M/s Deep Management & Eco Consultant Pvt. Ltd., Kanpur V. Dy. Commissioner Of Income Tax-6, Kanpur

MA 90/LKW/2014

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 3300 (ITAT-LUCKNOW)
• Duration Of Justice: 9 month(s) 3 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 19-06-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 17-04-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 16-09-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: HARISH GIDWANI
• Keywords: Depreciation
• Section: 32

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER M.A. NO.90 /LKW/20 14 (ARISING OUT OF I.T.A.NO.641/LKW/2013) ASSESSMENT YEAR:2008 - 09 M/S DEEP MANAGEMENT & ECO CONSULTANT PVT. LTD., 15/212 - B, CIVIL LINES, KANPUR. PAN:AABCD0652P VS. DY.C.I.T. - 6, KANPUR (A PPLICANT ) (RESPONDENT) APPLICANT BY SHRI RAKESH GARG, ADVOCATE RESPONDENT BY SHRI HARISH GIDWANI, D.R. DATE OF HEARING 24/04/2015 DATE OF PRONOUNCEMENT 1 9 /06/2015 O R D E R PER A. K. GARODIA, A.M. THIS MISC. APPLICATIONS IS FILED BY THE ASSESSEE ALLEGING CERTAIN MISTAKES IN THE TRIBUNAL ORDER. 2. IT IS THE SUBMISSION OF LEARNED A.R. OF THE ASSESSEE THAT AS PER EXPLANATION 5 TO SECTION 32 1) , EVEN IF THE DEPRECIATION IS NOT CLAIMED BY THE ASSESSEE, THE SAME SHOULD BE CONSIDERED FOR COMPUTING THE TAXABLE INCOME OF THE ASSESSEE. HE ALSO SUBMITTED THA T THE TRIBUNAL ORDER IS WITHOUT CONSIDERING THE PROVISIONS OF THIS EXPLANATION AND THEREFORE, THE SAME SHOULD BE RECTIFIED. 3. LEARNED D.R. OF THE REVENUE SUBMITTED THAT THERE IS NO MISTAKE IN THE TRIBUNAL ORDER. [ 2 ] 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIO NS. WE FIND THAT THE ISSUE BEFORE THE TRIBUNAL IS REGARDING APPLICABILITY OF SECTION 50 OF THE ACT. THIS ISSUE WAS DECIDED BY THE TRIBUNAL AGAINST THE ASSESSEE ON THE BASIS THAT SINCE NO DEPRECIATION HAS BEEN CLAIMED OR ALLOWED, SECTION 50 IS NOT APPLICA BLE IN RESPECT OF THE ASSET IN DISPUTE. NOW WE CONSIDER THE PROVISION OF EXPLANATION 5 TO SECTION 32 ALSO AND SEE AS TO WHETHER IT HAS ANY EFFECT ON THE DECISION OF THE TRIBUNAL. THE PROVISIONS ARE AS UNDER: EXPLANATION 5 FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED THAT THE PROVISIONS OF THIS SUB - SECTION SHALL APPLY WHETHER OR NOT THE ASSESSEE HAS CLAIMED THE DEDUCTION IN RESPECT OF DEPRECIATION IN COMPUTING HIS TOTAL INCOME. 5. AS PER THIS EXPLANATION, IT IS SEEN THAT EVEN IF DEPRECIATION HAS NOT BEEN CLAIMED BY THE ASSESSEE, THE SAME SHOULD BE ALLOWED U/S 32(1) OF THE ACT. NOW WE LOOK INTO THE PROVISIONS OF SECTION 50 OF THE ACT. AS PER THE PROVISION OF SECTION 50, NOTWITHSTANDING ANYTHING CONTAINED IN CLAUSE (42A) OF SECTION 2, WHERE THE C APITAL ASSET IS AN ASSET FORMING PART OF A BLOCK OF ASSETS IN RESPECT OF WHICH DEPRECIATION HAS BEEN ALLOWED UNDER THIS ACT OR UNDER THE INCOME TAX ACT 1922, THE PROVISIONS OF SECTION 48 & 49 SHALL BE SUBJECT TO CERTAIN MODIFICATION AS PRESCRIBED UNDER SEC TION 50 OF THE ACT. HENCE, IT IS SEEN THAT FOR THE PURPOSE OF APPLICABILITY OF SECTION 50, THE DEPRECIATION SHOULD HAVE BEEN ALLOWED ON THE CONCERNED ASSET UNDER INCOME TAX ACT 1961 OR UNDER INCOME TAX ACT 1922 AND IT IS NOT SUFFICIENT THAT THE DEPRECIATI ON WAS ALLOWABLE . IT IS NOT RELEVANT AS TO WHETHER DEPRECIATION WAS ALLOWABLE OR NOT. IF DEPRECIATION HAS BEEN ALLOWED ALTHOUGH IT WAS NOT ALLOWABLE, SECTION 50 WILL BE APPLICABLE AND IN A CASE AS IN THE PRESENT CASE, IF DEPRECIATION WAS NOT ALLOWED ALTHO UGH THE SAME WAS ALLOWABLE, SECTION 50 CANNOT BE INVOKED BY THE ASSESSEE OR BY THE REVENUE. WE ALSO FIND THAT AS PER THE FINDING GIVEN BY THE TRIBUNAL IN PARA 7.1.1 OF THE IMPUGNED ORDER, THIS FINDING IS GIVEN BY THE TRIBUNAL THAT THIS IS NOT A CASE OF THE ASSESSEE THAT WITHOUT CLAIMING THE DEPRECIATION BY THE ASSESSEE, THE DEPRECIATION ON THIS ASSET HAS BEEN ALLOWED BY THE ASSESSING OFFICER IN [ 3 ] COMPUTATION OF INCOME IN THE PRESENT YEAR OR IN ANY EARLIER YEAR. THE CONTENTION IS THAT AS PER THE PROVISIONS OF EXPLANATION 5 TO SECTION 3 2 , DEPRECIATION SHOULD BE ALLOWED EVEN IF IT IS NOT CLAIMED BY THE ASSESSEE AND AS A CONSEQUENCE, SECTION 50 SHOULD BE INVOKED BUT THIS CONTENTION IS NOT VALID BECAUSE IT IS ADMITTED POSITION THAT DEPRECIATION WAS NOT ALLOWED BY THE ASSESSING OFFICER IN ANY EARLIER YEAR AND HENCE, WITHOUT DISTURBING THE ASSESSMENT OF THOSE YEARS AND ALLOWING DEPRECIATION TO THE ASSESSEE IN SUCH EARLIER YEAR, SECTION 50 CANNOT BE MADE APPLICABLE IN THE PRESENT YEAR BY LOOKI NG TO EXPLANATION 5 TO S ECTION 3 2 OF THE ACT. WE, THEREFORE, DO NOT FIND ANY MERIT IN THE CONTENTIONS RAISED IN THE MISC. APPLICATION AND THE ARGUMENTS OF LEARNED A.R. OF THE ASSESSEE AND THE SAME ARE THEREFORE, REJECTED. 6 . IN THE RESULT, THE MISC. APPLICATION OF THE ASSESSEE IS DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 1 9 /06/2015 *C.L.SINGH COPY OF THE O RDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A ) 5. DR, ITAT, LUCKNOW ASSTT. REGISTRAR