Principal Commissioner Of Income Tax (Central) vs. M/S Ratlam Wires Pvt. Ltd.

PDF · subscribers
ITA/85/2016HC 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 by the Revenue were purely questions of fact, not substantial questions of law. The Court noted that the Assessing Officer disallowed depreciation on the ground of non-ownership. However, both the Commissioner (Appeals) and the ITAT had decided the issue in favour of the assessee, based on their analysis of the relevant documents and facts. The Court found concurrent findings of fact by both appellate authorities. Therefore, as the ITAT was the last authority on facts, and its findings were based on an analysis of evidence, the High Court considered itself bound by these factual determinations. The appeals were dismissed on the grounds that they did not involve substantial questions of law.

What were the facts?

The appeals by the Principal Commissioner of Income Tax (Central) are against the order dated 11/1/2016 passed by the Income Tax Appellate Tribunal (ITAT), Bench Indore. The assessment year in question is 2006-2007, with related years 2008-2009 and 2009-2010. During a search operation on 7/9/2011, it was found that the assessee claimed depreciation on Wind Mills amounting to Rs.13,28,400/- for AY 2006-2007, Rs.3,20,53,136/- for AY 2008-2009, and Rs.64,10,627/- for AY 2009-2010. The Assessing Officer disallowed this depreciation, holding 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) ruled in favour of the assessee, and the ITAT dismissed the Revenue's appeal, leading to these High Court appeals.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. Whether on the facts and in the circumstances of the case, the ITAT was legally correct in allowing the depreciation on the assets which are 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, therefore, perverse? The Revenue contended that the ITAT erred in allowing depreciation on assets not owned by the assessee, questioning the legality of the decision and alleging perversity in the Tribunal's order by ignoring the Assessing Officer's findings. The judgment does not record specific contentions from the assessee, but implicitly, the assessee would have argued for the correctness of the ITAT's decision, likely relying on the concurrent findings of the appellate authorities.

Which sections of the Income-tax Act were involved?

Section 132,Section 32

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

More judgments on Section 132

All 14,598 judgments and leading authorities on Section 132 →

Recent GST High Court judgments

Search GST case law →