ACIT, CHENNAI v. M/s. P.ORR & Sons, CHENNAI

ITA 2166/CHNY/2010 | 2005-2006
Pronouncement Date: 21-07-2011 | Result: Allowed

Appeal Details

RSA Number 216621714 RSA 2010
Assessee PAN AAACP3504B
Bench Chennai
Appeal Number ITA 2166/CHNY/2010
Duration Of Justice 6 month(s) 29 day(s)
Appellant ACIT, CHENNAI
Respondent M/s. P.ORR & Sons, CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 21-07-2011
Appeal Filed By Department
Order Result Allowed
Bench Allotted B
Tribunal Order Date 21-07-2011
Date Of Final Hearing 21-07-2011
Next Hearing Date 21-07-2011
Assessment Year 2005-2006
Appeal Filed On 23-12-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH B CHENNAI (BEFORE SHRI U.B.S. BEDI JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE ACCOUNTANT MEMBER) .. I.T.A. NO. 2166/MDS/2010 ASSESSMENT YEAR : 2005-06 THE ASSISTANT COMMISSIONER OF INCOME TAX COMPANY CIRCLE V(2) CHENNAI 600 034. (APPELLANT) V. M/S P. ORR & SONS 22 ANNA SALAI CHENNAI 600 002. PAN : AAACP3504B (RESPONDENT) APPELLANT BY : SHRI P.B. SEKARAN CIT - DR RESPONDENT BY : SHRI R. ME ENAKSHISUNDARAM O R D E R PER ABRAHAM P. GEORGE ACCOUNTANT MEMBER : IN THIS APPEAL OF THE REVENUE ITS GRIEVANCE IS TH AT THE CIT(APPEALS) ALLOWED DEPRECIATION CLAIMED BY THE AS SESSEE ON WINDMILLS DESPITE THE FACT THAT THE LETTER OF TAMIL NADU ELECTRICITY BOARD DATED 31.3.2005 CONSIDERED BY THE CIT(APPEALS ) WAS NEVER PUT TO THE ASSESSING OFFICER NOR PRODUCED BEFORE HI M DURING THE COURSE OF ASSESSMENT PROCEEDINGS. I.T.A. NO. 2166/MDS/10 2 2. SHORT FACTS APROPOS ARE THAT ASSESSEE ENGAGED I N THE BUSINESS OF SALE AND SERVICE OF WATCHES HAD SET OFF FROM IT S INCOME THEREFROM LOSS ON WINDMILLS ON ACCOUNT OF DEPRECIATION ON PLA NT AND MACHINERY ` 61 35 181/-. THOUGH ASSESSEE WAS REQUIRED TO FURN ISH DETAILS OF THE INCOME FROM WINDMILLS DIVISION IT SEEMS NO SUC H DETAILS WERE FURNISHED BEFORE THE ASSESSING OFFICER. ASSESSING OFFICER WAS OF THE OPINION THAT ASSESSEE HAVING NOT OFFERED ANY INCOME FROM WINDMILLS DEPRECIATION COULD NOT ALLOWED. HE THEREFORE DIS ALLOWED THE CLAIM OF DEPRECIATION. 3. BEFORE LD. CIT(APPEALS) ASSESSEE ARGUED THAT IT HAD COMPLIED WITH REQUIREMENTS OF SECTION 32 OF INCOME-TAX ACT 1961 (IN SHORT THE ACT). THEREFORE DEPRECIATION OUGHT HAVE BEEN ALL OWED. AS PER THE ASSESSEE THE ASSET WAS PHYSICALLY PRESENT AND IT W AS USED FOR THE PURPOSE OF BUSINESS. ASSESSEE ALSO SUBMITTED THAT TRIAL RUN WAS DONE AND TEN UNITS OF POWER WAS PURCHASED. IN SUPP ORT OF THIS IT PRODUCED LETTER DATED 31.3.2005 ISSUED BY TAMIL NAD U ELECTRICITY BOARD. CONSIDERING THE LETTER OF TAMIL NADU ELECTR ICITY BOARD LD. CIT(APPEALS) HELD THAT DEPRECIATION CLAIM COULD BE ALLOWED. HE THEREFORE DELETED THE ADDITION MADE BY THE A.O. I.T.A. NO. 2166/MDS/10 3 4. NOW BEFORE US LEARNED D.R. SUBMITTED THAT THE L ETTER OF TAMIL NADU ELECTRICITY BOARD ON WHICH RELIANCE WAS PLACED BY LD. CIT(APPEALS) FOR DELETION OF ADDITION WAS NEVER PUT BEFORE THE ASSESSING OFFICER NOR PRODUCED BY THE ASSESSEE DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS. THEREFORE ACCORDING TO HI M THERE WAS A CLEAR VIOLATION OF RULE 46A OF INCOME-TAX RULES 19 62. 5. PER CONTRA LEARNED A.R. SUBMITTED THAT THE LETT ER WAS VERY CLEAR AND CATEGORICALLY PROVING THE USE OF WINDMILLS DURI NG RELEVANT PREVIOUS YEAR AND NO PURPOSE WOULD BE SERVED BY REM ITTING THE ISSUE BACK TO A.O. 6. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL C ONTENTIONS. ASSESSING OFFICER HAD DISALLOWED THE CLAIM OF DEPRE CIATION SINCE ASSESSEE FAILED TO PRODUCE ANY DETAILS BEFORE HIM. LD. CIT(APPEALS) WAS OF THE OPINION THAT ASSESSEE HAD INDEED MADE A TRIAL RUN AND FOR THIS PURPOSE HE RELIED ON THE LETTER NO.EE/PDM /DM/F.W.F./ HTSC.NO. 409/2005 DATED 31.03.2005 OF TNEB. NO DOU BT IT HAS BEEN MENTIONED IN THIS LETTER THAT THE WINDMILL INS TALLED WAS COMMISSIONED BY THE ASSESSEE AND METER READINGS WER E ALSO MENTIONED. NEVERTHELESS THIS CRITICAL EVIDENCE WA S NEVER PRODUCED I.T.A. NO. 2166/MDS/10 4 BEFORE THE ASSESSING OFFICER NOR PUT BY THE LD. CIT (APPEALS) TO HIM FOR HIS OPINION. THEREFORE THERE WAS A CLEAR VIOL ATION OF RULE 46A OF INCOME-TAX RULES 1962. WE THEREFORE SET ASIDE THE ORDERS OF LD. CIT(APPEALS) AND A.O. AND REMIT THE ISSUE TO THE FI LE OF A.O. FOR FRESH CONSIDERATION. ASSESSEE SHALL BE GIVEN AN OPPORTUN ITY TO EXPLAIN ITS CASE AND PRODUCE NECESSARY RECORDS IN SUPPORT AND T HE A.O. SHALL PROCEED IN ACCORDANCE WITH LAW. 7. IN THE RESULT THE APPEAL FILED BY THE REVENUE I S ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON THE TWENTY FIRST DAY OF JULY 2011. SD/- SD/- (U.B.S. BEDI) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI DATED THE 21 ST JULY 2011. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A)-V CHENNAI-34 (4) CIT CHENNAI-III CHENNAI (5) D.R. (6) GUARD FILE