The ACIT,(OSD) Circle-8,, Ahmedabad v. Soma Textiles & Industries Ltd.,, Ahmedabad

ITA 1554/AHD/2008 | 2005-2006
Pronouncement Date: 13-08-2010 | Result: Dismissed

Appeal Details

RSA Number 155420514 RSA 2008
Assessee PAN AAADC0405R
Bench Ahmedabad
Appeal Number ITA 1554/AHD/2008
Duration Of Justice 2 year(s) 3 month(s) 7 day(s)
Appellant The ACIT,(OSD) Circle-8,, Ahmedabad
Respondent Soma Textiles & Industries Ltd.,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 13-08-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 13-08-2010
Date Of Final Hearing 11-08-2010
Next Hearing Date 11-08-2010
Assessment Year 2005-2006
Appeal Filed On 06-05-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BEFORE SHRI G.D.AGRAWAL VICE-PRESIDENT (AZ) AND SHRI MUKUL KR. SHRAWAT JUDICIAL MEMBER DATE OF HEARING : 11/08/2010 DRAFTED ON: 12 /08/2010 ITA NO.1554/AHD/2008 ASSESSMENT YEAR : 2005-06 THE ACIT (OSD) CIR-8 AHMEDABAD` VS. SOMA TEXTILES & INDUSTRIES LTD. RAKHIAL ROAD RAKHIAL AHMEDABAD PAN/GIR NO. : AAADC 0405 R (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI SHELLEY JINDAL CIT-DR RESPONDENT BY: SHRI M.K. PATEL O R D E R PER SHRI MUKUL KR. SHRAWAT JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE REVENUE WHI CH HAS EMANATED FROM THE ORDER OF LEARNED CIT(APPEALS)-XIV AHMEDAB AD DATED 14/02/2008 PASSED FOR ASSESSMENT YEAR 2005-06 AND T HE SOLITARY SUBSTANTIAL GROUND READS AS UNDER:- 1. THE LD. COMMISSIONER OF INCOME-TAX(A)-XIV AHM EDABAD HAS ERRED IN LAW AND ON FACTS IN DIRECTING TO ALLOW DEP RECIATION AT ENHANCED RATE OF 50% ON ASSETS PURCHASED UNDER TECH NOLOGY UPGRADATION FUND SCHEME AMOUNTING TO RS.62 72 746/- . 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S.143(3) OF THE I.T. ACT 1961 DATED 24/12 /2007 WERE THAT THE ASSESSEE-COMPANY HAS CLAIMED DEPRECIATION AT THE R ATE OF 50% ON THE ITA NO.1 554/AHD/2008 ACIT(OSD) VS. SOMA TEXTILES & INDUS.LTD. ASST.YEAR - 2005-06 - 2 - GROUND THAT THE SAID CLAIM WAS ELIGIBLE UNDER TECHN OLOGY UPGRADATION FUND SCHEME (TUFS). THE ASSESSING OFFICER HAS MEN TIONED THAT THE SAID ISSUE HAD ALREADY BEEN TAKEN UP BY THE ASSESSI NG OFFICER FOR ASSESSMENT YEAR 2004-05 AND ON IDENTICAL FACTS THE ASSESSEE WAS HELD AS ELIGIBLE FOR 25% RATE OF DEPRECIATION. ACCORDINGL Y THE EXCESS CLAIM OF DEPRECIATION WAS DISALLOWED. WHEN THE MATTER REAC HED BEFORE THE FIRST APPELLATE AUTHORITY THE LEARNED CIT(APPEALS) HAS A LSO FOLLOWED THE ORDER OF THE ASSESSMENT YEAR 2004-05 AND HELD THAT THE ASSESSEE IS ENTITLED FOR HIGHER RATE OF DEPRECIATION ON TUFS PU RCHASES. 3. NOW BEFORE US THE ORDER FOR ASSESSMENT YEAR 20 04-05 IN ASSESSEES OWN CASE PASSED BY THE RESPECTED CO-ORDI NATE BENCH A AHMEDABAD BEARING ITA NO.778/AHD/2008 DATED 01/05/2 008 (COPY PLACED ON RECORD) WHEREIN REVENUES STAND WAS DISM ISSED VIDE PARAGRAPH NOS.2 3 & 4; REPRODUCED BELOW:- 2. ASSESSEE FILED RETURN OF INCOME SHOWING NIL INC OME AND THEREAFTER FILED REVISED RETURN 24-3-2005 TO CLAIM BENEFIT OF HIGHER RATE OF DEPRECIATION AVAILABLE TO THE ASSESSEE COMPANY O N ASSETS BROUGHT UNDER THE TECHNOLOGY UPGRADATION FUNDS SCHEME (TUFS ) ANNOUNCED BY THE GOVERNMENT OF INDIA MINISTRY OF TEXTILE. W HEN THE CASE WAS SELECTED FOR SCRUTINY AND QUERIES WERE RAISED ON TH E ALLOWANCE OF HIGHER DEPRECIATION UNDER TUFS ASSESSEE CLAIMED EN HANCED RATE OF DEPRECIATION AT THE RATE OF 50% ON MACHINES ELIGIBL E UNDER TUFS. AO ALLOWED CLAIM OF THE ASSESSEE ONLY AT THE RATE OF 2 5% ON THE GROUND THAT SANCTION OF LOAN UNDER TUFS WAS GRANTED TO THE ASSESSEE BY FINANCIAL INSTITUTION ONLY ON 24-3-2004 WHEREAS THE PROJECT HAS BEEN EXECUTED DURING THE ELIGIBLE PERIOD I.E. BETWEEN 1- 4-1999 AND 31-3- 2004 THEREFORE MACHINERY INSTALLED DURING A.Y.200 2-03 AND 2003-04 WAS NOT ELIGIBLE FOR HIGHER RATE OF DEPRECIATION. 3. IN FIRST APPEAL CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE BY FOLLOWING OBSERVATIONS: ITA NO.1 554/AHD/2008 ACIT(OSD) VS. SOMA TEXTILES & INDUS.LTD. ASST.YEAR - 2005-06 - 3 - 2.3 I HAVE CONSIDERED THE FACTS OF THE CASE AND TH E SUBMISSIONS OF THE APPELLANT. I AM INCLINED TO AGREE WITH THE VIE WS OF THE APPELLANT. AS PER GOVT. OF INDIA MINISTRY OF TEXTILES NO.28(2 2)(/2002/MS/45 DATED 10/11-3-2004 HIGHER DEPRECIATION IS ELIGIBLE EVEN IF THE FUND OF THE PROJECT IS MADE BY INTERNAL ACCRUAL AND LATER O N THE TERM LOAN HAS BEEN RECEIVED PROVIDED THE PROJECT MEETS THE BENCH MARKED TECHNOLOGY AND OTHER ELIGIBILITY NORMS. THE AO IS DIRECTED TO ALLOW HIGHER RATE OF DEPRECATION IF THE PROJECT MEETS THE PRESCRIBED NORMS AND NOT TO DISALLOW THE HIGHER RATE OF DEPRECIATION ON THE GROUND THAT THE TERM LOAN WAS RECEIVED ON 24-3-2004. THE APPEL LANT GETS RELIEF ON THIS POINT. 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIAL PLACED ON RECORD. WE FIND NO INFIRMITY IN THE ORDE R OF CIT(A) ON THIS ISSUE INASMUCH AS ADDITIONAL DEPRECIATION WAS CLA IMED BY THE ASSESSEE IN ACCORDANCE WITH THE SCHEME LAID DOWN BY GOVERNMENT OF INDIA IN THE FORM OF RESOLUTION OF MINISTRY OF TEXT ILES CITED SUPRA. IT IS EMERGED FROM THE RECORD THAT ASSESSEE HAS ALREADY A PPROACHED IDBI BEFORE MAKING ITS OWN INVESTMENT AND THEREAFTER ICI CI BANK WHICH WAS SANCTIONED ON 24-3-2004. CIT(A) HAS RIGHTLY HELD T HAT HIGHER DEPRECIATION HAS TO BE ALLOWED IN CASE PROJECTS MEE TS PRESCRIBED NORMS AND NOT TO DISALLOW HIGHER RATE OF DEPRECIATI ON ON THE GROUND THAT TERM LOAN WAS RECEIVED ON 24-3-2004 WHICH IS UPHELD THIS GROUND OF REVENUE IS DISMISSED. 4. SINCE THE VIEW HAS ALREADY BEEN TAKEN IN FAVOUR OF THE ASSESSEE AND IN THE PAST REVENUES APPEAL HAS ALREADY BEEN DISMI SSED THEREFORE FOLLOWING THE SAME FOR THIS YEAR AS WELL WE FIND N O FORCE IN THIS GROUND HENCE DISMISSED. 5. IN THE RESULT THE APPEAL OF THE REVENUE IS DI SMISSED. ORDER SIGNED DATED AND PRONOUNCED IN THE COURT ON 13/ 08 /2010. SD/- SD/- ( G.D.AGRAW AL ) ( MUKUL KR. SHRAWAT ) VICE PRESIDENT (AZ) JUDICIAL ME MBER AHMEDABAD; DATED 13 / 08 /2010 T.C. NAIR SR. PS ITA NO.1 554/AHD/2008 ACIT(OSD) VS. SOMA TEXTILES & INDUS.LTD. ASST.YEAR - 2005-06 - 4 - COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE DEPARTMENT. 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-XIV AHMEDABAD 5. THE DR AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER //TRUE COPY// (DY./ASSTT.REGISTRAR) ITAT AHMEDABAD