M/S. KRISHNA ISPAT,SIHOR vs. THE ITO, WARD-2(4), BHAVNAGAR

This appeal has been preferred by the assessee against the order of the Ld. Commissioner of income tax (Appeals) – 6 , Ahmedabad {CIT (Appeals)} for assessment year 2014–15 wherein, vide the impugned order dated 31st of August 2017, the Ld. first appellate authority has upheld the disallowance of depreciation on moulds.

ITA 2361/AHD/2017 AY: 2014-15 2.0 The brief facts of the case are that the assessee had claimed depreciation on iron moulds at the rate of 80%. It was the opinion of the assessing officer that the allowable rate of depreciation was 15%. The assessing officer proceeded to make a disallowance of the excess depreciation to the tune of Rs. 81,153/-. The assessee’s appeal before the Ld. first appellate authority was also dismissed inasmuch as the Ld. CIT (Appeals) followed the order of his predecessor in assessment year 2012 – 13 wherein the excess depreciation on moulds on identical grounds had been upheld.

2.1 Now, the assessee is before this Tribunal and has challenged the confirmation of disallowance of depreciation by the Ld. first appellate authority.

3.0 At the outset, the Ld. authorised representative submitted that now the issue stood covered in favour of the assessee by the order of the Tribunal in assessee’s own case for the immediately preceding assessment year i.e. 2012 – 13. The Ld. authorised representative placed copy of order dated 20/02/2019 in before the bench and submitted that the co-ordinate bench of the Tribunal had noted ITA 2361/AHD/2017 AY: 2014-15 that since iron moulds have shorter span of life, depreciation at the rate of 80% was allowable.

4.0 In response, the Ld. senior departmental representative supported the orders of the lower authorities. The Ld. senior departmental representative, however, fairly accepted that the Tribunal, in the immediately preceding year, in assessee’s own case, had allowed an identical issue in assessee’s favour.

5.0 We have heard the rival submissions and have also perused the material on record. We have also perused the order of the coordinate bench of the Tribunal in assessee’s own case for assessment year 2012 – 13 in wherein, vide order dated 20/02/2019, the Tribunal has accepted the assessee’s claim for depreciation on iron moulds at the rate of 80%. In the above said order, the coordinate bench of the Tribunal has duly taken note of the judgement of the Hon’ble Punjab and Haryana High Court in CIT versus Malerkotla Steels and Alloys (Private) Limited reported in 10 Taxmann.com 278 and also of the judgment of the Hon’ble Madras High Court in the case of CIT versus Aditya Ferro Alloys (Private) Limited and has thereafter allowed the assessee’s claim of depreciation at the rate ITA 2361/AHD/2017 AY: 2014-15 of 80% in the case of cast iron moulds. The Department could not bring to our notice any judgement to the contrary in this regard.

Therefore, respectfully following the order of the coordinate bench in assessee’s own case for immediately preceding assessment year as aforesaid we set aside the order of the Ld. CIT (Appeals) and direct the assessing officer to allow depreciation on iron moulds at the rate of 80%.

6.0 In the final result appeal of the assessee stands allowed.

Order pronounced in the open court on 01.10.2019