Sunshine Pavings Pvt.Ltd.,, Pune v. Asstt.CIT, Cir.6, Pune, Pune

ITA 1431/PUN/2009 | 2001-2002
Pronouncement Date: 25-03-2011 | Result: Allowed

Appeal Details

RSA Number 143124514 RSA 2009
Bench Pune
Appeal Number ITA 1431/PUN/2009
Duration Of Justice 1 year(s) 3 month(s) 14 day(s)
Appellant Sunshine Pavings Pvt.Ltd.,, Pune
Respondent Asstt.CIT, Cir.6, Pune, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 25-03-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 25-03-2011
Date Of Final Hearing 18-03-2011
Next Hearing Date 18-03-2011
Assessment Year 2001-2002
Appeal Filed On 11-12-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI SHAILENDRA KUMAR YA DAV J UDICIAL MEMBER AND SHRI D. KARUNAKARA RAO A CCOUNTANT M EMBER ITA NO. 14 31 /PN/ 20 0 9 ( ASSTT. YEAR : 2001 - 02 ) SUNSHINE PAVINGS PVT. LTD. APPEL LANT C/O. SHAH KHANDELWAL JAIN & ASSOCIATES CHARTERED ACCOUNTANTS 1 ST FLOOR ALANKAR CINEMA BUILDING PUNE - 411001 PAN : NOT AVAILABLE VS. ASST. C.I.T. CIR 6 PUNE RESPONDENT APP ELLANT BY : SHRI NILESH KHANDELWAL RESPONDENT BY : SHR I ABHAY DAMLE ORDER PER D KARUNAKARA RAO AM THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF CIT(A) III PUNE DATED 9.10.2008. THE GROUNDS RAISED READ AS UNDER : 1. ON FACTS & CIRCUMSTANCES PREVAILING IN THE CASE & AS PER PROVISIONS OF LAW IT BE HELD THAT THE CLAIM OF DEDUCTION OF DEPRECIATION SHOULD HAVE BEEN ALLOWED SEPARATELY. IT FURTHER BE HELD THAT THE ASSESSING OFFICER & THE 1 ST APPELLATE AUTHORITY ARE IN ERROR IN NOT CONSIDERING & GRANTING THE CLAIM & DEDUCTION OF AMOUNT OF DEPRECIATION SEPARATELY. IT FURTHER BE HELD THAT THE INFERENCE DRAWN BY THE ASSESSING OFFICER & THE 1 ST APPELLATE AUTHORITY INTERPRETING THE DIRECTION GIVEN BY THE HONBLE TRIBUNAL IS WRONG & IS CONTRARY TO SUCH DIRECTIONS. IT BE HELD THAT THE APPELLANT IS ENTITLED TO DEPRECIATION AS CLAIMED ON ITS PLANT & MACHINERY. THE CLAIM OF THE DEPRECIATION BE ALLOWED TO THE APPELLANT AS PER PROVISIONS OF LAW SCHEME OF THE ACT & FACTS PREVAILING IN THE CASE. THE APPELLANT BE GRAN TED JUST & PROPER RELIEF IN THIS RESPECT. IT FURTHER BE HELD THAT OBSERVATIONS MADE AND INFERENCE DRAWN BY THE LEARNED TAXING AUTHORITIES BELOW ARE ERRONEOUS CONTRARY & INCONSISTENT TO THE FACTS OF THE CASE. 2. ON FACTS & CIRCUMSTANCES PREVAILING IN TH E CASE & AS PER PROVISIONS OF LAW IT BE HELD THAT NO DEPRECIATION HAS BEEN ALLOWED TO THE APPELLANT AS PER PROVISIONS OF LAW & FACTS PREVAILING IN THE CASE. 3. WITHOUT PREJUDICE TO THE GROUND NO. 1 & IN THE ALTERNATIVE IF IT IS HELD THAT T HE APPELLANT IS NOT ENTITLED TO THE CLAIM OF DEPRECIATION & DEDUCTION ON THAT ACCOUNT SEPARATELY IN THE YEAR UNDER APPEAL SUITABLE DIRECTION BE GIVEN TO CONSIDER THE CONSEQUENTIAL RELIEF RESULTING THEREFROM PERTAINING TO THE DEPRECIATION ALLOWED IN THE SUBSEQUENT Y EAR ON WORKING OF WRITTEN DOWN VALUE OF THE CONCERNED DEPRECIABLE ASSETS. THE APPELLANT ITA 1431 /PN/ 2009 SUNSHINE PAVINGS PVT. LTD. ( A.Y. 2001 - 02 ) . 2 BE GRANTED CONSEQUENTIAL RELIEF & AS PER PROVISIONS OF LAW & FACTS PREVAILING IN THE CASE. 2. DURING THE PROCEEDINGS BEFORE US A T THE VERY OUTSET THE LD. COUNSEL SUM MED UP STATING THAT THE ASSESSEE IS IN THE SECOND ROUND OF THE PROCEEDINGS BEFORE THE TRIBUNAL. DURING THE FIRST ROUND ON THE ISSUE OF CLAIM OF DEPRECIATION U/S 32 OF THE ACT THE HON BLE TRIBUNAL DIRECTED THE A.O TO ADJUDICATE THE ISSUE DE NOVO AND SET OUT CERTAIN GUIDELINES AS TO THE DISCHARGING OF THE ONUS ON THE DUAL ISSUES OF (1) OWNERSHIP OF THE ASSETS ; AND (2) THE USE OF THE ASSETS FOR BECOMING ENTITLED FOR CLAIM OF DEDUCTION U/S. 32 OF THE ACT. WHILE GIVING EFFECT TO THE GUIDELINES IN ORDER OF THE TRIBUNAL BEFORE THE AO THE ASSESSEE COULD ONLY MANAGE TO FILE THE COPIES OF THE BILLS IN SUPPORT OF THE DEPRECIATION CLAIM AND THE ASSESSEE COULD NOT FILE THE ORIGINAL BILLS/INVOICES EVIDENCING THE OWNERSHIP OF THE ASSET AS WANTED BY THE AO AND IT IS AN UN DISPUTE D FACT . DURING THE PROCEEDINGS BEFORE THE CIT(A) THE ASSESSEE COULD NOT IMPROVE HIS CASE AS THE ORIGINAL INVOICE S IN QUESTION WERE LOST AND COULD NOT BE TRACED. THEREFORE THE CIT(A) CONFIRMED THE DISALLOWANCE ON ACCOUNT OF DEPRECIATION AS CLAI MED BY THE A SSESSEE IN THE ORIGINAL RETURN. THE ASSESSEE COULD NOT EVEN FILE THE CIRCUMSTANTIAL EVIDENCES LIKE BANK TRANSACTIONS EVIDENCING THE PAY OUTS FOR PURCHASE OF THE IMPUGNED ASSETS OR CONFIRMATION LETTERS FROM THE SUPPLIERS ETC. IT IS IN THIS BACKG ROUND THE ASSESSEE IS BEFORE TRIBUNAL IN THE SECOND ROUND OF THE PROCEEDINGS. 3. DURING PROCEEDINGS BEFORE US LD. COUNSEL FOR THE ASSESSEE FAIRLY REITERATED THAT THE ASSESSEE LOST THE ORIGINAL INVOICES RELATABLE TO THE DEPRECIABLE ASSETS IN QUESTION. FURTHER HE MENTIONED THAT THE FACT OF USE OF THE ASSETS IS EVIDENCED BY THE INCOME GENERATED BY THE ASSESSEE AND EARNING OF THE SAID INCOME IS IMPOSSIBLE WITHOUT THE IMPUGNED ASSETS BEING USED BY THE ASSESSEE DURING THE YEAR AND T HEREFORE THE EXISTENCE O F THE ASSETS CANNOT BE SUSPECTED. FURTHER HE MENTIONED THAT HE HAS EVIDENCES IN SUPPORT OF THE PAYMENTS MADE BY THE ASSESSEE FOR ACQUIRING THE IMPUGNED ASSETS IN QUESTION WHICH SHALL BE PRODUCED IF ANOTHER CHANCE IS GIVEN TO THE ASSESSEE TO GO TO THE AO . PER CONTRA LD. D.R. FOR THE REVENUE RELIED ON THE ORDERS OF THE REVENUE AND ARGUED VEHEMENTLY STATING THAT ASS ESSEE HAS FAILED TO COMPLY WITH THE DIRECTIONS OF THE TRIBUNAL IN THE SECOND ROUND OF THE PROCEEDI NGS BEFORE HIM THE FIRST BEING THE ORIGINAL ASSESSMENT PRO CEEDINGS. FURTHER IT WAS CONTEST ED THAT CONSIDERING THE FACT THAT THE ASSESSEE FAILED TO DISCHARGE THE ONUS THE ADDITIONS MADE MAY BE CONFIRMED. ITA 1431 /PN/ 2009 SUNSHINE PAVINGS PVT. LTD. ( A.Y. 2001 - 02 ) . 3 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AS WELL AS OUR ORDER PASSED IN THE FIRST ROUND OF THE PROCEEDINGS. THE ASSESSEE IS A ROAD CONTRACTOR AND MOST OF THE WORK WAS UNDERTAKEN FOR P UNE M UNICIPAL C ORPORATION (PMC) . ASSESSEE IS IN POSSESSION OF CERTAIN ASSETS WHICH ARE ALLEGEDLY ACQUIRED AND ALLEGEDLY USED IN THE BUSINESS OF THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION AND HOWEVER THE ORIGINAL INVOICES COULD NEVER BE FILED BY HIM. THE CONCISE REASON FOR THE SAME IS THEY WERE L OST. HOWEVER ASSESSEE MANAGED TO FILE THE XEROX COPIES OF THE BILLS WHICH WER E NOT ACCEPTED BY THE A.O AS BONA FIDE . FROM THE RECORDS IT IS EVIDENT THAT NOBODY HAS GONE INTO THE OTHER ASPECTS OF EVIDENCES IN SUPPORT OF THE ACQUISITION OF THE ASSETS WHICH INCLUDES (I) FINANCIAL TRANSACTION EVIDENCED IN THE PURCHASE OF IMPUGNED D EPRECIABLE ASSETS AND (II) EVIDENCES FROM THE BOOKS OF ACCOUNTS OF THE SUPPLIER OF THE IMPUGNED ASSETS . IN OUR OPINION CONSIDERING THE PROFIT EARNED BY THE ASSESSEE WE FIND THE SAME COULD NOT HAVE BEEN POSSIBLE WITHOUT THE USE OF THE ASSETS. IT IS ALSO NOT THE CASE OF THE REVENUE THE ASSESSEE OUTSOURCED THE ASSETS. THEREFORE I T IS IN THE INTEREST OF JUSTICE THAT DENYING THE CLAIM OF DEPRECIATION MERELY FOR WANT OF ORIGINAL BILLS IS NOT FAIR M ORE SO WHEN THE ASSESSEE CAME UP WITH THE XEROX COPIES OF TH E BILLS. THEREFORE WE ARE OF THE OPINION THAT AN OPPORTUNITY SHOULD BE GRANTED TO THE ASSESSEE TO NOT ONLY TO DEMONSTRATE THAT THE ORIGINAL BILLS WERE FACTUALLY LOST BUT ALSO TO DEMONSTRATE OTHER CIRCUMSTANTIAL EVIDENCES SUCH AS FINANCIAL TRANSACTIONS BA NK ACCOUNT DETAILS EVIDENCED IN THE TRANSFER OF MONEY FROM HIS ACCOUNTS TO THE SUPPLIERS OF THE MACHINES SOME CONFIRMATION LETTERS FROM THE SUPPLIERS IN SUPPORT OF THE SALE OF THE MACHINER TO THE ASSESSEE ETC. IF NEEDED THE A.O MAY SUMMON THE SUPPLIER O F THE ASSETS IF ASSESSEE FAILS TO PRODUCE HIS BOOK OF ACCOUNTS PROVIDED THAT THE ASSESSEE IS UNABLE TO PRODUCE THE PARTY . IN ANY CASE IT IS A SETTLED ISSUE THAT THE PRIMARY ONUS IS ON THE ASSESSEE AS THE CLAIM OF DEDUCTION U/S 32 OF THE ACT IS MADE BY THE ASSESSEE . THEREFORE WE ARE OF THE OPINION THAT THE ISSUE MUST BE SET ASIDE TO THE FILES OF THE A.O IN THE INTEREST OF JUSTICE. A.O. IS DIRECTED TO EXAMINE THE ISSUE AFRESH FROM EVERY ANGLE BOTH LEGAL AS WELL AS FACTUAL ASP ECTS IN ORDER TO COME TO THE C ORRECT CONCLUSI ON ON THE CLAIM OF THE ASSESSEE RELATING TO DEPRECIATION U/S. 32 OF THE ACT. ACCORDINGLY AS WANTED BY THE ASSESSEE THE GROUNDS RAISED IN THE APPEAL ARE SET ASIDE. 4. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPO SES. ORDER PRONOUNCED IN OPEN COURT ON 25TH MARCH 201 1 SD/ - SD/ - ITA 1431 /PN/ 2009 SUNSHINE PAVINGS PVT. LTD. ( A.Y. 2001 - 02 ) . 4 ( SHAILENDRA KUMAR YADAV ) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE DATED THE 25TH MARCH 201 1 US COPY OF THE ORDER IS FORWARDED TO : 1. THE A PP ELLANT 2. THE RESPONDENT 3. THE CIT(A) - I I I PUNE 4. THE CIT - I II PUNE 5. THE D.R. ITAT A BENCH 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE