PR. COMMISSIONER OF INCOME TAX vs. M/S HARYANA AGRO INDUSTRIES CORPORATION LTD

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ITA/8/2021HC Punjab & HaryanaPHHC01049486202015 July 2022Bench: MR. JUSTICE TEJINDER SINGH DHINDSA,MR. JUSTICE PANKAJ JAIN1 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal filed by the Revenue. The Court relied on its previous judgment dated 24.09.2019 in ITA No. 212 of 2019 (Pr. Commissioner of Income Tax, Panchkula vs. M/s Haryana Agro Industries Corporation Ltd.). In that prior decision, the Court had held that poly covers and wooden crates, which live out their lives within 3 to 4 years as claimed by the assessee, cannot be treated as a capital asset for the purpose of depreciation, nor can they be accepted as such. The ratio decidendi is that assets with a short lifespan, consumed within a few years, do not qualify as capital assets for depreciation purposes. The operative direction was the dismissal of the Revenue's appeal.

What were the facts?

The Principal Commissioner of Income Tax, Panchkula (Revenue) is the appellant, and M/s Haryana Agro Industries Corporation Ltd. (Assessee) is the respondent. The appeal concerns assessment years not explicitly stated in the provided text. The Revenue is challenging an order or action that is not detailed, but the dispute revolves around the treatment of poly covers and wooden crates. The procedural history indicates that a similar question was raised in ITA No. 212 of 2019 before the High Court, which was decided on 24.09.2019. The amount in dispute is not specified.

What were the issues?

1. Whether poly covers and wooden crates, which have a life of 3 to 4 years, can be treated as a capital asset for the purpose of depreciation. (Question of law) Assessee's contention: The assessee argued that poly covers and wooden crates have a short lifespan of 3 to 4 years and therefore cannot be considered capital assets eligible for depreciation. They contended that these items are consumed within a short period and are more akin to consumables or revenue expenditure. Revenue's contention: The Revenue contended that these items, despite their limited lifespan, should be treated as capital assets and depreciation should be allowed. The specific arguments of the Revenue are not detailed in the judgment, but it is implied they disagreed with the assessee's classification.

AI-generated summary — verify with the full judgment below

107 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA-8-2021(O&M)

Date of Decision:15.07.2022 Pr. Commissioner of Income Tax, Panchkula ....... Appellant

versus M/s Haryana Agro Industries Corporation Ltd. ...... Respondent CORAM : HON'BLE MR. JUSTICE TEJINDER SINGH DHINDSA HON'BLE MR. JUSTICE PANKAJ JAIN *** Present: Mr. Yogesh Putney, Senior Standing Counsel for the appellant. *** TEJINDER SINGH DHINDSA,

J. (ORAL)

Heard. From the pleadings on record we find that similar question had been raised in ITA No. 212 of 2019 before this Court and vide order dated 24.09.2019 the appeal of the revenue was dismissed holding that poly covers and wooden crates live out their lives within 3 to 4 years as claimed by the assessee and the same cannot be treated as a Capital Asset for the purpose of depreciation nor the same can be accepted. Consequently the present appeal is dismissed in terms of judgment dated 24.09.2019 passed by this Court in ITA No. 212 of 2019 (Pr. Commissioner of Income Tax, Panchkula vs. M/s Haryana Agro Industries Corporation Ltd.). ( TEJINDER SINGH DHINDSA ) JUDGE ( PANKAJ JAIN ) JUDGE 15.07.2022 sunita Whether speaking/reasoned Yes/No Whether Reportable Yes/No SUNITA NAGPAL 2022.07.18 10:23 I attest to the accuracy and authenticiy of this order/judgment

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