ACIT, Ludhiana V. Sh. Rakesh Gupta, Ludhiana

MA 26/CHANDI/2015

• Counselvise Citation: [2016] 124 COUNSELVISE.COM (IT) 3822 (ITAT-CHANDIGARH)
• Duration Of Justice: 10 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 04-01-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 15-05-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 03-03-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Depreciation; Capital expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. RANO JAIN, ACCOUNTANT MEMBER M.A.NO.26/CHD/2015 IN ITA NO.373/CHD/2014 (ASSESSMENT YEAR: 2009-10) THE D.C.I.T., VS. SH.RAKESH GUPTA, CIRCLE 1, C/O EASTMAN INTERNATIONAL, LUDHIANA. B-XXX-2185/C, LUDHIANA. PAN: ACZPG7190A (APPELLANT) (RESPONDENT) APPLICANT BY : SHRI MANOJ MISHRA, DR RESPONDENT BY : SHRI SUDHIR SEHGAL DATE OF HEARING : 04.12.2015 DATE OF PRONOUNCEMENT : 04.01.2016 O R D E R PER RANO JAIN, A.M . : THIS MISCELLANEOUS APPLICATION IS FILED BY THE REVENUE FOR RECALLING OF THE ORDER OF THE TRIBUNAL DATED 19.7.2014 PASSED IN ITA NO.373/CHD/2014. 2. THE FIRST ISSUE RAISED IN THIS APPLICATION READ S AS UNDER : 2 2.0 ISSUE OF CLAIM OF DEPRECIATION ON WIND FARM PROJECT @ 80%; DURING THE ASSESSMENT PROCEEDINGS, IT WAS NOTICED T HAT THE ASSESSEE HAS INSTALLED AND PUT TO USE A WIND FA RM PROJECT ON WHICH DEPRECIATION @ 80% WAS CLAIMED. TH E ASSESSING OFFICER HELD THAT EXPENDITURE RELATABLE T O POWER EVACUATION INFRASTRUCTURE FACILITIES AMOUNTIN G TO RS.39,00,000/- IS A CAPITAL EXPENDITURE WHICH CANNO T BE TREATED AS PART OF THE BLOCK OF RENEWABLE ENERGY DE VICES BEING WIND MILL ELIGIBLE FOR DEPRECIATION @ 80%. THE REFORE, IT WAS HELD TO BE A CAPITAL EXPENDITURE AND THE VALUE OF BLOCK OF WIND MILL ELIGIBLE FOR DEPRECIATION @ 80% WAS REDUCED ACCORDINGLY. WHILE DOING SO, THE ASSESSING OFFICER FURTHER HELD THE ASSESSEE HAS ONLY MADE A CONTRIBUTION FOR USING THE POWER EVACUATION FACILIT IES WHICH ARE ACTUALLY OWNED BY THE ELECTRICITY BOARD. THE ASSESSEE. THEREFORE, DOES NOT ENJOY OWNERSHIP OF TH E INFRASTRUCTURE EVACUATION NETWORK AND HENCE NO DEPRECIATION WAS ALLOWED. IN APPEAL, THE LD. CIT(A) DELETED THE ADDITION. THE ORDER OF THE CIT(A) WAS NOT ACCEPTABLE AS THE ISSUE WAS DISCU SSED BY THE ASSESSING OFFICER IN DETAIL IN THE ASSESSMENT ORDER AND A FURTHER APPEAL WAS FILED BEFORE THE HON'BLE ITA T WITH THE FOLLOWING GROUNDS OF APPEAL WHICH WAS RAISED INADVERTENTLY :- 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING DEPRECIATIO N @ 80% ON THE CONTRIBUTION MADE BY THE ASSESSEE FOR TH E USE OF POWER EVACUATION INFRASTRUCTURE FACILITIES IN WIND MILLS WHICH IS A POWER TRANSMISSION DEVICE AND NOT A POWER GENERATION DEICE, ELIGIBLE FOR DEPRECIATION AT THE NO RMAL RATE OF DEPRECIATION I.E. @ 15%.' HOWEVER, THE RIGHT GROUNDS OF APPEAL WHICH SHOULD H AVE BEEN RAISED ON THIS ISSUE AT THE TIME OF FILING OF 2 ND APPEAL ARE GIVEN AS BELOW:- 3 (I) 'THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT FOLLOWING THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF TRAVANCORE COCHIN CHEMICAL LTD. VS.CIT 106 ITR 900 AND ALLOWING DEPRECIATION ON CONTRIBUTION FOR POWER EVA CUATION FACILITY EVEN THOUGH THE ASSESSES HAS NO OWNERSHIP OF THE ASSET, BEING ONLY A CONTRIBUTOR FOR AVAILING THE FA CILITY.' (II) 'THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN TREATING THE POWER EVACUATION INFRASTRUCTURE AS PART OF WIND MIL L AND AS RENEWABLE ENERGY DEVICE WHEREAS THE AO HAS BROUGHT ON RECORD SUFFICIENT MATERIAL TO PROVE THAT SAME WAS I N FACT NOT A RENEWABLE ENERGY DEVICE AND HENCE NOT ELIGIBLE FOR DEPRECIATION @ 80%.' EVEN THE HON'BLE ITAT HAS DECIDED THE APPEAL ON THI S ISSUE AGAINST WHICH THE MA IS PROPOSED, FOLLOWING ITS OWN DECISION IN THE CASE OF M/S. EASTMAN IMPEX, LUDHIANA IN ITA NOS. 819 AND 820/CHD/2012. IN THE CASE OF M/S. EASTMAN IMPEX , THE QUESTIONS OF LAW WERE TAKEN RIGHTLY WHICH ARE BEING PROPOSED NOW IN THE MISCELLANEOUS APPLICATION. 3. FROM THE PERUSAL OF THE ABOVE, WE SEE THAT THE I.T.A.T. HAD DECIDED THE ISSUE AS PER GROUNDS RAISE D BY THE DEPARTMENT. NO PARTY HAS A RIGHT TO REVISE OR MODIFY THE GROUNDS OF APPEAL AFTER THE DISPOSAL OF THE APP EAL. THE REQUEST IN THE PRESENT APPLICATION IS TO DECIDE THE ISSUE IN CONSONANCE WITH THE MODIFIED GROUNDS OF AP PEAL. THIS CAN BY NO STRETCH OF IMAGINATION BE CALLED A M ISTAKE APPARENT FROM RECORD. 4. SECOND ISSUE RAISED IN THIS MISCELLANEOUS APPLICATION READS AS UNDER : 4 3.0 ISSUE OF DEPRECIATION ON ELECTRICAL LINES FOR POWER TRANSMISSION AND METERING; DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED THAT THE ASSESSEE FIRM HAD INCURRED AN EXPENDITURE ON ELECTRICAL LINES FOR POWER TRANSMISS ION AND METERING. THE ASSESSEE FIRM HAS ALSO INCLUDED T HIS EXPENDITURE IN THE ACTUAL COST OF THE WIND MILL, EL IGIBLE FOR DEPRECIATION @ 80%. BUT AS CAN BE SEEN FROM THE DISCUSSION IN THE ASSESSMENT ORDER, THE TRANSMISSIO N AND DISTRIBUTION NET WORK WAS ACTUALLY PLANT AND MACHINERY WHICH IS ELIGIBLE ONLY FOR NORMAL RATES O F DEPRECIATION @ 15%. IT IS BY NO STRETCH OF IMAGINATIO N A PART OF THE POWER GENERATION WIND MILL DEVICE. IT'S ONL Y FUNCTION IS THE TRANSMISSION OF THE GENERATED POWER TO THE C OMMON GRID. KEEPING IN VIEW THE AFORESAID FACTS, DEPRECIA TION WAS DISALLOWED AT RS.11,71,581/-. IN APPEAL, THE LD. CIT(A) DELETED THE DISALLOWANCE. THE ORDER OF THE CIT(A) WAS NOT ACCEPTABLE AS THE I SSUE WAS DISCUSSED BY THE ASSESSING OFFICER IN DETAIL IN THE ASSESSMENT ORDER AND A FURTHER APPEAL WAS FILED BEF ORE THE HON'BLE ITAT AND INADVERTENTLY NO GROUND OF APP EAL WAS RAISED ON THIS ISSUE. THEREFORE, THE GROUND OF APPEAL WHICH SHOULD HAVE BEEN RAISED ON THIS ISSUE AT THE TIME OF FILING OF 2 ND APPEAL IS GIVEN AS BELOW: - ' THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF HIGHER DEPRECIATION MADE BY THE AO ALLOWING DEPRECIATION @ 15% INSTEAD OF @ 80% ON ACCOUNT OF EXPENDITURE ON INSTALLATION OF ELECTRICAL LINE FOR POWER TRANSMISSION AND METERING TREATING AS NOT PART OF WIND MILL AND HOLDING THE TRANSMISSION AND DISTRIBUTION NET WORK AS PLANT AND MACHINERY. ' EVEN THE HON'BLE ITAT HAS DECIDED THE APPEAL ON THIS ISSUE AGAINST WHICH THE MA IS PROPOSED, FOLLOWI NG ITS OWN DECISION IN THE CASE OF M/S. EASTMAN IMPEX, LUDHIA NA IN ITA NOS. 819 AND 820/CHD/2012. IN THE CASE OF 5 M/S. EASTMAN IMPEX, THE QUESTIONS OF LAW WAS TAKEN RIGHTLY WHICH IS BEING PROPOSED NOW IN THE MISCELLANE OUS APPLICATION. ON THESE FACTS AND CIRCUMSTANCES OF THE CASE, IT IS RESPECTFULLY PRAYED THAT THIS HON'BLE TRIBUNAL BE P LEASED TO ENTERTAIN THIS APPLICATION AND MODIFY ITS ORDER PASSED IN ITA NO. 373/CHD/2014 DATED 09.07.2014 IN ACCORDANCE WITH LAW. 5. FROM THE PERUSAL OF THE ABOVE ALSO, WE ARE OF T HE VIEW THAT THE REQUEST FOR MODIFYING AN ORDER ON THE BASIS OF MODIFIED GROUNDS RAISED AFTER THE DISPOSAL OF AP PEAL, IS NOT A MISTAKE APPARENT FROM RECORD. 6. IN VIEW OF THE ABOVE, WE ARE NOT INCLINED TO ENTERTAIN THIS REQUEST OF THE REVENUE. 7. IN THE RESULT, THE MISCELLANEOUS APPLICATION F ILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 4 TH DAY OF JANUARY, 2016. SD/- SD/- (BHAVNESH SAINI) (RANO JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 4 TH JANUARY, 2016 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/THE CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH 6