The DCIT, Circle-3,, Ahmedabad v. Shri Udaykumar Chhabildas Patel, Ahmedabad

ITA 3109/AHD/2013 | 2010-2011
Pronouncement Date: 29-09-2016 | Result: Dismissed

Appeal Details

RSA Number 310920514 RSA 2013
Assessee PAN AATPP8316R
Bench Ahmedabad
Appeal Number ITA 3109/AHD/2013
Duration Of Justice 2 year(s) 8 month(s) 30 day(s)
Appellant The DCIT, Circle-3,, Ahmedabad
Respondent Shri Udaykumar Chhabildas Patel, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 29-09-2016
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 29-09-2016
Date Of Final Hearing 20-09-2016
Next Hearing Date 20-09-2016
Assessment Year 2010-2011
Appeal Filed On 30-12-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMADABAD BEFORE: SHRI RAJPAL YADAV JUDICIAL MEMBER SHRI AMARJIT SINGH ACCOUNTANT MEMBER ITA NO. 3109/AHD/2013 ASSESSMENT YEAR :2010-11 DY. COMMISSIONER OF INCOME TAX CIRCLE-3 ROOM NO.109 B WING 1 ST FLOOR PRATYAKSHYAKAR BHAVAN PANJRAPOLE AMBAWADI AHMEDABAD V S . SHRI UDAYKUMAR CHHABILDAS PATEL PROP. M/S. LINE O MATIC GRAPHIC INDUSTRIES PLOT NO.234 GIDC ESTATE PHASE -1 NARODA AHMEDABAD PAN NO. AATPP8316R (APPELLANT) .. (RESPONDENT) /BY REVENUE SHRI JAMES KURIAN SR. D.R. /BY ASSESSEE SHRI A. C. SHAH A.R. /DATE OF HEARING 20.09.2016 /DATE OF PRONOUNCEMENT 29.09.2016 O R D E R PER AMARJIT SINGH A.M.: THIS APPEAL IS DIRECTED AT THE INSTANCE OF REVENUE AGAINST THE ORDER OF LD. CIT(A) -6 AHMEDABAD DATED 07.10.2013 PASSED O N FOLLOWING GROUNDS: THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECT ING THE AO TO DECIDE THE ISSUE OF ADDITION MADE U/S145A ON THE BASIS OF AN I TAT DECISION WHEREIN RELIANCE HAS BEEN PLACED ON THE GUJARAT HIGH COURT JUDGMENTS IN THE CASES ITA NO. 3109/AHD/13 A.Y.10-11 (DCIT VS. SHRI UDAYKU MAR C. PATEL) PAGE 2 OF NARMADA CHEMATUR PETRO CHEMICALS LTD (327 ITR 36 9) AND UNIQUE INDUSTRIES (307 ITR 350) DESPITE THE FACT THAT THE PROVISIONS OF SECTION 145A CAME INTO EFFECT AFTER THE ASSESSMENT YEARS INVOLVE D IN THESE CASES.' THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONSIDE RING CARS AS COMMERCIAL VEHICLES ELIGIBLE FOR DEPRECIATION @50% INSTEAD OF 15% DESPITE THE FACT THAT THE SAME WERE NOT REGISTERED AS COMMERCIAL VEHICLES AND THERE WAS NO EVIDENCE OF THEIR COMMERCIAL USAGE BY THE ASSESSEE AS SUCH. 2. THE ASSESSEE IS AN INDIVIDUAL AND FILED RETURN O F INCOME ON 19.09.2010 DECLARING TOTAL INCOME OF RS.7 14 50 500/. THE ASS ESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF PAPER CONVERTING MACHI NE AND RE-SELLING OF PARTS. THE CASE WAS SCRUTINIZES U/S.143(3) OF THE ACT AND INCOME WAS DETERMINED AT RS.8 12 65 558/-. 3. FIRST GROUND OF APPEAL IS WITH REGARD TO ADDITIO N MADE U/S.145A OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS A.O. HAS ASKED THE ASSESSEE TO EXPLAIN THE METHOD OF ACCOUNTING FOLLOW ED BY HIM VIZ. CASH OR MERCANTILE SYSTEM OF ACCOUNTING AND WHETHER LIFO OR FIFO ALONGWITH METHOD OF VALUATION OF CLOSING STOCKS. HE WAS ASKE D WHETHER HE HAS MADE COMPLIANCE WITH THE PROVISIONS OF SECTION 145A OF T HE ACT. IN RESPONSE TO A.OS. INQUIRY THE ASSESSEE SUBMITTED THAT THE MET HOD OF ACCOUNTING AS FOLLOWED ON MERCANTILE BASIS AND STOCK IS VALUED ON FIFO BASIS. THE COMPONENTS OF VALUATION OF CLOSING STOCK IS COST F REIGHT LOADING AND UNLOADING CHARGES ETC. REGARDING COMPLIANCE OF SEC TION 145A OF THE ACT ASSESSEE STATED THAT HE FOLLOWS EXCLUSIVE METHOD AN D THAT NO TAXES ARE DEBITED TO P&L ACCOUNT. ASSESSEE ALSO STATED THAT FOLLOWIN G OF EXCLUSIVE METHOD WAS ACCEPTED BY HONBLE ITAT IN CASE OF ASSESSEE FOR A. Y.2007-08 & 2008-09. HE ALSO EXPLAINED THAT HONBLE SUPREME COURT HAS AL SO ACCEPTED THE EXCLUSIVE METHOD IN THE JUDGMENT OF CIT VS. SHREE R AM HONDA POWER EQUIPMENTS CIVIL APPEAL NO.6723/2012. ASSESSEE AL SO PLACED RELIANCE ON THE JUDGMENT OF HONBLE GUJARAT HIGH COURT IN CASE OF ACIT VS. NARMADA CHEMATUR PETROCHEMICALS LTD. 327 ITR 369. ASSESSEE FOLLOWS EXCLUSIVE ITA NO. 3109/AHD/13 A.Y.10-11 (DCIT VS. SHRI UDAYKU MAR C. PATEL) PAGE 3 METHOD MEANING BY WHENEVER THE EXCISE IS PAID ON PU RCHASES IT IS DEBITED TO EXCISE ACCOUNT AND WHENEVER THE SALE IS MADE THE EX CISE IS CREDITED TO THAT ACCOUNT. IF THERE IS EXCESS CREDIT THE BALANCE IS REFLECTED A RECEIVABLE IN THE BALANCE SHEET. A.O. HAS NOT ACCEPTED ASSESSEES EX PLANATION AND STATED THAT ASSESSEE HAS NOT VALUED THE CLOSING STOCK AS PER TH E PROVISIONS OF SECTION 145A OF THE ACT. SO THERE IS A DEVIATION FROM THE METHOD OF VALUATION AS PRESCRIBED U/S.145A OF THE ACT. A.O. FURTHER ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE AMOUNT OF TAXES WHICH ARE INCLUDIBLE IN VALUE OF CLOSING STOCK SHOULD NOT BE INCLUDED AS PER PROVISIONS OF SECTION 145A OF THE ACT. IN THIS CONNECTION ASSESSEE AGAIN SUBMITTED THAT EXCLUSIVE METHOD ADOPTED BY THE ASSESSEE WAS ACCEPTED BY HONBLE ITAT IN THE CASE O F ASSESSEE FOR A.YS. 2007-08 & 2008-09. THE A.O. HAS NOT ACCEPTED THE C ONTENTION OF THE ASSESSEE AND STATED THAT IT IS ADMITTED FACT THAT C LOSING STOCK HAS NOT BEEN VALUED AS PER PROVISIONS OF SECTION 145 OF THE ACT. THE A.O. OBSERVED THAT ASSESSEES CONTENTION TO THE EXTENT OF DUTIES PAID DURING THE YEAR IS ACCEPTABLE AS THE SAME HAS NOT BEEN DEBITED IN P&L ACCOUNT UND ER EXCLUSIVE METHOD. HOWEVER THE DUTIES WHICH ARE NOT PAID DURING THE Y EAR AND REMAINED OUTSTANDING AS ON 31.03.2010 AND FOR WHICH ASSESSEE WAS HAVING CLOSING/UNUTILIZED BALANCE IN THE BOOKS NEED TO BE ADJUSTED IN VALUE OF STOCKS. THE UNUTILIZED CREDIT OF TAXES VIZ. MODVAT /CENVAT IS A KIND OF SUBSIDY AND INCENTIVE GIVEN BY THE GOVERNMENT WHICH CANNOT BE TREATED AS ADVANCES GIVEN TO THE GOVERNMENT ON ACCOUNT OF SALES TAX/EXC ISE DUTY PAYABLE. IN FACT MODVAT/CENVAT RECEIVED/CLAIMED BY THE ASSESSEE ON P URCHASE OF RAW MATERIAL IS BENEFIT GIVEN BY THE GOVERNMENT. IT CAN BE SET OFF AGAINST THE LIABILITY OF ASSESSEE ON ACCOUNT OF EXCISE DUTY PAYABLE ON THE F INISHED PRODUCT MANUFACTURED BY THE ASSESSEE COMPANY. REGARDING AS SESSEES SUBMISSION THAT HONBLE ITAT HAS ACCEPTED THE EXCLUSIVE METHOD IN THE EARLIER YEAR. THE A.O. STATED THAT DEPARTMENT HAS NOT ACCEPTED TH E DECISION OF ITAT AND HEY HAVE FILED APPEAL AGAINST THE SAME. THE A.O. A LSO STATED THAT THE DECISION ITA NO. 3109/AHD/13 A.Y.10-11 (DCIT VS. SHRI UDAYKU MAR C. PATEL) PAGE 4 OF HONBLE SUPREME COURT IN CASE OF CIT VS. SHREE R AM HONDA POWER EQUIPMENTS (SUPRA) IS NOT ACCEPTABLE BECAUSE THE PR OVISION OF SECTION 145A OF THE ACT HAS BEEN BROUGHT ON THE STATUTE AFTER TH E DECISION OF SUPREME COURT. AFTER THE PROVISIONS OF SECTION 145A OF THE ACT HAVE BEEN BROUGHT ON STATUTE THE ASSESSEE IS BOUND TO VALUE ITS CLOSING STOCK INCLUSIVE OF SUCH TAXES/DUTY/CESS/FEE WHICH HAVE BEEN INCURRED BY HE ASSESSEE FOR INVENTORY AND W.E.F. 01.04.1999 ASSESSEE IS NOT ENTITLED TO VALUE THE CLOSING STOCK EXCLUSIVE OF SUCH TAXES/DUTY/CESS/FEE. IN THIS CON NECTION THE A.O. HAS KEPT RELIANCE ON THE CASE OF ACIT VS. SP FABRICATIONS (P ) LTD. REPORTED IN 10 SOT 652 ITAT MUMBAI IN CASE OF CROYDON CHEMICAL WORKS LTD. VS. ACIT 11 SOT 295 ITAT J MUMBAI BENCH IN CASE OF THE WEST COAST PAPER MILLS LTD. IN ITA NOS. 3187 & 3750/M/2003 DATED 3 RD APRIL 2006. IN VIEW OF ABOVE A.O. HAS NOT ACCEPTED THE ASSESSEES CONTENT ION AND HELD THAT THE SUM OF RS.99875/- BEING THE VALUE OF EXCISE DUTY NOT IN CLUDED IN COSTING STOCK OF RAW MATERIAL RS.39056/- BEING THE VALUE OF EXCISE DUTY NOT INCLUDED IN THE CLOSING STOCK OF FINISHED GOODS AND RS.75 19 665/- BEING THE VALUE OF VAT NOT INCLUDED IN VALUE OF CLOSING STOCK OF RAW MATER IAL TOTALING TO RS.76 58 596/- IS LIABLE TO BE INCLUDED IN THE VALU E OF CLOSING STOCK. ACCORDINGLY HE ADDED RS.76 58 596/- TO THE TOTAL I NCOME UNDER THE HEAD 145A OF THE ACT. 4. ASSESSEE HAS FILED THE APPEAL BEFORE CIT(A) AGAI NST THE ORDER OF A.O. LD. CIT(A) DELETED THE ADDITION MADE BY A.O. STATIN G THAT IDENTICAL ISSUE AROSE IN A.Y. 2007-08 & 2008-09 ITAT VIDE CONSOLID ATED ORDER DATED 28.09.2012 IN ITA NO.3304/AHD/2010 AND ITA NO.2585/ AHD/2011 PASSED THE ORDER IN FAVOR OF ASSESSEE. THE PORTION OF THE JUDGMENT DECIDED BY CIT(A) IS REPRODUCED AS UNDER: 6.2 IDENTICAL ISSUE AROSE IN THE A.YRS. 2007-08 & 2008-09 IN APPELLANTS OWN CASE. TRIBUNAL PASSED CONSOLIDATED ORDER DTD. 28/09/2012 IN ITA NO.3304/AHD/2010 AND ITA NO.2585/AHD/2011 WHEREIN IT WAS HELD: ITA NO. 3109/AHD/13 A.Y.10-11 (DCIT VS. SHRI UDAYKU MAR C. PATEL) PAGE 5 5. ON THIS ISSUE WE HAVE HEARD BOTH THE SIDES. AS FAR AS THE LEGAL ASPECT IS CONCERNED THE HON'BLE JURISDICTIONAL HIG H COURT IN THE CASE OF NARMADA CHEMATUR PETROCHEMICALS 327 ITR 369 (GUJ.) HAS HELD THAT UNLESS AND UNTIL THE AMOUNT OF THE DUTY IS NOT ENTERED ON ONE SIDE AS AN ITEM OF COST IT CANNOT BE TAKEN AS A COMPONENT OF THE VALU E OF THE CLOSING STOCK ON THE EITHER SIDE. THE TRUE PURPOSE OF CREDITING THE VALUE OF UNSOLD STOCK IS TO BALANCE TO COST OF THOSE GOODS ENTERED INTO OTHER S IDE OF ACCOUNT. THERE IS AN ANOTHER DECISION OF AN HON'BLE GUJARAT HIGH COURT P RONOUNCED IN THE CASE OF CIT VS. UNIQUE INDUSTRIES 307 ITR 350 (GUJ.) WH EREIN IT WAS HELD THAT THE EXCISE DUTY SALES TAX AND OTHER DUTIES FORM PA RT OF THE CLOSING STOCK WHEN THE SAME ARE INCURRED. IN THAT CASE IT WAS NO TED THAT THE ASSESSEE HAD NOT DEBITED ANY EXCISE DUTY OR SALES-TAX TO THE PUR CHASE ACCOUNT OR P&L ACCOUNT. THE COURT HAS HELD THAT THE QUESTION OF IN CLUDING THE EXCISE DUTY IN THE VALUE OF STOCK ARISES ONLY IF THE PURCHASES DEB ITED TO P&L ACCOUNT ARE INCLUSIVE OF EXCISE DUTY. RATHER THE COURT HAS CLA RIFIED THAT THE EXPENDITURE INCURRED ON EXCISE DUTY BUT IF PURCHASES DEBITED AR E EXCLUSIVE OF EXCISE DUTY THEN THE QUESTION OF INCLUDING THE SAME IN THE CLOS ING STOCK ACCOUNT DOES NOT ARISE SINCE THE ASSESSEE HAS NOT INCURRED ANY EXPEN DITURE BY DEBITING TO P&L ACCOUNT. LD.AR HAS CITED THE CASE OF CIT VS. IN DO NIPPON CHEMICALS LTD. 261 ITR 275 (SC). HOWEVER WE HAVE NOTED THAT THE ISSUE BEFORE THE HON'BLE SUPREME COURT WAS SLIGHTLY DIFFERENT THAN T HE ISSUE IN HAND BECAUSE IN THAT CASE THE AO HAD ADOPTED DIFFERENT METHODS O F VALUATION OF EXCISE DUTY PAID WHEN RAW-MATERIAL WAS PURCHASED AND AT TH E TIME VALUING THE UNCONSUMED RAW-MATERIAL IN THE HANDS OF THE ASSESSE E AT THE END OF THE YEAR. THE HON'BLE COURT HAS THUS HELD THAT THE AO WAS NOT JUSTIFIED IN ADOPTING THE 'GROSS METHOD' AT THE TIME OF PURCHASES AND THE 'NET METHOD' OF VALUATION AT THE TIME OF VALUATION OF STOCK ON HAND . HOWEVER THE BASIC QUESTION WHICH IS YET TO BE ASCERTAINED IS THAT WHE THER THE ASSESSEE HAS ADOPTED 'EXCLUSIVE METHOD' OR THE 'INCLUSIVE METHOD '. WHILE ARGUING BEFORE US ID.AR HAS IN SUBTLE MANNER EXPRESSED THAT ONLY FOR THE PURPOSE OF VERIFICATION OF THIS FACT THE MATTER CAN GO BACK TO THE AO BUT ONLY AFTER ASCERTAINING THE CORRECT POSITION OF LAW. AS FAR AS THE LEGAL ASPECT OF THIS ISSUE IS CONCERNED WE HAVE ALREADY DISCUSSED FEW C ASE LAWS HEREINABOVE AND THEREFORE IT IS EXPECTED FROM THE AO TO FOLLO W THE SAME ONLY AFTER ASCERTAINING THE METHOD OF ACCOUNTING ADOPTED BY TH E ASSESSEE IN RESPECT OF THE DUTIES IN QUESTION. WITH THESE DIRECTIONS WE H EREBY RESTORE THIS GROUND FOR A FRESH ADJUDICATION AS DIRECTED HENCE TO BE T REATED AS ALLOWED BUT FOR STATISTICAL PURPOSES. 6.3 AO IS DIRECTED TO FOLLOW THE DIRECTIONS OF THE TRIBUNAL FOR THE YEAR UNDER CONSIDERATION AND MODIFY THE ORDER ACCORDINGL Y. THIS GROUND OF APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOS ES. 5. DURING PROCEEDINGS BEFORE US LD. D.R. RELIED O N THE ORDER OF A.O. ON THE OTHER HAND LD. A.R. SUPPORTED THE ORDER OF CIT (A) AND ALSO PRODUCED THE ITA NO. 3109/AHD/13 A.Y.10-11 (DCIT VS. SHRI UDAYKU MAR C. PATEL) PAGE 6 COPY OF ITAT AHMEDABAD CO-ORDINATE BENCH DECISION ON THE IDENTICAL ISSUE IN FAVOUR OF ASSESSEE VIDE ITA NO.535/AHD/2013 FOR A.Y.2009-10. IN THIS ORDER THE HONBLE ITAT HAS STATED THAT THE HONBLE JURISDICTIONAL HIGH COURT IN CASE OF NARMADA CHEMATUR PETROCHEMICALS LT D. (2010) 377 ITR 369 HAS HELD THAT UNLESS AND UNTIL THE AMOUNT OF THE DU TY IS NOT ENTERED ON ONE SIDE AS AN ITEM OF COST IT CANNOT BE TAKEN AS A CO MPONENT OF THE VALUE OF THE CLOSING STOCK ON THE OTHER SIDE. 6. AFTER HEARING BOTH SIDES AND PERUSED THE MATERIA L ON RECORD WE FIND THAT HONBLE ITAT AHMEDABAD CO-ORDINATE BENCH FOR A.Y.2009-10 AND ALSO IN RESPECT OF EARLIER YEAR I.E. A.Y.2007-08 HA VE DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE BY KEEPING RELIANCE ON THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT RENDERED IN THE CASE OF A CIT VS. NARMADA CHEMATUR PETROCHEMICALS LTD. (2010) 327 ITR 369 (GU J.) IN VIEW OF ABOVE FACTS AND LEGAL FINDINGS WE CONSIDER THAT LD. CIT( A) HAS CORRECTLY DELETED THE ADDITION IN FAVOUR OF ASSESSEE. REVENUES APPEAL O N THIS ISSUE IS REJECTED. 7. SECOND GROUND OF APPEAL IS WITH REGARD TO DISALL OWANCE OF EXCESS CLAIM OF DEPRECIATION ON VEHICLE. DURING COURSE OF ASSESSMENT PROCEEDINGS A.O. HAS DISCUSSED THAT ASSESSEE HAS CLAIMED DEPREC IATION @50% ON CERTAIN VEHICLES ACQUIRED BY HIM CLAIMING AS COMMERCIAL VEH ICLE. THE A.O. NOTED THAT THIS VEHICLE WAS NOT REGISTERED BY RTO AS COMM ERCIAL VEHICLE SO ASSESSEE WAS REQUESTED TO JUSTIFY THE HIGHER CLAIM OF DEPRECIATION @50%. IN THIS CONNECTION ASSESSEE EXPLAINED THAT THERE ARE THREE VEHICLES CONSISTING OF TWO CARS AND ONE LOADING RICKSHAW PURCHASED AND PUT TO USE BEFORE 30.09.2009 ON WHICH HIGHER RATE OF DEPRECIATION WAS CLAIMED. A.O. HAS NOT ACCEPTED THE ASSESSEES CONTENTION AND STATED THAT COMMERCIAL VEHICLES ARE DISTINCT AND DIFFERENT FROM PRIVATE VEHICLE. FROM THE PROVISIONS OF SECTION 32 OF THE ACT READ WITH APPENDIX-I OF INCOME TAX RULES IT CAN BE SEEN THAT THE HIGHER RATE OF DEPRECATION IS ALLOWABLE ON THE NEW COMMERCIAL VEHICLE. THE ITA NO. 3109/AHD/13 A.Y.10-11 (DCIT VS. SHRI UDAYKU MAR C. PATEL) PAGE 7 REQUIREMENT FOR REGISTRATION FOR COMMERCIAL VEHICLE IS DIFFERENT FROM PRIVATE VEHICLE AND THE RATE/FEES FOR REGISTRATION WITH RTO FOR COMMERCIAL VEHICLE ARE ALSO DIFFERENT AS COMPARED TO PRIVATE VEHICLE. EV EN THE NUMBER PLATES WHICH ARE USED TO COMMERCIAL VEHICLE ARE DIFFERENT AS COM PARED TO PRIVATE VEHICLE. A.O. ON THE BASIS OF THESE DISTINCTIONS HELD THAT A SSESSEES CLAIM OF DEPRECIATION ON VEHICLE @50% IS RESTRICTED AND HELD THAT THE VEHICLE IS ALLOWED FOR DEPRECIATION @15% AND ADDITION OF RS.14 99 664/- BY DISALLOWING OF DEPRECIATION ON VEHICLE. 8. ASSESSEE HAS FILED THE APPEAL BEFORE THE CIT(A) AGAINST THE ORDER OF A.O. LD. CIT(A) HAS DELETED THE ADDITION MADE BY A.O. AFTER MAKING RELIANCE ON THE ORDER OF ITAT AHMEDABAD IN CASE OF ACIT VS. M/S. VOLTAMP TRANSFORMERS LTD. IN ITA NO.1676/AHD/2012 BY OBSERV ING AS UNDER: 11. ON HEARING BOTH THE SIDES WE ARE OF THE CONSI DERED VIEW THAT LD CIT(A) HAS RIGHTLY INTERPRETED THE RELEVANT PROVISI ONS OF MOTOR VEHICLE ACT WHEREIN THE WORD COMMERCIAL VEHICLE HAS BEEN DEFI NED. ONCE THE RELEVANT ACT HAS GIVEN A SPECIFICATION IN RESPECT O F A PARTICULAR TYPE OF VEHICLE THEN THERE IS NO SCOPE LEFT TO INTERPRET T HE COMMERCIAL VEHICLE AS PER COMMON PARLANCE OR COMMON UNDERSTANDING. THE FINDI NG IN THIS REGARD OF LD. CIT(A) IS HEREBY CONFIRMED. THIS GROUND OF THE REVENUE IS DISMISSED. FOLLOWING THE ABOVE-MENTIONED ORDER IMPUGNED DISAL LOWANCE IS DELETED. THIS GROUND OF APPEAL IS ALLOWED. 9. DURING COURSE OF PROCEEDINGS BEFORE US LD. D.R. RELIED ON THE ORDER OF A.O. ON THE OTHER HAND LD. A.R. RELIED ON THE ORD ER OF CIT(A) AND FURNISHED THE COPY OF ITAT AHMEDABAD CO-ORDINATE BENCH IN AS SESSEES OWN CASE FOR A.Y.2009-10 WHEREIN ITAT HAS DECIDED THE ISSUE IN FAVOUR OF ASSESSEE BY CONFIRMING CIT(A)S ORDER OF THAT YEAR BY OBSERVING AS UNDER: 10.1. THE ASSESSEE HAS CLAIMED EXCESS DEPRECIATION OF RS.3 69 604/- ON THE NEW COMMERCIAL VEHICLE PURCHASED. THE AOS OBJECTION WA S THAT THOSE VEHICLES WERE NOT REGISTERED BY THE RTO COMMERCIAL VEHICLE THE REFORE THE ASSESSEE WAS NOT ENTITLED FOR ADDITIONAL DEPRECIATION CLAIMED @ 50% ON THOSE VEHICLES ACQUIRED DURING THE YEAR. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY ITA NO. 3109/AHD/13 A.Y.10-11 (DCIT VS. SHRI UDAYKU MAR C. PATEL) PAGE 8 LD. CIT(A) HAS EXAMINED THE PROVISIONS OF MOTOR VEH ICLE ACT AND ALLOWED THE CLAIM AS FOLLOWS:- 5.3. DECISION: I HAVE CAREFULLY PERUSED THE ASSESSMENT ORDER AND T HE SUBMISSIONS GIVEN BY THE APPELLANT. THE A.O. HAS DISALLOWED THE CLAIM OF DEPRECIATION AT HIGHER RATE AS IT HAS BEEN HELD BY HIM THAT THE VEHICLE WA S NOT A COMMERCIAL VEHICLE. THE A.O. HAS TAKEN THE MEANING OF COMMERCI AL VEHICLE IN COMMON PARLANCE AND HAS HELD THAT COMMERCIAL VEHICLE IS DI STINCT AND DIFFERENT FROM PRIVATE VEHICLE AND THE VEHICLE USED BY THE APPELLA NT IS A PRIVATE VEHICLE. THE APPELLANT HAS SUBMITTED THAT AS PER NOTE NO. 6 TO T HE RULES IN APPENDIX-I THE WORD COMMERCIAL VEHICLE HAS BEEN DEFINED TO INC LUDE LIGHT MOTOR VEHICLE AS DEFINED BY MOTOR VEHICLE ACT 1988. FURT HER SECTION 2(21) OF THE MOTOR VEHICLE ACT DEFINE THE WORD LIGHT MOTOR VEHIC LE AS LIGHT MOTOR VEHICLE MEANS TRANSPORT VEHICLE OR AMN IBUS. THE GROSS VEHICLE WEIGHT OF EITHER OF WHICH OR A MOTOR CAR OR A TRACTOR OR ROAD ROLLER THE UNLADEN WEIGHT OF ANY OF WHICH DOES NO T EXCEED 7500 KG. THE APPELLANT HAS FURTHER SUBMITTED THAT AS PER THE RC BOOK THE VEHICLE IS LMV AND THE WEIGHT OF THE CAR IS 2074 KG . AND THE UNLADEN WEIGHT IS 1454 KG. WHICH WAS LESS THAN 7500KG. THE REFORE THE APPELLANT HAS CLAIMED THAT THE CAR PURCHASED WAS A COMMERCIAL VEHICLE AND APPELLANT WAS ENTITLED TO DEPRECIATION AT HIGHER RATE. AFTER CONSIDERING THE SUBMISSION OF THE APPELLANT A ND THE FACTS I AM INCLINED TO ACCEPT THE SUBMISSION MADE BY THE APPEL LANT. THE CLAUSE VI-A OF THE APPENDIX I.E. THE TABLE OF RATES OF WHI CH DEPRECIATION IS ADMISSIBLE PRESCRIBES THE DEPRECIATION @ 50% FOR NE W COMMERCIAL VEHICLE WHICH IS ACQUIRED ON OR AFTER 01/01/2009 BU T BEFORE 01/04/2009 AND IS PUT TO USE BEFORE 01/04/2009 FOR THE PURPOSE OF BUSINESS OR PROFESSION. FURTHER PARAGRAPH 6 OF THE NOTE BELOW THE TABLE DEFINES COMMERCIAL VEHICLES WHICH INCLUDES LI GHT MOTOR VEHICLES AS PER THE MOTOR VEHICLE ACTS THE SPECIFI CATIONS FOR WHICH ARE REPRODUCED IN THE PRECEDING PARAGRAPH. THEREFOR E IT IS CLEAR THAT THE APPELLANT IS ENTITLED FOR DEPRECIATION @ 50% WH ICH WAS GIVEN AS AN INCENTIVE FOR A SHORT PERIOD BETWEEN 01/01/2009 TO 01/04/2009 BUT THE PERIOD WAS LATER ON EXTENDED UPTO 01/10/200 9. THE VEHICLE PURCHASED BY THE APPELLANT FULFILLS ALL THE CONDITI ONS PRESCRIBED IN THE INCOME TAX ACT AND THE RELATED MOTOR VEHICLE ACT AN D FALLS WITHIN THE DEFINITION OF COMMERCIAL VEHICLE. THE ACT HAS N OWHERE PRESCRIBED THAT A COMMERCIAL VEHICLE SHOULD BE A VE HICLE WHICH IS USED FOR THE PURPOSE OF HIRE. IT ONLY PRESCRIBES TH AT THE VEHICLE SHOULD BE USED FOR THE PURPOSE OF BUSINESS OR PROFESSION. THE APPELLANT IS THEREFORE ENTITLED FOR THE DEPRECIATION @50%. THE GROUND OF APPEAL IS ACCORDINGLY ALLOWED. ITA NO. 3109/AHD/13 A.Y.10-11 (DCIT VS. SHRI UDAYKU MAR C. PATEL) PAGE 9 11. ON HEARING BOTH THE SIDES WE ARE OF THE CONSID ERED VIEW THAT LD.CIT(A) HAS RIGHTLY INTERPRETED THE RELEVANT PROVISIONS OF MOTOR VEHICLE ACT WHEREIN THE WORD COMMERCIAL VEHICLE HAS BEEN DEFINED. ONC E THE RELEVANT ACT HAS GIVEN A SPECIFICATION IN RESPECT OF A PARTICULA R TYPE OF VEHICLE THEN THERE IS NO SCOPE LEFT TO INTERPRET THE COMMERCIAL VEHICL E AS PER COMMON PARLANCE OR COMMON UNDERSTANDING. THE FINDING IN THIS REGARD OF LD.CIT(A) IS HEREBY CONFIRMED. THIS GROUND OF THE REVENUE IS DISMISSED. 10. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MA TERIAL ON RECORD. WE FIND THAT IN VIEW OF ABOVE STATED FACTS AND LEGAL F INDINGS THE LD. CIT(A) HAS CORRECTLY DECIDED THE ISSUE IN FAVOUR OF ASSESSEE B Y MAKING RELIANCE ON THE ORDER OF ITAT AHMEDABAD IN CASE OF ACIT VS. M/S. V OLTAMP TRANSFORMERS LTD.(SUPRA). 11. IN THE RESULT THE APPEAL FILED BY REVENUE IS D ISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 29 .09 .2016 SD/- SD/- ( RAJPAL YADAV) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 29 /09/2016 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. ! '# $ / CONCERNED CIT 4. $ - / CIT (A) 5. %&' (('# '# ! / DR ITAT AHMEDABAD 6. '+ / GUARD FILE. BY ORDER/ / '# !