Ashok Leyland Ltd., CHENNAI V. DCIT, CHENNAI

MA 23/CHNY/2017

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 5373 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 24-03-2017
• Appeal Filed By: Assessee
• Bench Allotted: D
• Assessment Year: 2005-2006
• Appeal Filed On: 30-01-2017
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Assessee Lawyers: R VENKATNARAYANAN
• Keywords: Depreciation; Additional depreciation

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI , . ! '# BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G.PAVAN KUMAR, JUDICIAL MEMBER M.P.NOS.23 & 24/MDS./2017 ( I.T.A.NOS.2836 & 2838/MDS./2014; ASSESSMENT YEARS :2005-06 & 2007-08) M/S.ASHOK LEYLAND LTD ., NO.1,SARDAR PATEL ROAD, GUINDY, CHENNAI 600 032. VS. THE DCIT, LARGE TAXPAYER UNIT, CHENNAI-34. [PAN AAACA 4651 L ] ( $% / APPELLANT) ( &'$% /RESPONDENT) / APPELLANT BY : MR.R.VENKAT NARAYANAN, ADVOCATE /RESPONDENT BY : MR.SHIVA SRINIVAS, JCIT, DR / DATE OF HEARING : 24.03.2017 / DATE OF PRONOUNCEMENT : 24 .03.2017 ( / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THESE MISCELLANEOUS PETITIONS ARE FILED BY T HE ASSESSEE SEEKING FOR RECTIFICATION OF THE ORDERS OF THE TRIB UNAL IN ITA NO. 2836 & 2838 /MDS./2014 FOR THE ASSESSMENT YEARS 20 05-06 & 2007-08 RESPECTIVELY DATED 23.09.2016. MP NOS.23 & 24/MDS//2017 :- 2 -: 2. THE LD.A.R SUBMITTED THAT THE ASSESSEE CAME IN APPE AL BEFORE THIS TRIBUNAL IN ITA NO.2836/MDS./2014 FOR A SSESSMENT YEAR 2005-06 AND RAISED THE GROUNDS AS FOLLOWS:- THE SECOND GROUND RAISED BY THE ASSESSEE IS THA T THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN FORMI NG THE DISALLOWANCE BY WRONGLY ASSUMING THAT THE CLAIM IS THE BALANCE OF 50% OF ADDITIONAL DEPRECIATION U/S.32(II A) OF THE ACT IN THE CURRENT YEAR IN RESPECT OF THE ASSETS A CQUIRED IN THE 2 ND HALF OF PRECEDING YEAR OF B47,96,475/-. 2.1 THE TRIBUNAL DISPOSED OF THE ABOVE GROUND IN P ARA 6.1 AS FOLLOWS:- 6.1 AFTER HEARING BOTH THE PARTIES, WE ARE OF THE OPINION THAT SIMILAR ISSUE WAS CONSIDERED BY THE TRIBUNAL I N ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2006-20 07 IN ITA NO.2086/MDS/2010, DATED 16.02.2016 WHEREIN IT W AS HELD AS UNDER:- 6.4 WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD AND JUDICIAL DECISIONS CITE D. PRIME FACIE THE ASSESSEE IS IN THE BUSINESS OF MANUFACTURE OF COMMERCIAL VEHICLES AND ENGINES AND ADDITIONAL DEPRECIATION IS CLAIMED ON LEASED ASSE T OF WINDMILLS. DURING THE PREVIOUS YEAR THE ASSESSEE HAS PURCHASED WINDMILLS LEASED OUT TO OTHERS AND CLAIME D ADDITIONAL DEPRECIATION ON SUCH LEASED ASSETS. ON PERUSAL OF PROVISIONS U/S.32(1)(IIA) OF THE ACT AN D THE DECISIONS RELIED BY THE ASSESSEE WHICH ARE IN LEASI NG BUSINESS AND CANNOT BE BROUGHT INTO CATEGORY OF MANUFACTURE OF COMMERCIAL VEHICLES. THE PROVISIONS ARE VERY CLEAR ON THIS ISSUE. THE CLAIM OF ADDITIONAL DEPRECIATION IS IN VIOLATION OF PROVISIONS U/S.32 O F THE ACT WERE DEPRECATION IS ALLOWED. WE ARE OF THE OPINION THAT MP NOS.23 & 24/MDS//2017 :- 3 -: THE DECISIONS RELIED BY THE ASSESSEE ARE NOT DIRECT LY ON THE ISSUE AND DISTINGUISHABLE AND ADDITIONAL DEPREC ATION ON LEASED ASSET DOES NOT FIT INTO THE PROVISIONS OF THE ACT AND WE UPHOLD THE FINDINGS AND ORDER OF THE ASSESSING OFFICER ON THIS GROUND AND ALLOW THE GROU ND IN FAVOUR OF THE REVENUE. IN VIEW OF THE ABOVE ORDER OF THE TRIBUNAL, THE GRO UND RAISED BY THE ASSESSEE IS DISMISSED. 2.3 ACCORDING TO LD.A.R, THE TRIBUNAL WRONGLY PLAC ED RELIANCE ON THE PARA NO.6.4 ORDER OF TRIBUNAL IN ITA NO.20 86/MDS./2010 INSTEAD OF PARA NO.4.4 WHICH READS AS FOLLOWS: 4.4 WE HEARD THE RIVAL SUBMISSIONS, PERUSED THE M ATERIAL ON RECORD AND JUDICIAL DECISIONS CITED. THE LD. AUTHO RISED REPRESENTATIVE DREW ATTENTION TO THE PROVISIONS U/S .32(1)(IIA) OF THE ACT FOR CLAIM OF ADDITIONAL DEPRECIATION AN D ALSO PROVISIONS OF LAW ON CARRY FORWARD. SINCE THE ASS ET WAS PURCHASED DURING THE SECOND HALF OF FINANCIAL YEAR 2004-05 AND ONLY 50% OF DEPRECIATION WAS ALLOWED AND PLEADE D FOR CARRY FORWARD OF BALANCE 50% TO BE CLAIMED IN THE A SSESSMENT YEAR 2006-07. ON PERUSAL OF THE JUDICIAL DECISIONS AND OBJECTIONS OF FINANCE MINISTER SPEECH ADDITIONAL DEPRECIATION HAS TO BE ALLOWED ONLY IN THE CASE OF NEW PLANT AND MACHINERY AND NOT WDV VALUE ON SUBSEQUENT YEARS. THE ASSESS EE ALSO RELIED ON THE DECISION COSMOS FILMS LTD (SUPRA) WHE RE THE TRIBUNAL HAS ALLOWED THE CLAIM OF ASSESSEE FOR 50% OF ADDITIONAL DEPRECIATION U/S.32(I)(IIA) IN RESPECT O F NEW PLANT & MACHINERY INSTALLED AT THE NEW ELIGIBLE INDUSTRIAL UNDERTAKING WHERE PLANT & MACHINERY WERE PUT TO USE FOR LESS TH AN 180 DAYS IN THE YEAR OF INSTALLATION AND THE ASSESSEE H AD CLAIMED ONLY 50% OF THE ADDITIONAL DEPRECIATION AND THE BAL ANCE AMOUNT WAS CLAIMED IN THE NEXT YEAR. R ESPECTFULLY FOLLOWING THE TRIBUNAL DECISIONS, WE DIRECT THE ASSESSING OFF ICER TO ALLOW ADDITIONAL DEPRECIATION CLAIMED BY THE ASSESSEE. T HIS GROUND OF THE ASSESSEE IS ALLOWED. ACCORDINGLY, THE GROUND OF THE ASSESSEE IS ALLOWED. MP NOS.23 & 24/MDS//2017 :- 4 -: 2.4 ACCORDINGLY, LD.A.R PRAYED THAT IT SHOULD BE CORRECTED. 2.5 THE LD.D.R DID NOT RAISE ANY OBJECTIONS TO THE PLEA OF THE LD.A.R. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. ADMITTEDLY, THE ISSUE RAISED BY THE ASSESSEE IN THE ABOVE APPEAL IN ITA NO.2836/MDS./2014 WAS CO NSIDERED BY THIS TRIBUNAL IN ASSESSEE'S OWN CASE IN ITA NO.2086 /MDS./2010 VIDE ORDER DATED 16.02.2016 IN PARA 4.4 AS ABOVE. 3.1 BEING SO, THE GROUND RAISED BY THE ASSESSEE IN THIS APPEAL IS TO BE ALLOWED IN VIEW OF THE ABOVE ORDER OF TRIBUNAL AND THIS GROUND OF THE ASSESSEE IS ALLOWED INSTEAD OF DISMISSED. 4. SIMILARLY, FOR ASSESSMENT YEAR 2007-08 IN ITA NO.2838/MDS./2014, THE ASSESSEE CAME IN APPEAL BEFO RE THIS TRIBUNAL ON THE FOLLOWING ISSUE:- THE NEXT GROUND RAISED BY THE ASSESSEE IS THAT COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE DISALLOWANCE OF ADDITIONAL DEPRECATI ON ON ASSETS ELIGIBLE FOR 100% DEPRECIATION AND PUT TO US E FOR LESS THAN 180 DAYS. MP NOS.23 & 24/MDS//2017 :- 5 -: 4.1 THIS ISSUE WAS DISPOSED OFF BY THE TRIBUNAL BY OBSERVING IN PARA NO.16.1 AS FOLLOWS:- 16.1 SIMILAR ISSUE CAME FOR CONSIDERATION BEFORE THIS TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2006- 2007 IN ITA NO.2086/MDS/2010 VIDE ORDER DATED 16.02 .2016 WHEREIN HELD AT PARA 4.4 AS UNDER:- 4.4 WE HEARD THE RIVAL SUBMISSIONS, PERUSED THE M ATERIAL ON RECORD AND JUDICIAL DECISIONS CITED. THE LD. AU THORISED REPRESENTATIVE DREW ATTENTION TO THE PROVISIONS U/S.32(1)(IIA) OF THE ACT FOR CLAIM OF ADDITIONAL DEPRECIATION AND ALSO PROVISIONS OF LAW ON CARRY F ORWARD. SINCE THE ASSET WAS PURCHASED DURING THE SECOND HAL F OF FINANCIAL YEAR 2004-05 AND ONLY 50% OF DEPRECIATION WAS ALLOWED AND PLEADED FOR CARRY FORWARD OF BALANCE 50 % TO BE CLAIMED IN THE ASSESSMENT YEAR 2006-07. ON PERU SAL OF THE JUDICIAL DECISIONS AND OBJECTIONS OF FINAN CE MINISTER SPEECH ADDITIONAL DEPRECIATION HAS TO BE ALLOWED ONLY IN THE CASE OF NEW PLANT AND MACHINERY AND NOT WDV VALUE ON SUBSEQUENT YEARS. THE ASSESSEE A LSO RELIED ON THE DECISION COSMOS FILMS LTD (SUPRA) WHE RE THE TRIBUNAL HAS ALLOWED THE CLAIM OF ASSESSEE FOR 50% OF ADDITIONAL DEPRECIATION U/S.32(I)(IIA) IN RESPECT O F NEW PLANT & MACHINERY INSTALLED AT THE NEW ELIGIBLE IND USTRIAL UNDERTAKING WHERE PLANT & MACHINERY WERE PUT TO USE FOR LESS THAN 180 DAYS IN THE YEAR OF INSTALLATION AND THE ASSESSEE HAD CLAIMED ONLY 50% OF THE ADDITIONAL DEPRECIATION AND THE BALANCE AMOUNT WAS CLAIMED IN THE NEXT YEAR. R ESPECTFULLY FOLLOWING THE TRIBUNAL DECISIONS, WE DIRECT THE ASSESSING OFFICER TO ALLOW ADDITIONAL DEPRECIATION CLAIMED BY THE ASSESSEE. THIS GROUND OF THE ASSESSEE IS ALLOWED. ACCORDINGLY, THE GROUND OF THE ASSESSEE IS ALLOWED. 4.2 THE LD.A.R SUBMITTED THAT HEREIN ALSO THE TRI BUNAL, THOUGH FOLLOWED THE EARLIER ORDER OF TRIBUNAL FOR ASSESSMENT YEAR 2006-07 IN ASSESSEE'S OWN CASE IN ITA NO.2086/MDS./2 010 DATED MP NOS.23 & 24/MDS//2017 :- 6 -: 16.02.2016, WRONGLY PLACED RELIANCE ON THE PARA 4. 4 INSTEAD OF PARA 6.4. ACCORDINGLY, HE PRAYED FOR RECTIFICATION OF THE SAME. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. ADMITTEDLY, THE TRIBUNAL WRONG LY PLACED RELIANCE IN PARA NO.4.4 OF THE ORDER OF TRIBUNAL F OR ASSESSMENT YEAR 2006-07 IN ASSESSEE'S OWN CASE IN ITA NO.2086/M DS./2010 VIDE ORDER DATED 16.02.2016 AND IT IS TO BE REPLACE D BY PARA 6.4 AS DISCUSSED EARLIER. ACCORDINGLY, THIS GROUND OF ASSESSEE IS DISMISSED INSTEAD OF ALLOWED. 6. IN THE RESULT, BOTH THE MISCELLANEOUS PETITIONS FILED BY THE ASSESSEE ARE ALLOWED. 7. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLU SION OF HEARING ON 24 TH MARCH,2017 AT CHENNAI. SD/ - SD/ - ( . ) ( G.PAVAN KUMAR ) ! / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER / CHENNAI !' / DATED: 24 TH MARCH, 2017. K S SUNDARAM #!$%%&' (% )( / COPY TO: % 1 . / APPELLANT 3. #%# *%+ , / CIT(A) 5. (-.%&&/0 / DR 2. / RESPONDENT 4. #%# * / CIT 6. .12%3 / GF