TAMIL NADU SALT CORPORATION LIMITED,CHENNAI vs. ACIT CORPORATE CIRCLE 3 (1), CHENNAI

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ITA 834/CHNY/2018Status: DisposedITAT Chennai22 July 2019AY 2007-083 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal, following the Gujarat High Court's decision, held that 100% depreciation is admissible on temporary roads made of clay and sand within salt pans.

What were the facts?

The assessee claimed 100% depreciation on temporary roads adjacent to salt pans, used for movement of salt and equipment. The Assessing Officer allowed only 10% depreciation.

What were the issues?

The primary issue was the allowability of 100% depreciation on temporary roads constructed within salt pans.

Which sections of the Income-tax Act were involved?

Section 32

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI

Before: SHRI GEORGE MATHAN & SHRI INTURI RAMA RAO

Hearing: 22.07.2019

आदेश / O R D E R

PER GEORGE MATHAN, JUDICIAL MEMBER:

1.

This is an appeal filed by the assessee against the Order of the Commissioner of Income Tax (Appeals)-11, Chennai, in ITA No.269/C.I.T(A)-11/2013-14 dated 12.12.2017 for the AY 2007-08.

2.

Smt.J.Sree Vidya represented on behalf of the Revenue and Shri R.Clement Ramesh Kumar represented on behalf of the Revenue.

3.

It was submitted by ld.AR that the only issue raised in this appeal is against the action of ld.CIT(A) in confirming the action of the Assessing Officer in disallowing 90% of the depreciation claimed by the assessee in respect of “temporary roads adjacent to salt pans”. It was a submission that for the purpose of access and movement of salt and equipment, assessee had to build cutcha roads using clay and sand within the Salt Pans. The assessee had claimed 100% depreciation on the same. It was a submission that the Assessing Officer had held that only 10% of depreciation on temporary roads adjacent to salt pans was allowable. It was a submission that the issue was squarely covered by the decision of the Hon’ble Gujarat High Court in the case of C.I.T Vs. Salt and Allied Industries Ltd., reported in [1993] 199 ITR 233 (Gujarat) wherein it has been held that following the decision of Gujarat High Court in the case of C.I.T Vs. Bhavnagar Salt and Industries Works P. Ltd. in [1987] 163 ITR 265(Guj.), wherein it has been held that Salt Pans etc., in respect of which depreciation at 100% is claimed, were made of earth and clay, then 100

per cent depreciation is admissible irrespective of the fact whether salt pans, etc., in respect of which depreciation is claimed, are new or old.

4.

In reply, the ld.DR vehemently support the order of the ld.CIT(A).

5.

We have heard the rival contentions and perused the material available on record. As it is noticed that the roads etc., in salt pans on which the assessee has claimed 100% depreciation, is made of clay and sand and as it is noticed that the issue is squarely covered by the decision of Hon’ble Gujarat High Court in the case of C.I.T Vs. Salt and Allied Industries Ltd., referred to supra, respectfully following the decision of Hon’ble Gujarat High Court in the case of C.I.T Vs. Salt and Allied Industries Ltd.,(supra), the Assessing Officer is directed to allow the depreciation claimed @ 100% in respect of temporary roads adjacent to salt pans by the assessee.

6.

In the result, appeal of assessee is allowed.

Order pronounced on the 22 July, 2019 in Chennai.

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