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Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD
Before: SHRI AMARJIT SINGH
आदेश/O R D E R
PER AMARJIT SINGH - AM: The appeal has been filed by the assessee for A.Y. 2012-13, arise from order of the DCIT, Circle-4(1)(1), Ahmedabad dated 31-12-2015, in proceedings under section 143(3) r.w.s. 144C (1) of the Income Tax Act, 1961; in short “the Act”.
This appeal of the assessee is directed against the order of the AO made u/s. 144C(1) of the Act. In making disallowance of depreciation of Rs. 45,419/- and also making addition of Rs. 37,83,062/- in respect of MODVAT by invoking present of sec. 145A on the basis of direction of the Dispute Resolution Panel
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(DRP). The brief fact is that assessee has claimed depreciation on computer software @ 60 per cent. However, the AO has restricted the claim of depreciation @ 26 percentage as applicable in tangible assets on the ground that the software on which the depreciation was claimed was application software which fall within the ambit of intangible assets. Regarding second issue the AO has noticed that assessee was following exclusive method of accounting and made addition of Rs. 37,83,062/- u/s. 145A in respect of unutilised CENVAT credit on the ground that it must be added to the closing stock of raw material.
At the time appellate proceedings before us it was brought to our notice by the Ld. Counsel that both the issue contested in the question appeal had been adjudicated by the Coordinate Bench of the ITAT vide ITA No. 1883/Ahd/2013 in the case of the assessee itself for assessment year 2009-10 in favour of the assessee.
The Ld. AR was fair enough to could not contradict this material fact. With the assistance of the Ld. Representatives we have gone through the aforesaid cited order of the Coordinate Bench of the ITAT and notice that both the issue in the present appeal have been adjudicated earlier by the ITAT in favour of the assessee. The relevant part of the decision of the ITAT vide aforesaid order is reproduced as under:-
The first issue is:-
“5. We have heard rival contentions and perused the material on record. It is noticed that as per rule 5 of income tax rules 1962 depreciation allowance u/s. 32 of the income tax act shall be calculated at the percentage specified in the second column of the table in Appendix 1 effective from assessment year 2006-07 on wards depreciation is to be calculated @ prescribed in new appendix-1 entry at serial no. 5 of part-III (which deals with rate depreciation on machinery and plant) of the said table referred to computer, including computer software and the rate of depreciation prescribed in the said table against this entry is 60% . As per note 7 below the said table “computer software” means any computer program recorded in any disc, tape, perforated media other information storage device. In the light of the above provision of income tax, we observed that income tax act does not make any difference between the system software and application software, therefore, we justify the decision of ld. CIT(A) in allowing the claim of the assessee of
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depreciation @ 60% on the computer software. Accordingly this ground of revenue is dismissed.” The second issue is:- “7. We have heard the rival contentions and perused the material on record carefully. In this connection, we have noticed that assessee was following similar method in the preceding years and there were notes in the audit report that if the adjustment on account of section 145A was made, there would be no effect on the income. It is noticed that the assessee is following exclusive method of accounting for last many years and all purchases and sales of goods are accounted net of MODVAT including inventory i.e. opening stock and closing stock. On this issue the Hon'ble ITAT Bench of Ahmedabad in the case of Alpanil Industries V. ACIT in ITA No. 169/AHD/2005 and 170/AHD/2005 for A.Y. 1999-2000 & 2000-2001 has discussed the principle related to valuation of closing stock U/S.145A of the Act. 8. We have heard rival contentions and perused the material on record carefully. After considering the finding of the ld. CIT(A) along with judicial finding, we consider that there will be no effect in the taxable profit of the assessee by including the amount of excise duty paid on purchase in the valuation of closing stock of raw material since the assessee was following excusive method of accounting as elaborated in the findings of the Ld.CIT(A), therefore, we do not find any reason to interfere in the decision of ld. CIT(A). Accordingly the appeal of the revenue is dismissed.”
Respectfully following the findings of the Coordinate Bench as reproduced above on the same facts and identical issue in the case of the assessee itself we are not inclined with the decision of the Ld. CIT(A). Therefore, appeal of the assessee on both the issue is allowed.
In the result, appeal of the assessee is allowed.
This Order pronounced in Open Court on 25/03/2019
Sd/- Sd/- (MADHUMITA ROY) (AMARJIT SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad: Dated 25/03/2019 Tanmay True Copy आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. राज�व / Revenue 2. आवेदक / Assessee 3. संबं�धत आयकर आयु�त / Concerned CIT
ITA NO. 80/AHD/2017 A.Y. 2012-13 4
आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाइल / Guard file.
By order/आदेश से,
उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद ।
1.Date of dictation on 20.03.2019 2.Date on which the typed draft is placed before the Dictating Member 25.03.2019 3.Date on which the approved draft comes to the Sr.P.S./P.S. 25.03.2019 4.Date on which the fair order is placed before the Dictating Member for pronouncement 25.03.2019 5.Date on which the fair order comes back to the Sr.P.S./P.S 25.03.2019 6.Date on which the file goes to the Bench Clerk 25.03.2019 7.Date on which the file goes to the Head Clerk…………. 8.The date on which the file goes to the Asstt. Registrar for signature on the order…………………… 9.Date of Despatch of the Order………