PR. COMMISSIONER OF INCOME TAX II LUDHIANA vs. M/S HAPPY FORGINS LTD

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ITA/198/2015HC Punjab & HaryanaPHHC01109827201507 August 2015Author: MR. JUSTICE M.M. AGGARWAL,MR. JUSTICE A.B. CHAUDHARI2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no question of law arises from the ITAT's order. The Tribunal found that the machinery had been installed and put to use on 29.03.2008. The Court noted that the AO had considered the assessee's detailed explanation regarding acquisition, installation, and use, and had raised queries which were answered. The Court found no reason to presume that the AO did not discharge his functions properly. Therefore, the High Court found no reason to interfere with the ITAT's order on merits. The appeal was dismissed.

What were the facts?

The appeal concerns assessment year 2008-2009. The assessee, M/s Happy Forgings Ltd., claimed depreciation at 80% on plant and machinery. The Assessing Officer (AO) disallowed a portion of this claim, allowing depreciation at 15% and adding back excess depreciation of Rs. 4,04,144/- to the assessee's income. The CIT (Appeals) passed an order in revision under Section 263 of the Income Tax Act, 1961. The Income Tax Appellate Tribunal (ITAT) set aside the CIT (Appeals)'s order. The present appeal is filed by the Pr. Commissioner of Income Tax-II, Ludhiana (Revenue) against the ITAT's order.

What were the issues?

1. Whether a question of law arises from the ITAT's order setting aside the CIT (Appeals)'s revisionary order, concerning the assessee's claim for depreciation at 80% on plant and machinery for assessment year 2008-2009. Assessee's contentions: Not explicitly recorded in the judgment. Revenue's contentions: The Revenue argued that the AO had raised queries regarding the plant and machinery, which were answered by the assessee. The AO disallowed depreciation at 80% and allowed it at 15%, disallowing an excess of Rs. 4,04,144/-. The Revenue implicitly contended that the AO's action was justified and the ITAT erred in setting aside the CIT (Appeals)'s order.

Which sections of the Income-tax Act were involved?

Section 263

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

ITA-198-2015 (O&M) Date of decision:- 07.08.2015

The Pr. Commissioner of Income Tax-II, Ludhiana ...Appellant Versus

M/s Happy Forgings Ltd. ...Respondent

CORAM: HON'BLE MR. JUSTICE S.J. VAZIFDAR, ACTING CHIEF JUSTICE

HON’BLE MR. JUSTICE G.S. SANDHAWALIA

Present: Ms. Savita Saxena, Advocate,

for the appellant. * * * * S.J. VAZIFDAR, A.C.J. (ORAL)

This is an appeal against the order of the Income Tax Appellate Tribunal dated 17.10.2014 setting aside the order of the CIT (Appeals) passed in revision under Section 263 of the Income Tax Act, 1961. The matter pertains to the assessment year 2008-2009. 2. The respondent/assessee had claimed depreciation at 80%. The Assessing Officer raised various queries regarding the plant and machinery which were answered by the assessee. The assessee was called upon to justify the claim of depreciation at 80%. In respect of part of the plant and machinery, the Assessing Officer rejected the claim altogether. Ultimately, the Assessing Officer disallowed the depreciation claimed by the assessee at 80% and allowed the depreciation at 15%. Accordingly, the excess depreciation claimed by the assessee to the tune of ` 4,04,144/- was disallowed and added back to the income of the assessee. The benefit of depreciation, therefore, was only about ` 36,000/-. On this ground itself the appeal ought to be dismissed. AMODH SHARMA 2015.08.10 12:31 I attest to the accuracy and authenticity of this document chandigarh

ITA-198-2015 (O&M)

2ٰ

3.

Thus, on merits, we do not see any reason to interfere with the order of the Tribunal. The question was whether the plant and machinery in respect whereof depreciation was claimed had been installed on the date from which the depreciation has been claimed. The Tribunal found that the machinery had been installed and was put to use on 29.03.2008. As the Tribunal rightly observed, the Assessing Officer had also considered the explanation of the assessee in regard to the acquisition, installation and use of the plant and machinery in detail. In this regard, the Assessing Officer raised various queries which were answered. There is no reason to presume that the Assessing Officer did not discharge his functions properly.

4.

In these circumstances, no question of law arises.

5.

The appeal is accordingly dismissed.

(S.J. VAZIFDAR) ACTING CHIEF JUSTICE

(G.S. SANDHAWALIA)

JUDGE 07.08.2015 Amodh AMODH SHARMA 2015.08.10 12:31 I attest to the accuracy and authenticity of this document chandigarh

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