Pr. Commissioner Of Income Tax(Central) vs. M/S D.P. Power

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ITA/107/2016HC Madhya Pradesh24 October 2017Bench: HON'BLE SHRI JUSTICE S.C.SHARMA8 pages
For Petitioner: Veena Mandlik
AI SummaryDismissed

What did the High Court hold?

The High Court held that both questions raised in the appeal were purely questions of fact. The Tribunal, as the final authority on facts, had analyzed the relevant documents and facts. The first appellate authority had also decided the issue in favour of the assessee, resulting in concurrent findings of fact. Therefore, the Court was of the considered opinion that the questions raised were not questions of law. Consequently, the appeals filed by the Revenue deserved to be dismissed. The operative direction was the dismissal of the appeals.

What were the facts?

The appeals were filed by the Principal Commissioner of Income Tax (Central) against orders of the Income Tax Appellate Tribunal (ITAT), Bench Indore. The ITAT had dismissed the department's appeals, thereby deleting additions made by the Assessing Officer. These additions related to depreciation claimed by the assessee on Wind Mills for assessment years 2006-2007, 2008-2009, and 2009-2010, totaling Rs. 13,28,400, Rs. 3,20,53,136, and Rs. 64,10,627 respectively. The Assessing Officer had disallowed the depreciation on the grounds that the assessee was not the owner of the Wind Mills, and M/s. Enercon India Ltd. was the actual owner and user. The Commissioner (Appeals) had decided in favour of the assessee, a decision upheld by the ITAT.

What were the issues?

1. Whether on the facts and in the circumstances of the case, the ITAT was legally correct in allowing depreciation on assets not actually in the possession of the assessee? (Question of law/mixed fact and law, turning on Section 32 of the Income Tax Act, 1961). 2. Whether the order of the Tribunal ignores and does not deal with the factual findings recorded by the Assessing Officer and is, therefore, perverse? (Question of fact). Assessee's contentions: Not recorded in the judgment. Revenue's contentions: Not recorded in the judgment, other than the grounds of appeal which are framed as the questions of law.

Which sections of the Income-tax Act were involved?

Section 32,Section 132

AI-generated summary — verify with the full judgment below

--- 1 --- HIGH COURT OF MADHYA PRADESH : BENCH AT INDORE D.B.: HON'BLE MR. S. C. SHARMA AND HON'BLE MR. ALOK VERMA, JJ INCOME TAX APPEAL No. 78 / 2016 PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) Vs. M/S. RATLAM WIRES PVT. LTD., INCOME TAX APPEAL No. 79 / 2016 PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) Vs. M/S. RATLAM WIRES PVT. LTD., INCOME TAX APPEAL No. 80 / 2016 PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) Vs. M/S. RATLAM WIRES PVT. LTD., INCOME TAX APPEAL No. 81 / 2016 PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) Vs. M/S. RATLAM WIRES PVT. LTD., INCOME TAX APPEAL No. 85 / 2016 PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) Vs. M/S. RATLAM WIRES PVT. LTD., INCOME TAX APPEAL No. 86 / 2016 PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) Vs. M/S. RATLAM WIRES PVT. LTD., --- 2 --- INCOME TAX APPEAL No. 88 / 2016 PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) Vs. M/S. KATARIA WIRES PVT. LTD., INCOME TAX APPEAL No. 89 / 2016 PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) Vs. M/S. KATARIA WIRES PVT. LTD., INCOME TAX APPEAL No. 90 / 2016 PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) Vs. M/S. KATARIA WIRES PVT. LTD., INCOME TAX APPEAL No. 91 / 2016 PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) Vs. M/S. KATARIA WIRES PVT. LTD., INCOME TAX APPEAL No. 93 / 2016 PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) Vs. M/S. KATARIA WIRES PVT. LTD., INCOME TAX APPEAL No. 94 / 2016 PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) Vs. M/S. KATARIA WIRES PVT. LTD., INCOME TAX APPEAL No. 102 / 2016 PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) Vs. M/S. D. P. POWER --- 3 --- INCOME TAX APPEAL No. 103 / 2016 PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) Vs. M/S. D. P. POWER INCOME TAX APPEAL No. 104 / 2016 PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) Vs. M/S. D. P. POWER INCOME TAX APPEAL No. 105 / 2016 PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) Vs. M/S. D. P. POWER INCOME TAX APPEAL No. 106 / 2016 PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) Vs. M/S. D. P. POWER INCOME TAX APPEAL No. 107 / 2016 PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) Vs. M/S. D. P. POWER INCOME TAX APPEAL No. 108 / 2016 PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) Vs. M/S. D. P. POWER INCOME TAX APPEAL No. 44 / 2017 PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) Vs. M/S. D. P. POWER --- 4 --- INCOME TAX APPEAL No. 45 / 2017 PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) Vs. M/S. D. P. POWER INCOME TAX APPEAL No. 46 / 2017 PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) Vs. M/S. D. P. POWER INCOME TAX APPEAL No. 47 / 2017 PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) Vs. M/S. D. P. POWER INCOME TAX APPEAL No. 49 / 2017 PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) Vs. M/S. D. P. POWER A N D INCOME TAX APPEAL No. 50 / 2017 PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) Vs. M/S. D. P. POWER * * * * * O R D E R (24/10/2017) PER : S. C. SHARMA, J :- Regard being had to the similitude in the controversy involved in the present cases, the appeals were analogously heard and by a common order, they are being disposed of by this Court. Facts of I.T.A.No. 78/2016 are narrated --- 5 --- hereunder. The present appeal has been filed by the Income Tax Department being aggrieved by order dated 11/1/2016 passed by the Income Tax Appellate Tribunal, Bench Indore in I.T.A.No. 23 (Revenue / Ind / 2015) for the assessment year 2006 – 2007. Facts of the case reveal that during search and seizure operation u/S. 132 of the Income Tax Act, 1961 the business as well as residential premises of Kataria Group, Ratlam was subjected to search and seizure on 7/9/2011. During the course of the assessment proceedings it was revealed that the assessee has claimed depreciation on Wind Mills for the assessment year 2006 – 2007, 2008 – 2009 and 2009 – 2010 for a sum of Rs.13,28,400/-; Rs.3,20,53,136/- and Rs.64,10,627/-, respectively. The Assessing Officer has held that the Wind Mill was not owned by the Assessee and the real owner and user of the turbine was M/s. Enercon India Ltd., It was held by the Assessing Officer that the necessary condition for claiming depreciation u/S. 32 the Income Tax --- 6 --- Act, 1961 was not fulfilled as the assessee was not the owner of the asset. Being aggrieved by the order passed by the Assessing Officer, an appeal was preferred before the Commissioner, Income Tax Appeal and the appeal was decided in favour of the assessee, against which the Income Tax Department has preferred an appeal before the Income Tax Appellate Tribunal and the appeal of the Department was dismissed, meaning thereby, an addition made by the Assessing Officer of Rs.13,28,400/-; Rs.3,20,53,136/- and Rs. 64,10,627/- on account of the depreciation claimed on Wind Mill for the assessment year 2006 – 2007, 2008 – 2009 and 2009 – 2010 was deleted. Against the order passed by the Income Tax Appellate Tribunal, the present appeal has been filed before this Court raising the following substantial questions of law: (1) Whether on the facts and in the circumstances of the case, the I.T.A.T., was legally correct in allowing the depreciation on the assets which is not actually in the possession of the assessee ? (2) Whether the order of the Tribunal ignores and does not deal with the factual findings recorded by the assessing officer and is, --- 7 --- therefore, perverse ? This Court has carefully gone through the order passed by the Assessing Officer, the order passed by the Commissioner, Income Tax appeal and the order passed by the Income Tax Appellate Tribunal. Both the question Nos. 1 and 2 are purely the question of facts which have been decided by the Tribunal as a last authority on facts by analyzing the relevant documents and facts and the first appellate authority has also decided the issue in favour of the assessee. Thus, there are concurrent findings of fact by both the appellate authorities. In the light of the aforesaid, this Court is of the considered opinion that both the question Nos. 1 and 2 raised in this appeal are thus not question of law, but they are purely questions of facts which have been decided by the Tribunal as the last authority on facts by analyzing the relevant documents and facts and the first appellate authority has also decided the issue in favour of the assessee. Thus, there are concurrent findings of fact by both the appellate --- 8 --- authorities. Keeping in view the aforesaid, this Court is of the considered opinion that the present appeal and the connected appeals deserve to be dismissed and are accordingly hereby dismissed. A copy of this order be kept in the record of the connected appeals. (S. C. SHARMA) J U D G E (ALOK VERMA) J U D G E KR

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