DOZCO INFRATECH PVT. LTD.,KOLKATA vs. D.C.I.T., CIRCLE - 1(1), KOLKATA, KOLKATA

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ITA 694/KOL/2022Status: DisposedITAT Kolkata15 March 2023AY 2011-20124 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the rate of depreciation on excavators and bulldozers is 30% as per the Act. The issue was also covered by a co-ordinate bench's decision in the assessee's own case for an earlier year.

What were the facts?

The assessee claimed 30% depreciation on excavators and bulldozers, but the AO allowed only 15%, resulting in a disallowance. This disallowance was confirmed by the CIT(A) after a revisionary order by the PCIT.

What were the issues?

The primary issue was the correct rate of depreciation applicable to excavators and bulldozers. The secondary issue involved whether the PCIT's revisionary order under Section 263 was justified.

Which sections of the Income-tax Act were involved?

Section 263

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH: KOLKATA

Before: Shri Rajpal Yadav, Vice-(KZ) & Shri Rajesh Kumar]

Heard together (2 matters)

I.T.A. No. 694/Kol/2022
ITA NO. 1438/Kol/2018

Read from the judgment's own cause title. This page is filed under one of them.

This is an appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeal)-NFAC, Delhi (hereinafter referred to as the Ld. CIT(A)”] dated 25.11.2022 for the AY 2011-12.

2.

The only issue raised by the assessee is against the order of Ld. CIT(A) upholding the order passed by the AO wherein the AO has made disallowance of depreciation by applying the rate of depreciation @ 15% on excavator, bulldozer etc.

3.

At the outset, the Ld. Counsel for the assessee submitted that the issue is squarely covered in favour of the assessee by the decision of the Co-ordinate Bench in assessee’s own case in the earlier year namely DCIT vs. M/s Dozco Infratech Pvt. Ltd. in for AY 2010-11 dated 21.10.2020 wherein the Co- ordinate Bench has allowed the depreciation on bulldozer, excavator @ 30%. The Ld. Counsel therefore prayed that in the present appeal may kindly be allowed by setting aside the order of Ld. CIT(A) and directing the AO to allow the depreciation @30% by following the decision of the Tribunal in the earlier year.

4.

Facts in brief are that the assessment in this case was framed originally u/s 143(3) of the Act dated 19.03.2014 accepting and allowing depreciation @ 30% on bulldozer, excavator etc. The assessee is engaged in the business of leasing out of plant and machinery. The excavators and bulldozers were capitalized under the head plant and machinery and depreciation @ 30% was claimed.

5.

The Ld. PCIT upon perusal of the said order came to the conclusion that the order passed by the AO is erroneous and prejudicial to the interest of the revenue for the reason excavators and bulldozers were allowed depreciation @30% and thus revised the order on 28.12.2016 passed u/s 263 of the Act. Thereafter in the set aside assessment proceedings, the AO disallowed excess depreciation of Rs. 2,84,93,532/- by applying @15% of the present block of plant and machinery consisting bulldozers and excavators. The assessee has challenged the said order before the Ld. CIT(A). It is pertinent to note that the assessee has not challenged the revisionary order passed by the Ld. PCIT u/s 263 of the Act.

6.

After hearing the rival contentions and perusing the material on record, after consulting the provisions of the Act qua rate of deprecation , we observe that the rate of depreciation as admissible under the Act in respect of excavator, bulldozer is 3 Assessment Year: 2011-12 Dozco Infratech Pvt. Ltd. provided @ 30%. Moreover the issue has been decided by the Co-ordinate Bench in the earlier year in assessee’s own case in ITA No. 1438/Kol/2018 (supra) wherein rate of depreciation has been allowed @ 30%. The relevant portion of the said order is extracted below:

“5.We find no merit in the Revenue’s sole substantive grievance. It has come on record that the CIT(A) has gone by the hon’ble jurisdictional high court’s decision (supra) to hold that all the above stated three categories of the corresponding plant and machinery items i.e. excavators, bull dozers and wheel loaders carry depreciation relief of @ 30% than @ 15% canvassed at the Revenue’s behest. Learned authorized representative further pin-pointed the fact that this tribunal’s decision in Bothra Shipping Services (supra) had also followed CIT vs. Gaylord Construction 190 Taxmann.com 406 (Kerala) & Gujco Carriers vs. CIT 250 ITR 50 (Guj) deciding the similar issue against the department. We hold in this factual backdrop that the CIT(A)’s lower appellate discussion granting higher rate of depreciation @ 30% in case of foregoing three categories of machinery thereby treating them akin to “Motor Lorries” under the Motor Vehicles Act & Rules; are liable to be affirmed. We order accordingly.” Considering the facts of case being fully covered by the decision of the Co-ordinate Bench, we are inclined to quash the order of Ld. PCIT as the assessment framed is neither erroneous nor prejudicial to the interest of the revenue.

7.

In the result, the appeal of the assessee is allowed.

Order is pronounced in the open court on 15th March, 2023

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