DCIT, Sangrur V. M/s Ram Kumar Govt. Contractor, Sangrur

MA 54/CHANDI/2015

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 3749 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 26 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 15-12-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 21-08-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 19-02-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: B B BANSAL
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. RANO JAIN, ACCOUNTANT MEMBER MA NO.54/CHD/2015 IN ITA NO. 188/CHD/2014 ( ASSESSMENT YEAR 2010-11) THE DCIT, VS M/S RAM KUMAR, CIRCLE, GOVERNMENT CONTRACTOR, SANGRUR, SANGRUR. PAN: AAEFT7094R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MANJIT SINGH RESPONDENT BY : SHRI B.B. BANSAL DATE OF HEARING : 11.12.2015 DATE OF PRONOUNCEMENT : 15.12.2015 O R D E R PER BHAVNESH SAINI,JM BRIEFLY THE FACTS OF THE CASE ARE THAT THE DEPARTME NTAL APPEAL WAS FILED BEFORE TRIBUNAL IN ITA 188/2014 IN WHICH THE DEPARTMENT HAS RAISED TWO ISSUES I.E. REJECTION OF THE BOOKS OF ACCOUNT AND APPLICATION OF THE NET PROFIT RATE REDUCED BY LD. CIT(APPEALS) AND ALLOWING DEPRECIATI ON SEPARATELY CLAIMED BY THE ASSESSEE. THE TRIBUNAL P ARTLY ALLOWED DEPARTMENTAL APPEAL VIDE ORDER DATED 15.07. 2014. 2. THE TRIBUNAL, WITH REGARD TO APPLICATION OF THE PROFIT RATE CONFIRMED THE ORDER OF THE LD. CIT(APPEALS) IN 2 REJECTING THE BOOKS OF ACCOUNT UNDER SECTION 145(3) OF THE ACT. IT WAS FOUND THAT ASSESSEE HAS CLAIMED NET PR OFIT RATE OF 5.29% WHICH WAS INCREASED TO 12% BY ASSESSI NG OFFICER AND REDUCED TO 6.5% BY LD. CIT(APPEALS). T HE TRIBUNAL APPLIED NET PROFIT RATE OF 7% AND PARTLY A LLOWED APPEAL OF THE REVENUE. 3. THE REVENUE IN THE PRESENT APPLICATION CONTENDED THAT THE ORDER OF THE TRIBUNAL IS SILENT WITH REGAR D TO SECOND ISSUE ALLOWING DEPRECIATION SEPARATELY, EVEN IF PROFIT RATE HAS BEEN APPLIED IN THE MATTER. THE LD . CIT(APPEALS) OBSERVED THAT SALARY TO THE PARTNER AN D TRUST IS ALLOWED BY THE ASSESSING OFFICER. THE LD. CIT(A PPEALS) HELD THAT DEPRECIATION IS ALSO ALLOWABLE IN THE LIG HT OF DECISION IN THE CASE OF M/S HARBHAJAN SINGH & CO., DECIDED BY ITAT CHANDIGARH BENCH IN ITA 183/CHD/2013. WE FIND THAT THE EARLIER BENCH OF THE TRIBUNAL HAS NOT DECIDED THE SECOND ISSUE IN THE EA RLIER ORDER DATED 15.07.2014 ALLOWING THE DEPARTMENTAL AP PEAL PARTLY. 4. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES. THE LD. DR RELIED UPON DECISION OF HON'BL E PUNJAB & HARYANA HIGH COURT IN THE CASE OF M/S J.J. ASSOCIATES V CIT DATED 02.12.2010 AND IN THE CASE O F SURINDER PAL NAYYAR V CIT DATED 07.08.2008 ( 177 TA XMAN 207) AND SUBMITTED THAT THE ASSESSEE WILL NOT BE EN TITLED TO DEPRECIATION SEPARATELY. ON THE OTHER HAND, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE DECISION OF THE 3 TRIBUNAL IN THE CASE OF M/S HARBHAJAN SINGH & CO. (SUPRA) HAS BEEN CONFIRMED BY THE HON'BLE PUNJAB & HARYANA HIGH COURT IN ITS LATER DECISION IN ITA 31/ 2014 DATED 13.11.2014. COPY OF THE JUDGEMENT IS PLACED ON RECORD. 5. CONSIDERING THE ABOVE FACTS, THOUGH WE FIND THAT THERE IS A MISTAKE APPARENT ON RECORD BECAUSE EARLI ER BENCH OF THE TRIBUNAL, HAS NOT DECIDED THIS ISSUE W HILE PASSING THE ORDER IN DEPARTMENTAL APPEAL DATED 15.07.2014 BUT IT BEING A SMALL ISSUE, WE PROPOSE T O DECIDE THE SAME IN THE PRESENT MISCELLANEOUS APPLIC ATION ITSELF. 6. THE REVENUE ON THE SECOND ISSUE IN THE DEPARTMEN TAL APPEAL HAS CONTENDED THAT LD. CIT(APPEALS) HAS ERRE D IN ALLOWING DEPRECIATION CLAMED BY FOLLOWING THE CASE OF M/S HARBHAJAN SINGH & CO., SANGRUR. IT IS ALSO STATED IN THE GROUND OF APPEAL THAT DECISION IN THIS CASE HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND APPEAL OF THE DEPART MENT IS PENDING BEFORE HIGH COURT. NOW THE HON'BLE PUNJ AB & HARYANA HIGH COURT HAD DECIDED THE DEPARTMENTAL APP EAL IN THE CASE OF CIT VS HARBHAJAN SINGH & CO. VIDE OR DER DATED 13.11.2014 (SUPRA) AND DEPARTMENTAL APPEAL HA S BEEN DISMISSED. COPY OF THE JUDGEMENT IS PLACED ON RECORD IN WHICH HON'BLE HIGH COURT, CONSIDERING ITS EARLIER DECISION, AFFIRMED THE ORDER OF THE TRIBUNAL IN ALL OWING DEPRECIATION TO THE ASSESSEE. THEREFORE, THE GROUN D OF APPEAL OF THE DEPARTMENT IN DEPARTMENTAL APPEAL WOU LD 4 NOT SURVIVE. THE LD. DR RELIED UPON EARLIER DECISI ONS OF THE HON'BLE PUNJAB & HARYANA HIGH COURT PRIOR TO TH E DECISION IN THE CASE OF M/S HARBHAJAN SINGH & CO. (SUPRA). THEREFORE, WE DO NOT FIND ANY ERROR IN TH E ORDER OF LD. CIT(APPEALS) IN GRANTING DEPRECIATION SEPARA TELY TO THE ASSESSEE EVEN IF NET PROFIT RATE HAS BEEN APPLI ED IN THE MATTER. THIS ISSUE IN DEPARTMENTAL APPEAL IS, THER EFORE, DECIDED AGAINST THE REVENUE. SECOND GROUND/ISSUE IN DEPARTMENTAL APPEAL IS DISMISSED. 7. THE ABOVE ORDER IN PARA 6 SHALL FORM PART OF THE EARLIER ORDER OF THE TRIBUNAL DATED 15.07.2014 THRO UGH WHICH THE DEPARTMENTAL APPEAL HAS BEEN PARTLY ALLOW ED. THE RESULT OF THE DEPARTMENTAL APPEAL IN ITA 188/20 14 SHALL REMAIN SAME AND THE DEPARTMENTAL APPEAL WOULD BE DEEMED TO BE PARTLY ALLOWED AS HELD EARLIER VIDE OR DER DATED 15.07.2014. WITH THESE OBSERVATIONS AND FIND INGS, THE DEPARTMENTAL MISCELLANEOUS APPLICATION STANDS DISPOSED OFF. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (RANO JAIN) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 15 TH DECEMBER,2015. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH