The ITO, Ward-8(2),, Ahmedabad v. Soham Cold Storage Pvt. Ltd.,, Ahmedabad

ITA 1905/AHD/2007 | 2004-2005
Pronouncement Date: 29-03-2010 | Result: Dismissed

Appeal Details

RSA Number 190520514 RSA 2007
Assessee PAN AAFCS2067M
Bench Ahmedabad
Appeal Number ITA 1905/AHD/2007
Duration Of Justice 2 year(s) 10 month(s) 22 day(s)
Appellant The ITO, Ward-8(2),, Ahmedabad
Respondent Soham Cold Storage Pvt. Ltd.,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 29-03-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 29-03-2010
Date Of Final Hearing 29-03-2010
Next Hearing Date 29-03-2010
Assessment Year 2004-2005
Appeal Filed On 07-05-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI BHAVNESH SAINI JUDICIAL MEMBER AND SHRI N.S. SAINI ACCOUNTANT MEMBER DATE OF HEARING: 29.03.10 DRAFTED ON:29.03.10 ITA NO.1905/AHD/2007 ASSESSMENT YEAR : 2004-2005 THE I.T.O. WD.8(2) 4 TH FLOOR AJANTA COMM. CENTER A WING ASHRAM ROAD AHMEDABAD. VS. THE PRINCIPAL OFFICER SOHAM COLD STORAGE PVT. LTD. 1 LAXMI COMPLEX HIGHWAY SABARMATI AHMEDABAD. PAN/GIR NO. : AAFCS2067M (APPELLANT) .. (RESPONDENT) APPELLANT BY : KUMAR HRISHIKESH SR. D.R. RESPONDENT BY: NONE O R D E R PER N.S.SAINI ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE REVENUE AGAINST TH E ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-XIV AHMEDABAD DATED 07.02.2007. 2. GROUND NO.1 OF THE APPEAL READS AS UNDER:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS )-XIV AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN LOOKING TO THE FACTS OF THE CASE THE CIT(A) OUGHT TO HAVE UPHELD THE DECISION OF THE ASSESSING OFFICER IN ALLOWING DEPRE CIATION @ 10% ONLY. 3. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS DECIDED THE ISSUE AS UNDER:- - 2 - 3.1 THE SECOND GROUND OF APPEAL RELATES TO DISALLO WANCE OF DEPRECIATION OF RS.12 18 640/-. THE A.O. HAS ALLOWE D DEPRECIATION ON COLD STORAGE BUILDING @ 10% INSTEAD OF 25% CLAIM ED BY THE APPELLANT. THE APPELLANT HAS CLAIMED 25% ON THIS BY CLAIMING THAT THE COLD STORAGE BUILDING IS AN INTEGRAL PART OF PL ANT. AFTER A DETAILED DISCUSSION IN THE ASST. ORDER BY RELYING UPON THE DECISION OF HON. SUPREME COURT IN THE CASE OF ANAND THEATRES . 244 1TR 192. IT WAS HELD BY THE AO THAT A BUILDING IS ESSEN TIALLY AN ASSET SEPARATE FROM PLANT AND HAS ALSO BEEN CATEGORICALLY DEFINED IN THE ACT AND THERE IS NO AMBIGUITY IN RESPECT OF TREATIN G BUILDING AS A PLANT. THE AO HAS. THEREFORE ALLOWED DEPRECIATION ON THIS BUILDING @ 10%. 3.2 THE APPELLANT DURING THE COURSE OF APPELLATE P ROCEEDINGS HAS SUBMITTED THAT THE COLD STORAGE IS REQUIRED TO BE C ONSTRUCTED AND MAINTAINED AS TO BE DAMP PROOF HEAT PROOF AND PROT ECTED AGAINST ENTRY OF OR DAMAGE TO THE STORED AGRICULTURE AND OT HER PRODUCE BY PESTS NOXIOUS INSECTS RATS AND OTHER RODENTS. TH E SAME IS TO BE PROVIDED WITH INSULATION OF THE FLOORS ROOFS AND D OORS AND INSULATION AND WATER PROOFING TREATMENT IS TO BE DO NE IN A PROPER MANNER IN ACCORDANCE WITH COLD TEMPERATURE TO HE MA INTAINED BELOW OR ABOVE FREEZING POINT. THE APPELLANT HAS. THEREFORE SUBMITTED THAT THE STORAGE OR CHAMBER ITSELF IS AN APPARATUS AND TOOL OF THE TRADE THROUGH WHICH THE BUSINESS IS CAR RIED ON AND THE INSULATION WITHOUT THE BUILDING CANNOT PRODUCE THE RESULT AND THE BUILDING WITHOUT THE INSULATION ALSO EQUALLY DISAST ROUS FOR THE PURPOSE. THEREFORE IT WAS CONTENDED THAT THE COLD STORAGE PLANT IS DIFFERENT FROM THE OTHER NORMAL BUILDING BECAUSE WI THOUT THE COLD STORAGE PLANT IT IS NOT POSSIBLE TO CARRY ON THE BU SINESS OF COLD STORAGE. IN SUPPORT OF ITS CONTENTIONS THE APPELLA NT PLACED SEVERAL COURT DECISIONS SUCH AS 100 1TR 155-C1T V. KANODIA COLD STORAGE (ALL); 262ITR 568- CIT VS. SHREE GOPIKISHAN INDUSTR IES (CAL.) ETC. IT WAS FURTHER SUBMITTED BY THE APPELLANT THAT THE C1T (A) HAS DELETED THE ADDITION MADE BY THE ASSESSING OFFICER FOR A.Y. 2003-04 ON THIS COUNT. 3.3 I HAVE CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSIONS OF THE APPELLANT ALONG WITH THE CASE LAWS AS RELIED UP ON. I AM INCLINED TO AGREE WITH THE APPELLANT'S VIEW THAT THE STORAGE OR CHAMBER ITSELF IS AN APPARATUS AND TOOL OF THE TRADE THROUGH WHICH THE BUSINESS IS CARRIED ON AND THE INSULATION WITHOUT THE BUILDING CANNOT PRODUCE THE RESULT AND THE BUILDING WITHOUT THE INSULATION ALSO EQUALLY - 3 - DISASTROUS FOR THE PURPOSE AND HENCE THE DEPRECIAT ION @ 25% TO THIS STORAGE BUILDING IS QUITE JUSTIFIED. BY FOLLOW ING THE CASE LAWS AS RELIED UPON AND FOLLOWING THE APPELLATE ORDER FO R EARLIER YEAR. I HOLD THAT THE COLD STORAGE BUILDING IS ELIGIBLE FOR DEPRECIATION @ 25% AND THE AO IS DIRECTED TO DELETE THE DISALLOWAN CE MADE IN THIS RESPECT. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER OF THE LEARNED ASSESSING OFFICER. 5. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASS ESSEE HAS FILED AN ADJOURNMENT APPLICATION SEEKING ADJOURNMENT OF THE HEARING ON THE GROUND THAT HE IS IN UNITED KINGDOM AND THEREFORE U NABLE TO ATTEND THE HEARING. THE BENCH WAS OF THE VIEW THAT THE APPEAL OF THE REVENUE CAN BE DISPOSED OFF WITHOUT THE ASSISTANCE OF THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE. HENCE THE APPEAL W AS HEARD EX-PARTE QUA THE RESPONDENT ASSESSEE AND DISPOSED OFF AFTER CONS IDERING THE SUBMISSION OF THE LEARNED DEPARTMENTAL REPRESENTATIVE. 6. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENT ATIVE AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RECORD. THE ASSESSEE CLAIMED DEPRECIATION @ 25% ON COLD STORAGE BUILDING BY CONSIDERING THE SAME AS PLANT WHICH WAS ALLOWED BY THE LEARNED ASSESSING OFFICER @ 10% BY TREATING THE SAM E AS BUILDING RELYING ON THE DECISION OF SUPREME COURT IN THE CAS E OF ANAND THEATERS 244 ITR 192. IN APPEAL THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ALLOWED THE CLAIM OF THE ASSESSEE FOLL OWING THE DECISION OF THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. SHREE GOPIKISHAN INDUSTRIES (CAL) 262 ITR 568 AND THE DECISION OF TH E ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. KANODIA COLD STORAGE 1 00 ITR 155 BY OBSERVING AS UNDER:- - 4 - 3.2 THE APPELLANT DURING THE COURSE OF APPELLATE PROCEEDINGS HAS SUBMITTED THAT THE COLD STORAGE IS REQUIRED TO BE C ONSTRUCTED AND MAINTAINED AS TO BE DAMP PROOF HEAT PROOF AND PROT ECTED AGAINST ENTRY OF OR DAMAGE TO THE STORED AGRICULTURE AND OT HER PRODUCE BY PESTS NOXIOUS INSECTS RATS AND OTHER RODENTS. TH E SAME IS TO BE PROVIDED WITH INSULATION OF THE FLOORS ROOFS AND D OORS AND INSULATION AND WATER PROOFING TREATMENT IS TO BE DO NE IN A PROPER MANNER IN ACCORDANCE WITH COLD TEMPERATURE TO HE MA INTAINED BELOW OR ABOVE FREEZING POINT. THE APPELLANT HAS. THEREFORE SUBMITTED THAT THE STORAGE OR CHAMBER ITSELF IS AN APPARATUS AND TOOL OF THE TRADE THROUGH WHICH THE BUSINESS IS CAR RIED ON AND THE INSULATION WITHOUT THE BUILDING CANNOT PRODUCE THE RESULT AND THE BUILDING WITHOUT THE INSULATION ALSO EQUALLY DISAST ROUS FOR THE PURPOSE. THEREFORE IT WAS CONTENDED THAT THE COLD STORAGE PLANT IS DIFFERENT FROM THE OTHER NORMAL BUILDING BECAUSE WI THOUT THE COLD STORAGE PLANT IT IS NOT POSSIBLE TO CARRY ON THE BU SINESS OF COLD STORAGE. IN SUPPORT OF ITS CONTENTIONS THE APPELLA NT PLACED SEVERAL COURT DECISIONS SUCH AS 100 1TR 155-C1T V. KANODIA COLD STORAGE (ALL); 262ITR 568- CIT VS. SHREE GOPIKISHAN INDUSTR IES (CAL.) ETC. IT WAS FURTHER SUBMITTED BY THE APPELLANT THAT THE C1T (A) HAS DELETED THE ADDITION MADE BY THE ASSESSING OFFICER FOR A.Y. 2003-04 ON THIS COUNT. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE MERELY RELIED ON THE ORDER OF THE LEARNED ASSESSING OFFICER. NEITHER COU LD HE POINT OUT ANY SPECIFIC ERROR IN THE ORDER OF THE LEARNED COMMISSI ONER OF INCOME TAX(APPEALS) NOR COULD HE CITE ANY CONTRARY DECISIO N OF HIGH COURT OR SUPREME COURT TO THAT RELIED UPON BY THE LEARNED CO MMISSIONER OF INCOME TAX(APPEALS). THEREFORE WE CONFIRM THE ORD ER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) AND DISMISSED T HE GROUND OF APPEAL OF THE REVENUE . 8. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE H EARING ON 29/03/2010. SD/- SD/- (BHAVNESH SAINI) ( N.S. SAINI ) JUDICIAL MEMBER ACCOUN TANT MEMBER AHMEDABAD; DATED 29.03.2010 - 5 - PARAS # COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS) 5. THE DR AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER //TRUE COPY// (DY./ASSTT.REGISTRAR) ITAT AHMEDABAD