND THE ASSESSEE H AS ALREADY BEEN GRANTED 80% OF THE DEPRECIATION AS CLAIMED WHICH IS ALLOWABLE TO 3 ROLLING MILLS AND HIS CLAIM FOR ADDITIONAL DEPRECIA TION @20% REMAINED TO BE ADJUDICATED. WE, THEREFORE, RECALL THE ORDER OF THE TRIBUNAL FOR THE LIMITED PURPOSE OF ADJUDICATION OF THE ADDITIONAL GROUND RELATING TO ADDITIONAL DEPRECIATION. THE AP PEAL IS FIXED FOR HEARING ON 20-02-2014 WHICH WAS ANNOUNCED IN THE OP EN COURT. IT WAS SPECIFICALLY MENTIONED THAT NO SEPARATE NOTICE OF HEARING SHALL BE SENT TO WHICH BOTH THE PARTIES AGREED. 5. IN THE RESULT, THE MISCELLANEOUS APPLICATION FIL ED BY THE ASSESSEE IS ALLOWED PRONOUNCED IN THE OPEN COURT ON 08-01-2014. SD/- SD/- (R.S. PADVEKAR) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER SATISH PUNE DATED : 08 TH JANUARY 2014. COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. CIT(A)-I, PUNE 4. CIT-I, PUNE 5. THE D.R, B PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY ITAT, PUNE BENCHES, PUNE