DCIT, Coimbatore V. Lakshmi Technology and Engineering Industries Ltd., Coimbatore

MA 357/CHNY/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7857 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 2 month(s) 2 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 02-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2005-2006
• Appeal Filed On: 31-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARI GOVIND
• Keywords: Depreciation; Additional depreciation

Judgement Text

, ' , IN THE INCOME-TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . , . , BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY, JUDICIAL MEMBER M.P. NO. 357/CHNY/2016 [IN I.T.A.NO.492/CHNY/2015] / ASSESSMENT YEAR :2005-06 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 1, COIMBATORE. VS. M/S. LAKSHMI TECHNOLOGY AND ENGINEERING INDUSTRIES LTD., 34-A, KAMARAJ ROAD, COIMBATORE 641 018. [PAN: AAACL5245P] ( /APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI HARI GOVIND, JCIT / RESPONDENT BY : NONE / DATE OF HEARING : 07.12.2018 /DATE OF PRONOUNCEMENT : 02.01.2019 / O R D E R PER DUVVURU RL REDDY, JUDICIAL MEMBER: BY MEANS OF PRESENT MISCELLANEOUS PETITION, THE REVENUE SEEKS TO RECALL THE ORDER PASSED BY THE TRIBUNAL IN I.T.A. NO. 492/CHNY/2015 DATED 26.04.2016 FOR THE ASSESSMENT YEAR 2005-06. BY REFERRING TO THE PETITION, THE LD. DR HAS SUBMITTED THAT VIDE ORDER DATED 26.04.2016, THE TRIBUNAL HAS ALLOWED THE APPEAL FILED BY THE ASSESSEE WITH REGARD TO THE ENTITLEMENT TO CARRY FORWARD 50% OF THE ADDITIONAL DEPRECIATION IN THE SUCCEEDING YEAR WHEN THE PLANT AND MACHINERY WAS PUT TO USE LESS THAN 180 DAYS IN THE M.P. NO.357/CHNY/16 2 PRECEDING PREVIOUS YEAR. IT WAS FURTHER SUBMITTED THAT IN THE CASE OF DCIT V. SREE JAYAJOTHI CEMENTS LTD. IN I.T.A. NO. 1932/MDS/2015 RELEVANT TO THE ASSESSMENT YEAR 2011-12 DATED 06.04.2016, THE COORDINATE BENCHES OF THE TRIBUNAL HAS RULED IN FAVOUR OF THE REVENUE BY HOLDING THAT SUCH CLAIM FOR CARRY FORWARD OF ADDITIONAL DEPRECIATION IS NOT ALLOWABLE SINCE THE ASSET PURCHASE IN THE EARLIER FINANCIAL YEAR HAS ALREADY BEEN CAPITALIZED AND THEREFORE, THE ASSESSEE IS NOT ENTITLED FOR CARRY FORWARD OF ADDITIONAL DEPRECIATION. IN VIEW OF CONSISTENCY, THE LD. DR SUBMITTED THAT THERE IS A MISTAKE APPARENT IN THE ORDER PASSED BY THE TRIBUNAL DATED 26.04.2016 AND PRAYED THAT THE ABOVE ORDER OF THE TRIBUNAL MAY BE RECALLED AND ADJUDICATED ON MERITS. 2. DESPITE SERVICE OF NOTICE [AD ON RECORD], NONE APPEARED ON BEHALF OF THE ASSESSEE. HENCE WE PROCEED TO DECIDE THE PETITION AFTER HEARING THE LD. DR. 3. WE HAVE HEARD THE LD. DR AND PERUSED THE ORDERS OF THE TRIBUNAL. THE ALLOWABILITY OF CARRY FORWARD OF 50% OF THE ADDITIONAL DEPRECIATION IN THE SUCCEEDING YEAR WHEN THE PLANT AND MACHINERY WAS PUT TO USE LESS THAN 180 DAYS IN THE PRECEDING PREVIOUS YEAR, IN THE CASE OF DCIT V. SREE JAYAJOTHI CEMENTS LTD. (SUPRA), THE COORDINATE BENCHES OF THE TRIBUNAL DECIDED THE ISSUE IN FAVOUR OF THE REVENUE BY HOLDING THAT SUCH CLAIM FOR CARRY FORWARD OF ADDITIONAL DEPRECIATION IS NOT ALLOWABLE SINCE THE ASSET M.P. NO.357/CHNY/16 3 PURCHASE IN THE EARLIER FINANCIAL YEAR HAS ALREADY BEEN CAPITALIZED AND THEREFORE, THE ASSESSEE IS NOT ENTITLED FOR CARRY FORWARD OF ADDITIONAL DEPRECIATION. HOWEVER, THE SAID CASE LAW WAS NOT BROUGHT ON RECORD BY THE DEPARTMENT. IT IS COMMON PRACTICE TO CAPITALIZE THE PLANT AND MACHINERY FOR CLAIMING 50% OF THE ADDITIONAL DEPRECIATION IN THE RELEVANT ASSESSMENT YEAR WHEN THE PLANT AND MACHINERY WAS INSTALLED AND PUT TO USE. HOWEVER, FOR CLAIMING OF UNAVAILED 50% OF THE ADDITIONAL DEPRECIATION IN THE SUCCEEDING YEAR WHEN THE SAID PLANT AND MACHINERY WAS PUT TO USE LESS THAN 180 DAYS IN THE PRECEDING PREVIOUS YEAR, THE ELIGIBILITY IS REQUIRED TO ANALYSED IN VIEW OF THE FACTS AND VARIOUS LATEST DECISIONS OF DIFFERENT COURTS, WHICH APPEARS TO HAVE NOT BEEN DONE IN THE CASE OF DCIT V. SREE JAYAJOTHI CEMENTS LTD. (SUPRA), WHEREAS, BY RELYING ON OLD DECISIONS, THE ISSUE WAS DECIDED IN FAVOUR OF THE REVENUE. 4. HOWEVER, IN THE PRESENT CASE, DURING THE COURSE OF APPEAL HEARING, BY FILING COPIES OF THE DECISION, THE LD. COUNSEL FOR THE ASSESSEE HAS STRONGLY RELIED ON THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF AUTOMOTIVE COACHES & COMPONENTS LTD. V. DCIT IN I.T.A. NO. 1789/MDS/2014 FOR THE ASSESSMENT YEAR 2008-09 VIDE ORDER DATED 12.02.2016 AND ALSO THE DECISION IN THE CASE OF CIT & ANOTHER V. RITTAL INDIA PVT. LTD. [2016] 380 ITR 423 (KARN.). BY FOLLOWING THE DECISION OF COCHIN BENCHES OF ITAT IN THE CASE OF APOLLO TYRES LTD. V. ACIT [2014] 64 SOT 203 M.P. NO.357/CHNY/16 4 AND THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT & ANOTHER V. RITTAL INDIA PVT. LTD. (SUPRA), THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF AUTOMOTIVE COACHES & COMPONENTS LTD. V. DCIT (SUPRA) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. ON PERUSAL OF THE ORDER OF THE TRIBUNAL DATED 06.04.2016 IN THE CASE OF DCIT V. SREE JAYAJOTHI CEMENTS LTD. (SUPRA), THE LD. COUNSEL FOR THE ASSESSEE APPEARED IN THAT CASE HAS NOT PLACED ON RECORD THE ABOVE CASE LAW AND MOREOVER, THE LD. DR HAS ALSO NOT BROUGHT ON RECORD ON THE DECISION IN THE CASE OF DCIT V. SREE JAYAJOTHI CEMENTS LTD. (SUPRA) DURING THE COURSE OF APPEAL HEARING. FURTHER, BY FOLLOWING THE ABOVE DECISION IN THE CASE OF AUTOMOTIVE COACHES & COMPONENTS LTD. V. DCIT (SUPRA), IN THE CASE OF ASSOCIATED PRINTERS (MADRAS) (P.) LTD. V. DCIT IN I.T.A. NO. 109/MDS/2015 DATED 26.04.2016 FOR THE ASSESSMENT YEAR 2008-09 [IN WHICH THE SAME DR HAS APPEARED, BUT NOT BROUGHT ON RECORD ON THE DECISION IN THE CASE OF DCIT V. SREE JAYAJOTHI CEMENTS LTD. (SUPRA)], THE SAID DIVISION BENCH OF THIS TRIBUNAL (SAME COMBINATION) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE, WHICH WAS DULY ACCEPTED BY THE DEPARTMENT. IN THE PRESENT CASE, THE CASE LAW RELIED ON BY THE DEPARTMENT IN THE CASE OF DCIT V. SREE JAYAJOTHI CEMENTS LTD. (SUPRA) IS NOT REFLECTING CORRECT POSITION OF LAW AND THEREFORE, THIS BENCH NEED NOT BLINDLY FOLLOW A DIFFERENT VIEW, WHICH IS ALSO AGAINST VARIOUS DECISIONS OF THIS DIVISION BENCH AND ALSO IN VIEW OF THE RULINGS OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. HI TECH ARAI LTD. M.P. NO.357/CHNY/16 5 [2010] 321 ITR 477. UNDER THE ABOVE FACTS AND CIRCUMSTANCES, WE FIND NO MISTAKE APPARENT ON RECORD IN THE ORDER OF THE TRIBUNAL DATED 26.04.2016 WARRANTING RECALL OF THE ORDER. THUS, THE PETITION FILED BY THE REVENUE STANDS DISMISSED. 5. IN THE RESULT, THE MP FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 02 ND JANUARY, 2019 AT CHENNAI. SD/ - SD/ - (ABRAHAM P. GEORGE) ACCOUNTANT MEMBER (DUVVURU RL REDDY) JUDICIAL MEMBER CHENNAI, DATED, THE 02.01.2019 VM/- /COPY TO: 1. / APPELLANT, 2. / RESPONDENT, 3. ( ) /CIT(A), 4. /CIT, 5. /DR & 6. /GF.