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Income Tax Appellate Tribunal, DELHI ‘F’ BENCH,
Before: SHRI N.K. BILLAIYA, & SHRI K.N. CHARY
PER N.K. BILLAIYA, ACCOUNTANT MEMBER,
This appeal by the assessee is preferred against the order of the Commissioner of Income Tax [Appeals] - 2, New Delhi dated 29.01.2016 pertaining to assessment year 2009-10.
The sum and substance of the grievance of the assessee is that the CIT(A) erred in not appreciating that depreciation in respect of electrical equipment was correctly claimed @ 15% against which erroneously 5% of depreciation of Rs. 4,00,158/- was disallowed in the assessment order while disallowing the depreciation in respect of electrical fittings.
The roots for the grievance lie in the assessment order dated NIL framed u/s 143(3) of the Income-tax Act, 1961 [hereinafter referred to as 'the Act'. While examining the claim of depreciation on electrical fittings, claimed @ 15%, the Assessing Officer was of the opinion that depreciation is allowable on furniture and fittings including electrical fittings @ 10%. Accordingly, depreciation on electrical fittings was allowed @ 10% as against claim of the assessee at 15%.
4. However, while disallowing the claim of depreciation on electrical fittings, the Assessing Officer also disallowed depreciation on electrical equipment also. The assessee moved a rectification application u/s 154 of the Act, which was dismissed by the Assessing Officer.
The assessee carried the matter before the CIT(A) but without any success.
Before us, the ld. AR drew our attention to the details of electrical equipment and vehemently stated that these equipments are part and parcel of the plant and machinery and, therefore, the assessee has correctly claimed depreciation @ 15% and the Assessing Officer, while disallowing depreciation on electrical fittings has erroneously disallowed depreciation on electrical equipment also.
We have given a thoughtful consideration to the orders of the authorities below. The details of electrical equipments is exhibited at page 78 of the paper book and the same is as under:
Details of Electrical Equipments Item Details Supplier Amount Classificati ' (Rs.) on Motor 20,000 Ltr Per Hr Cap Aagarwal Hardware 19,796 Electrical and Electric Store Machinery ■yijA* supply of C 1 Butterfly Values Aastha Engineers 4,903 Electrical Machinery Water supply pipe s.s Dharamvcer and 23,550 Electrical Company Machinery Electrical equipment for Electrical Control 31,077 Electrical additional work Systems Machinery Telemechanique breakers Electrical Control 22,427 Electrical Systems Machinery MPCB (Motor Protective Circuit Electrical Control 29,219 Electrical Systems Machinery Breaker) - GV2 ME10. CVAE11 AC Drive - ATV31HU15N4A Electrical Control 21,183 Electrical Systems Machinery supply of electrical items Electrical Control 11,793 Electrical Systems Machinery (contactor/breaker/relay etc) Labour Charges for erection of Gupta Electricals 78,000 Electrical Latice Tower,CT/PT Unit Machinery Transfromer 2000 KVA , OLTC Indian Transformers & 1,784,656 Electrical type Electricals Machinery Epoxy Bushing - Job Work Indian Transformers & 16,490 Electrical Electricals Machinery For hydroneumatic system model; Kanbe Water Tech Pvt 133,900 Electrical Multi-H-804 T EM02(200), Machinery Ltd Control Panel, switches, ball valve, gauge Manufacturing and supply of LT Madhu Electricals 2,668,728 Electrical Panel with ABB Machinery LT Cable Surya Electricals 636,779 Electrical Machinery HT Cable, Industrial Cable 11000 Surya Electricals 386,461 Electrical Volts Ailuminium Armd. Machinery Industrial Cable 1100 v Copper Surya Electricals 62,874 Electrical Armd 16 sqmm 4 core Havells Machinery Make PC USB Port to SLC Engineers & Engineers 312,944 Electrical 5/03,5/04,5/05, (RS232 Port) (Electricals) Pvt. Ltd. Machinery Communication Hardware
Electrical 1,758376 Common Cost Allocation Machinery Total 8,003,156 Industrial cable Surya 62,874 Electrical 100 v copper Electricals Machinery Armd1 sqmm 4 core Havelis Make PV USB Port to Engineers & 312,944 Electrical SLC 5/03, 5/04, Engineers machinery 5/05 [RS232] [Electricals] Pvt Communication Ltd Hardware Common Cost 1,758,376 Electrical Allocation Machinery 1,7758,376 Electrical Machinery
A perusal of the above reveals that these equipments are part and parcel of the plant and machinery and, therefore, eligible for depreciation @ 15%. We, accordingly, direct the Assessing Officer to allow deprecation @ 15% on the electrical equipment.
In the result, the appeal filed by the assessee is allowed.
The order is pronounced in the open court on 03.04.2019.