ACIT, JAIPUR vs. VENKATESWARA WIRES PVT. LTD., JAIPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES , JAIPUR Jh HkkxpUn] ys[kk lnL; ,o Jh dqy Hkkjr] U;kf;d lnL; ds le{k BEFORE: SHRI BHAGCHAND, AM & SHRI KUL BHARAT, JM vk;dj vihy la-@ITA No. 762/JP/2016 fu/kZkj.k o"kZ@Assessment Year : 2010-11 cuke The ACIT M/s. Venkateswara Wires (P) Ltd. Vs. Circle- 6 302, Navjeevan Chambers Jaipur Vinoba Marg, C Scheme, Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAACV 5085 F vihykFkhZ@Appellant izR;FkhZ@Respondent jktLo dh vksj ls@ Revenue by: Shri R.A. Verma, Addl. CIT-. DR fu/kZkfjrh dh vksj ls@Assessee by: Shri S.L. Poddar, Advocate lquokbZ dh rkjh[k@ Date of Hearing : 22/02/2017 ?kks"k.kk dh rkjh[k@ Date of Pronouncement : 22 /02/2017 vkns'k@ ORDER PER BHAGCHAND, AM The Revenue has filed an appeal against the order of the ld. CIT(A)-5, Jaipur dated 13-06-2016 for the assessment year 2010-11 raising therein following grounds of appeal. 1. Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) was justified in deleting the addition of Rs. 45,39,528/- made by AO on account of excess depreciation claimed by assessee on windmill projects. 2. Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) was justified in treating the civil construction (building) 7 plant & machinery related

2 ITA No. 762/JP/2016 The ACIT, Circle- 6,Jaipur vs. M/s. Venkateswara Wires (P) Ltd. Jaipur . to windmill project as a part of windmill project and accordingly eligible for depreciation @ 80% as claimed by assessee.

2.1 Apropos Ground No. 1 and 2 of the Revenue, the facts as emerges

from the order of the ld. CIT(A) is as under:-

‘’2.3 I have considered the facts of the case, the assessment order and the submissions of the appellant. The issue as to whether the civil constructions parts and plant & machinery are different units and separate from the windmill and hence eligible for lesser rate of depreciation, came up for decision in the case of the assessee before ld. CIT(A)-II, Jaipur in appeal No. 332/10-11 dated 23-07-2013 and was decided as follows.

‘’I have considered the facts of the case the assessment order and the submissions of the case. Assessing Officer restricted the depreciation on civil construction work in windmill from 80% to 10%. Appellant submitted that civil construction work is part of wind mill for which composite rate of depreciation is 80%. Appellant also relied upon the decision of Tribunal and also of Jurisdictional High Court. I have gone through these decisions. The decision of jurisdictional Tribunal in the case of Vijay Industries vs. ACIT ITA No. 745/JP/2007 dated 18-07-

3 ITA No. 762/JP/2016 The ACIT, Circle- 6,Jaipur vs. M/s. Venkateswara Wires (P) Ltd. Jaipur . 2008 wherein ITAT categorically held that the cost of civil work has to be added to the cost of windmill and is thus eligible for the depreciation @ 100%. Since facts of the appellant are identical, this issue is covered in favour of the appellant. Accordingly, Assessing Officer is directed to allow depreciation on civil construction work at the rate applicable to wind mill. If any effect of reduced depreciation is already given in future years, AO is directed to withdraw the same.’’

2.4 Following the above decision, it is held that the civil construction part as well as plant & machinery are integral part of wind mill and are hence eligible for depreciation at the rate of 80% as applicable to wind mill. The addition of Rs. 45,39,528/- on account of disallowance of depreciation is therefore, deleted.’’

2.2 During the course of hearing, the ld. DR relied on the order AO.

2.3 On the other hand, the ld. AR of assessee supported the order of the

ld. CIT(A).

2.4 We have heard the rival contentions and perused the materials

available on record. It is noted that such issue has already been decided

by the Coordinate Bench vide order dated 18-07-2008 in the case of M/s.

Vijay Industries vs. ITO, Alwar in ITA No. 745/JP/2007 for the

assessment year 2003-04 wherein the Bench had allowed 80%

depreciation on the issue in question by observing as under:-

‘’6. We have heard the rival contentions and perused the facts of the case. The Provisions of allowing depreciation on the wind mill is governed by appendix I para (xiii) (1) which reads as under:- ‘’(xiii) Renewable energy devices being (a) to (k) ……………..

4 ITA No. 762/JP/2016 The ACIT, Circle- 6,Jaipur vs. M/s. Venkateswara Wires (P) Ltd. Jaipur . (l) Wind mills and any specially designed devices which run on wind mills 80%’’

It is evident from the aforementioned Provisions that the depreciation @ 80% has to be charged on the complete wind mill. Therefore, the ld. CIT(A) is not justified in segregating the cost of the construction of the room from the said wind mill. The said construction of the room , as argued has been specially designed for the purpose of the wind mill and therefore, the ld. CIT(A) is directed to allow the depreciation as per the rules applicable on the wind mills. Thus Ground No. 6 of the assessee is allowed’’

Respectfully following the decision of the Coordinate Bench (supra), we

find no reason to interfere with the order of the ld. CIT(A). Thus Ground

No. 1 and 2 raised by the Revenue are dismissed.

3.1 Apropos Ground No. 3 and 4 of the Revenue, the facts as emerges

from the order of the ld. CIT(A) is as under:-

‘’5.3 I have considered the facts of the case, the assessment order and the submissions of the appellant. Employee’s PF of Rs. 16,785/-has admittedly been deposited before the due date u/s 139(1) and is therefore, allowable in view of decisions of Jurisdictional High Court including that in the case of CIT vs. JVVNL 98 DTR 105 (Raj.).The disallowance of Rs. 16,875/- is accordingly deleted.’’

3.2 During the course of hearing, the ld. DR relied on the order AO.

3.3 On the other hand, the ld. AR of assessee supported the order of the

ld. CIT(A).

3.4 We have heard the rival contentions and perused the materials

available on record. In this case, the AO noticed during assessment

proceedings that the assessee had failed to deposit EPF amounting to Rs.

5 ITA No. 762/JP/2016 The ACIT, Circle- 6,Jaipur vs. M/s. Venkateswara Wires (P) Ltd. Jaipur . 16,785/- on or before the prescribed due dates. Hence, the AO in terms of

Section 36(1)(va) read with Section 2(24)(x) of the I.T. Act disallowed

the amount of Rs. 16,785/- and added the same to the total income of the

assessee which has been deleted by the ld. CIT(A) in first appeal. The

Revenue in appeal before us prayed that the ld. CIT(A) has erred in

deleting the amount of Rs. 16,765/- disallowed by the AO. We find that

such issue has already been decided in favour of the assessee by the ITAT

Jaipur Bench in the case of ITO vs. M/s. S. Brothers Facilities

Management in ITA No. 957/JP/2016 for the assessment year 2013-14

vide order dated 5 /01/2017 by observing as under:-

‘’2.5 I have heard the rival contentions and perused the materials available on record. I have gone through the order of the ld. CIT(A) and the case laws submitted before the ld. CIT(A) which finds favour of the assessee. It may further be noted that such issue has also been decided by the ITAT, Coordinate Bench, Jaipur in favour of the assessee vide its order dated 27-09-2016 in the case of ACIT vs. Shri Shailendra Garg, C/o M/s. Garment Craft India (P) Ltd. (ITA No. 804/JP/2015 for the assessment year 2010- 11). It may be further noted that the Hon'ble Hon'ble Jurisdictional High Court in the case of CIT vs. Udaipur Dugdh Utpadak Sahakari Sangh Ltd. (2014) 265 CTR 59 had considered this issue in detail at para 7 to 9 of its order as under:- ‘’7. Further, the hon'ble Supreme Court in CIT v. Vinay Cement Ltd. [2009] 313 ITR (St.) 1 (SC) while dismissing the special leave petition preferred by the Revenue against the judgment of the Gauhati High Court observed as under : ‘’In the present case, we are concerned with the law as it stood prior to the amendment of section 43B. In the

6 ITA No. 762/JP/2016 The ACIT, Circle- 6,Jaipur vs. M/s. Venkateswara Wires (P) Ltd. Jaipur . circumstances the assessee was entitled to claim the benefit in section 43B for that period particularly in view of the fact that he has contributed to provident fund before filing of the return." 8. Following the observations of the hon'ble Supreme Court in Vinay Cement (supra), the Delhi High Court in CIT v. AIMIL Ltd. [2010] 321 ITR 508 (Delhi) held at page 518 as under : "We may only add that if the employees' contribution is not deposited by the due date prescribed under the relevant Acts and is deposited late, the employer not only pays interest on delayed payment but can incur penalties also, for which specific provisions are made in the Provident Funds Act as well as the Employees' State Insurance Act. Therefore, the Act permits the employer to make the deposit with some delays, subject to the aforesaid consequences. In so far as the Income-tax Act is concerned, the assessee can get the benefit if the actual payment is made before the return is filed, as per the principle laid down by the Supreme Court in Vinay Cement [2009] 313 ITR (St.) 1 (SC)." 9. In view of the settled legal position, the appeal preferred by the Revenue has no substance and the same is, therefore, dismissed. No costs. ‘’ In view of the above facts, circumstances of the case and the decisions mentioned above, I find no reason to interfere with the order of the ld. CIT(A). Thus the appeal of the Revenue is dismissed. ‘’

In view of the above deliberations and respectfully following the order of

Hon'ble Jurisdictional High Court in the case of CIT vs. JVVNL 98 DTR

105 (supra) and also the order of ITAT Jaipur Bench (supra), we find no

7 ITA No. 762/JP/2016 The ACIT, Circle- 6,Jaipur vs. M/s. Venkateswara Wires (P) Ltd. Jaipur . reason to interfere with the order of the ld. CIT(A) on the issue in question. Thus Ground No. 3 and 4 of the Revenue are dismissed. 4.0 In the result, the appeal of the Revenue is dismissed. Order pronounced in the open Court on 22 /02/2017

Sd/- Sd/- ¼dqy Hkkjr½ ¼HkkxpUn½ (KUL BHARAT) (Bhagchand) U;kf;d lnL; /Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 22/02/ 2017 *Mishra आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- The ACIT, Circle- 6, Jaipur izR;FkhZ@ The Respondent- M/s. Venkateswara Wires (P) Ltd. , Jaipur 2. 3. vk;dj vk;qDr¼vihy½@ CIT(A). vk;dj vk;qDr@ CIT, 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. 6. xkMZ QkbZy@ Guard File (ITA No.762/JP/2016) vkns'kkuqlkj@ By order,

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