SMT. SANDHYA KHANDELIA,CHANDIGARH vs. DCIT, CIRCLE 1(1), CHANDIGARH

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ITA 966/CHANDI/2017Status: DisposedITAT Chandigarh03 June 2019AY 2013-144 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the denial of depreciation solely based on the bill date was unjustified. The assessee had demonstrated that the SILO was purchased, delivered, installed, and put to use during the relevant financial year.

What were the facts?

The assessee claimed depreciation on SILO Seed Storage Tanks installed for storing mustard seeds. The Assessing Officer denied depreciation as the bills were dated on the last day of the financial year, suggesting the asset was not put to use. The CIT(A) confirmed this disallowance.

What were the issues?

Whether depreciation can be denied on an asset if the purchase bill is dated on the last day of the financial year, despite evidence of its installation and use during the year.

Which sections of the Income-tax Act were involved?

Section 32

AI-generated summary — verify with the full judgment below

आदेश/Order

Per Sanjay Garg, Judicial Member:

The present appeal has been preferred by the assessee against the order dated 03.03.2017 of the Commissioner of Income Tax (Appeals)-1, Chandigarh [hereinafter referred to as CIT(A)].

2.

The sole issue raised by the assessee in this appeal is relating to the action of the CIT(A) in upholding the addition of ₹ 5,66,365/- made

by the Assessing officer on account of disallowance of depreciation on SILO Seed Storage Tanks.

ITA No. 966-Chd-2017 Smt. Sandhya Khandelia, Chandigarh 2

3.

The brief facts relating to the issue are that the assessee is

engaged in the business of manufacturing and sale of mustard oil by

crushing mustard seeds. The assessee to store the mustard seeds

installed SILO Seed storage Tanks (In short ‘SILO’) and claimed

depreciation on the same. However, the Assessing officer denied the

depreciation claimed by the assessee on the aforesaid mentioned SILO

Seed Storage Tanks observing that the bills for the said storage tank

sold to the assessee by its sister concern was of 31.3.2013 i.e on the

last day of the financial year and that under the circumstances the

assessee could not have put to use the aforesaid SILO during the year.

4.

In appeal, the Ld. CIT(A) confirmed the disallowance made by the

Assessing officer.

5.

Before us, Ld. Counsel for the assessee has invited our attention to

the relevant findings given by the CIT(A) in para 7 of the impugned

order as well as copy of the Challan produced at paper book page 300 to

submit that in fact the SILO was purchased / delivered at the premises

on 15.4.2012, the same was installed during the year and also put to

use. He has invited our attention to the impugned order of the CIT(A)

wherein the Ld. CIT(A) has observed that the last cement bill was of

dated 15.3.2013. The assessee has demonstrated before the CIT(A) that

the cement bills were of purchases made on 25.4.2012 onwards and the

ITA No. 966-Chd-2017 Smt. Sandhya Khandelia, Chandigarh 3 SILO was duly installed. Further that in the month of March 2013, the

only boundary wall of the plant was competed. Merely because the bill

was raised by the sister concern on 31.3.2013 that alone cannot be a

reason to deny the claim of depreciation.

6.

After perusal of the order of the CIT(A), we find that the purchase

of cement and other material and even the use of the crane for shifting

the SILO is found mention in the impugned order of the CIT(A).

However, the depreciation has been denied because the bills was raised

by the sister concern on 31.3.2013. The action of the lower authorities

in denying the depreciation on this count alone cannot be held to be

justified when the assessee otherwise has demonstrated that the SILO

was brought to its premises on 15.4.2012 and the installation was

completed during the year 2012 and the same was put to use. The

impugned disallowance made by the Ld. CIT(A) on this issue is not

sustainable in the eyes of law. The disallowance of depreciation is,

therefore, set aside and the addition made on this account is ordered to

be deleted.

In the result, the appeal of the assessee stands allowed.

Order pronounced in the Open Court on 03/06/2019

Sd/- Sd/- (संजय गग� / SANJAY GARG) (एन. के. सैनी / N.K. SAINI) उपा�य� / Vice President �या�यक सद�य/ Judicial Member Dated : 03.06.2019 “आर.के.”

ITA No. 966-Chd-2017 Smt. Sandhya Khandelia, Chandigarh 4 आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�त/ CIT 4. आयकर आयु�त (अपील)/ The CIT(A) 5. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File

आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar

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