Babul Products Pvt .Ltd., Ahmedabad V. ACIT(OSD), Range-1, Ahmedabad

MA 149/AHD/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 4611 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 month(s) 8 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 14-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 06-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NK GOEL
• Keywords: Depreciation
• Section: 201; 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE: SHR I AMARJIT SINGH , ACCOUNTANT MEMBER AND MS. MADHUMITA ROY , JUDICIAL MEMBER BABUL PRODUCTS PVT. LTD., URMIN HOUSE, SINDHU BHAVAN ROAD, OFF. S.G. HIGHWAY, BESIDE HOF LIVING, BEFORE MANN PARTY PLOT CROSS ROAD, BODAKDEV, AHMEDABAD PAN: AABCB1866F (APPELLANT) VS THE ACIT (OSD) , RANGE - 1 , AHMEDABAD (RESPONDENT) REVENUE BY : S H RI N.K. GOE L , SR. D . R. ASSESSEE BY: SHRI ASEEM L. THAKKAR , A.R. DATE OF HEARING : 20 - 09 - 2 019 DATE OF PRONOUNCEMENT : 14 - 11 - 2 019 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - BOTH THE MISCELLANEOUS APPLICATIONS ARISE OUT OF THE ORDER OF ITAT VIDE ITA NOS. 560 & 561/AHD/2016 FOR ASSESSMENT YEARS 2011 - 12 TO 2012 - 13 ORDER DATED 17 - 09 - 2018. M.A. NOS. 149 & 150/AHD/2019 (I N I T A NO S . 560 & 561 / A HD/20 16) A SS ESSMENT YEAR 2011 - 12 & 2012 - 13 M .A NO. 149 & 150 /AHD/20 19 A.Y. 2011 - 12 & 2012 - 13 PAGE NO BABUL PRODUCTS PVT. LTD. V S. ACIT(OSD) 2 2. THE ASSESSEE HAS FILED THE INS TANT M.A S . AGAINST THE DECISION OF ITAT IN THE APPELLATE PROCEEDINGS VIDE ITA NOS. 560 & 561/AHD/2016 ON THE ISSUE OF CLAIM OF DEPRECIATION ON FACTORY BUILDING I N THE MISCELLANEOUS APPLICATIONS. T HE ASSESSEE HAS SUBMITTED THAT IN THE PRECEDING ASSESSMENT YEAR , THE CO - ORDINATE BENCH OF THE ITAT HAS DECIDED THE RELEVANT ISSUE IN FAVOUR OF THE ASSESSEE. IT IS ALSO SUBMITTED THAT THE HON BLE JURISDICTIONAL HIGH COURT OF GUJARAT HAS DISMISSED THE APPEAL OF THE REVENUE FOR ASSESSMENT YEAR 2009 - 10 VIDE (2018) 96 TAXMAN.COM 82 (GUJ). IT IS ALSO MENTIONED THAT THESE JUDGMENTS AND DECISION S WERE PLACED IN THE PAPER BOOK AT PAGE NO. 1 TO 5 SUBMITTED DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE ITAT, THEREFORE, THERE IS AN APPARENT MISTAKE FROM RECORD IN DIS ALLOWING THE CLAIM OF DEPRECIATION OF THE ASSESSEE. 3. WE HAVE HEARD RIVAL CONTENTIONS ON THIS ISSUE. WITH THE ASSISTANCE OF LD. REPRESENTATIVES, WE HAVE GONE THROUG H THE MATERIAL ON RECORD AND IT IS NOTICED THAT VIDE ITA NO. 560 & 561/AHD/2016 IN THE CASE OF ASSESSEE ITSELF, THE IDENTICAL ISSUE ON SIMILAR FACTS HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE. THE RELEVANT PART OF DECISION OF ITAT IS REPRODUCED AS UNDER: - 5. WE HAVE DULY CONSIDERED RIVAL CONTENTION S AND GONE THROUGH THE RE CORD CAREFULLY. A PERUSAL OF SECTION 32 WOULD INDICATE THAT FOR GRANT OF DEPRECATIO N THIS SECTION CONTEMPLATES TWO CONDITIONS. THE ASSESSE E SHOULD BE OWNER OF THE ASSESST, AND THE ASSET HAS BEEN USED FOR THE PURPOSE OF BUSINESS . ACCORDINGLY TO THE AO TH E EXPRESSION 'USED' EMPLOYED I N THIS SECTION WOULD CON STRUED AS ACTUAL USER AND IN CASE IN ANY YEAR T HE ASSET IS NOT USED THEN THE ASSESSEE WILL NOT BE ENTITLED FOR THE DEPRECIATION. HOWEVER, IN A LARGE NUMBER OF AUTHORITATIVE PRONOUNCEMENTS IT HAS BEEN OB SERVED THAT EXPRESSION 'USED' EMPLOYED IN SECTION WOULD EMBRACE DEEMED USER OF THE ASSET. THE ASSESSEE HAS NOT CLOSED ITS BUSINESS, RATHER ON ACCOUNT OF STAY OPERATION FROM THE COURT MANUFACTURING ACTIVITIES WERE STOPPED. THE ASSETS WERE READY FOR USE FOR THE PURPOSE OF THE BUSINESS AND THERE WAS CONSTRUCTIVE USER OF THE ASSET. THEREFORE, DEPRECIATION OUGHT TO BE GRANTED TO THE ASSESSEE. WE ALLOW THIS GROUND OF APPEAL AND DELETE THE DISALLOWANCE. M .A NO. 149 & 150 /AHD/20 19 A.Y. 2011 - 12 & 2012 - 13 PAGE NO BABUL PRODUCTS PVT. LTD. V S. ACIT(OSD) 3 IT IS FURTHER NOTICED THAT HON BLE GUJARAT HIGH COURT IN TH E CASE OF THE ASSESSEE ITSELF VIDE PR. CIT VS. BABUL PRODUCTS PVT. LTD. (2018) 96 TAXMAN.COM 82 (GUJ) DATED 17 TH JULY, 2018 HAS DECIDED THE ISSUE IN FAVOR OF THE ASSESSEE . RELEVANT PART OF THE DECISION OF HON BLE HIGH COURT IS AS UNDER. - SECTION 32 OF TH E INCOME - TAX ACT, 1961 - DEPRECIATION - ALLOWANCE/RATE OF (USE OF ASSETS) - ASSESSMENT YEAR 2009 - 10 - ASSESSING OFFICER DISALLOWED DEPRECIATION CLAIMED BY ASSESSEE ON GROUND THAT FACTORY OF ASSESSEE WAS CLOSED AND ASSESSEE WAS NOT USING ASSETS FOR WHICH DEP RECIATION WAS CLAIMED - ON APPEAL, TRIBUNAL ALLOWED CLAIM OF ASSESSEE ON GROUND THAT ASSESSEE WAS IN BUSINESS; HOWEVER, IT COULD NOT RUN FACTORY IN YEAR UNDER CONSIDERATION BECAUSE OF STAY ORDER GRANTED BY COURT - WHETHER ON FACTS, TRIBUNAL HAD RIGHTLY ALL OWED CLAIM OF ASSESSEE FOR DEPRECIATION AND SAME WAS TO BE UPHELD - HELD, YES [PARA 2] [IN FAVOUR OF ASSESSEE] CONSIDERING THE AFORESAID DECISION OF ITAT AND HON BLE GUJARAT HIGH COURT, WE FIND THAT THERE IS AN APPARENT MISTAKE FROM RECORD, THEREFORE, T HE MISCELLANEOUS APPLICA TIONS OF THE ASSESSEE ARE ALLOWED A ND ASSESSING OFFICER IS DIRECTED TO ALLOW REMAINING CLAIM OF DEPRECATION TO THE EXTENT OF RS. 5 , 81 , 448/ - & 5,23,303/ - ON FACTORY BUILDING WHICH WAS INADVERTENTLY DISALLOWED IN THE ORDER OF THE ITAT PASSED VIDE ITA NO. 560 & 561 /AHD/2014 DATED 17 TH SEP, 2018. 4. IN THE RESULT, BOTH THE MISCELLANEOUS APPLICATIONS OF THE ASSESSEE ARE ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 14 - 11 - 201 9 SD/ - SD/ - ( MADHUMITA ROY ) ( AMAR JIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 14 /11 /2019 / COPY OF ORDER FORWARDED TO: - M .A NO. 149 & 150 /AHD/20 19 A.Y. 2011 - 12 & 2012 - 13 PAGE NO BABUL PRODUCTS PVT. LTD. V S. ACIT(OSD) 4 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUA RD FILE. BY ORDER/ , / ,