Ampro Products Ltd, Hyderabad V. JCIT, Spl. Range-I, Hyderabad

MA 229/HYD/2011

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 8657 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 13 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 06-06-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 1994-1995
• Appeal Filed On: 23-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NAGESWARA RAO
• Assessee Lawyers: S RAMA RAO
• Keywords: Depreciation; Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER M.A. NOS. 229 & 230/H/2011 (IN ITA NO 120 & 121/H/2011 (ASSESSMENT YEAR 1994-95 & 1995-96) M/S.AMPRO PRODUCTS LTD , APPLICANT HYDERABAD (PAN AAGCA6662D) VS. JOINT. COMMISSIONER OF INCOME TAX, RESPO NDENT SPECIAL RANGE - 1, HYDERABAD. APPLICANT BY : MR. S. RAMA RAO RESPONDENT BY : MR. NAGESWARA RAO DATE OF HEARING : 04/05/2012 DATE OF PRONOUNCEMENT : 06 /06/2012 ORDER PER ASHA VIJAYARAGHAVAN, J.M.: BY THESE APPLICATION U/S.254(2) OF THE ACT, THE APP LICANT- ASSESSEE PRAYS FOR SPECIFIC DIRECTION IN ORDER OF T RIBUNAL WITH REGARD TO FINANCE CHARGES AND CONSULTANCY CHARGES, DATED 3 0.06.2009 IN SO FAR AS IT RELATES TO ITA NOS 120 AND 121/H/2011 FOR THE ASSESSMENT YEARS 1994-95 AND 1995-96. MA NO. 229/HYD/2011, ARISING OUT OF ITA NO. 120/HY D/2011 2. THE APPLICANT SUBMITTED IN ITS MISC. APPLICATION S THAT THE TRIBUNAL DID NOT SPECIALLY DEALT WITH THE GROUND NO . 3 AND 4 CONCERNING FINANCE CHARGES AND CONSULTANCY CHARGES INCURRED BY THE PETITIONER IN ACQUISITION OF THE SAID PLANT AND MAC HINERY. THE MA NOS. 229 & 230/HYD/2011 AMPRO PRODUCTS LTD. 2 ASSESSING OFFICER WHILE PASSING MODIFICATION ORDER UNDERSTOOD THAT ONLY DEPRECIATION IS ALLOWABLE AND ACCORDINGLY ALLO WED THE SAME. THERE IS NO SPECIFIC DIRECTION WITH REGARD TO MACHI NERY HIRE CHARGES CLAIMED AND HELD AS UNDER:- ALL THESE ISSUES ARE IDENTICAL AS IN ASSESSMENT YE AR 1994-95. IN ITA NO 120 OF 2001,WE HAVE CONCLUDED THESE ISSUES I N THE ASSESEES APPEAL. THEREFORE ON THE SAME LINES AND A LSO APPLYING THE SAME CONCLUSION, WE ALLOW THE APPEAL OF THE ASS ESEES APPEAL. THEREFORE ON THE SAME LINES AND ALSO APPLYI NG THE SAME CONCLUSION, WE ALLOW THE APPEAL OF THE ASSESSEE IN ITA 121 OF 2001 IS ORDERED ACCORDINGLY. 3. AS CAN BE SEEN FROM THE ORDER OF THE ITAT AT PAR A 2, ALL THE MACHINERIES INCLUDING THE MACHINERY TAKEN ON HIRE P URCHASE FROM WIPRO FINANCIAL SERVICES LTD HAS BEEN CONSIDERED. T HE CIT(A) HAD HELD QUESTIONED THE VALUE OF THE MACHINERY. ON APPE AL THE TRIBUNAL HAS CONCLUDED IN PARA 18 THAT ALL THE MACHINERY WER E ACQUIRED FOR THE PURPOSE OF THE BUSINESS AND THE COST OF ACQUISITION AS STATED IS NOT EXCESSIVE. THE ASSESSEE IS ENTITLED TO DEPRECIATION AS CLAIMED. WHEN IN RESPECT OF THE MACHINERY ACQUIRED UNDER HP, THE ITAT HAS DIRECTED GRANT OF DEPRECIATION (ON THE BASIS OF BOARDS DIRE CTIONS), THE NATURAL CONSEQUENCE WILL BE THAT THE HIRE CHARGES PAYABLE F OR HIRE OF THOSE MACHINERIES ARE ALSO ALLOWABLE. IT IS NOT CLEAR AS TO WHY THE AO DID NOT GRANT HIRE CHARGES PAYABLE IN RESPECT OF MACHIN ERIES TAKEN ON HIRE. 4. HOWEVER IN ORDER TO CLARIFY AND PUT THE MATTER B EYOND DOUBT WE WOULD LIKE TO RECTIFY THE PARAGRAPH 18 OF THE ORDER OF THE TRIBUNAL AND ADD SUB-CLAUSE `E TO THE SAME WHICH WILL READ AS UNDER::- E. AS A CONSEQUENCE TO THE ABOVE FINDINGS ABOUT CO ST AND USE OF THE PLANT AND MACHINERY, THE AO SHALL ALLOW THE DEDUCTION OF HIRE CHARGES PAYABLE ON THE MACHINERY TAKEN ON HIRE MA NOS. 229 & 230/HYD/2011 AMPRO PRODUCTS LTD. 3 5. WE FIND THAT THE HONBLE ITAT IN ITA NO. 121/HYD /2011 HAS HELD AS FOLLOWS: ALL THESE ISSUES ARE IDENTICAL AS IN ASSESSMENT YEA R 1994-95. IN ITA NO. 120 OF 2001, WE HAVE CONCLUDED THESE ISSUES IN THE ASSESSEES APPEAL. THEREFORE, ON THE SAME LINES AND ALSO APPLYING THE SAME CONCLUSION, WE ALLOW THE APPEAL O F THE ASSESSEE IN ITA NO. 121 OF 2001. IT IS ORDERED ACCO RDINGLY. 6. SINCE IN M.A. NO. 229, ARISING OUT OF ITA NO. 12 0/HYD/2011, WE HAVE RECTIFIED THE PARAGRAPH 18 OF THE ORDER OF TH E TRIBUNAL BY ADDING SUB-CLAUSE `E (SUPRA), THE SAME IS INSERT ED IN M.A. NO. 230, ARISING OUT OF ITA NO. 121/HYD/2011 ALSO. 7. IN THE RESULT BOTH THE MISC. APPLICATIONS FILED BY THE ASSESSEE ARE ALLOWED. PRONOUNCED IN OPEN COURT ON 06/06/2012. SD/- SD/- (D. KARUNAKRA RAO) (ASHA VIJAYARAGH AVAN) ACCOUNTANT MEMBER JUDICIAL MEMBE R HYDERABAD, DATED: 6 TH JUNE, 2012. KV COPY TO:- 1) AMPRO PRODUCTS LTD., C/O SHRI S. RAMA RAO, ADVOCATE , 3-6-542/4, STREET NO. 7, 103, INDIRADEVI NILAYAM, HIMAYATNAGAR, HYDERABAD 500 029 2) JCIT- SPECIAL RANGE 1, HYDERABAD. 3) THE CIT (A)-V, HYDERABAD 4) THE CIT, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD. S.NO. DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON 18/05/12 SR.P.S./P.S 2. DRAFT PLACED BEFORE AUTHOR 04/06/12 SR.P.S/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM MA NOS. 229 & 230/HYD/2011 AMPRO PRODUCTS LTD. 4 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S./P.S 6. KEPT FOR PRONOUNCEMENT ON SR. P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER