DCIT 10(2)(2), MUMBAI vs. MIRC ELECTRONICS LTD, MUMBAI

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ITA 1523/MUM/2016Status: DisposedITAT Mumbai19 January 2018AY 2009-104 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the Commissioner (Appeals)'s decision, allowing depreciation at 30% on moulds used for electronic goods. This was based on the principle of consistency and prior rulings in the assessee's own case.

What were the facts?

The assessee claimed depreciation at 30% on moulds used in manufacturing electronic goods. The Assessing Officer reduced this to 15%, stating 30% is for rubber and plastic goods. The Commissioner (Appeals) allowed 30% depreciation, following a previous Tribunal order.

What were the issues?

The key issue was the correct rate of depreciation to be applied to moulds used in the manufacturing of electronic goods.

Which sections of the Income-tax Act were involved?

Section 32

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI

Before: SHRI SAKTIJIT DEY & SHRI RAJESH KUMAR

For Appellant: Shri Suman Kumar
For Respondent: Shri Rakesh Mohan

Date of Hearing – 16.01.2018 Date of Order – 19.01.2018

O R D E R PER SAKTIJIT DEY, J.M.

Aforesaid appeal at the instance of the Revenue is directed against the order dated 27th November 2015, passed by the learned Commissioner (Appeals)–53, Mumbai, for assessment year 2009–10.

2.

The solitary issue arising for consideration in the present appeal is, whether the assessee is entitled to claim depreciation on moulds used in electronic goods @ 30% or 15%.

2 MIRC Electronics Ltd.

3.

Brief facts are, the assessee company is engaged in manufacturing of television sets, washing machines, air conditioners and trading in certain Fast Moving Consumer Goods (FMCG). During the assessment proceedings, the Assessing Officer while verifying assessee’s claim of depreciation on different assets found that in the moulds used for manufacturing of electronic goods, the assessee has claimed depreciation @ 30%. The Assessing Officer observed, since the assessee is in the business of manufacturing of electronic goods, it should have claimed depreciation on mounds @ 15% as depreciation @ 30% is allowable on moulds used in rubber and plastic good factories. Accordingly, he allowed assessee’s claim of depreciation on moulds @ 15%. While doing so, he relied upon his decision in assessee’s own case for assessment years 2006–07, 2007–08 and 2008–09. Being aggrieved of allowance of depreciation @ 15% instead of 30%, the assessee preferred appeal before the first appellate authority.

4.

The learned Commissioner (Appeals) taking note of the fact that while deciding similar issue in assessee’s own case the Tribunal has allowed depreciation @ 30% as claimed by the assessee, followed the same and directed the Assessing Officer to allow depreciation @ 30%.

3 MIRC Electronics Ltd.

5.

We have heard rival contentions and perused the material available on record. Learned Counsel appearing for both the parties have agreed before us that the issue in dispute has been decided in favour of the assessee in assessee’s own case for assessment year 2008–09 in ITA no.6788/Mum./2011 dated 29th May 2015. A reference to the aforesaid order of the Tribunal clearly reveals that while deciding identical issue, the Tribunal has held that the assessee is entitled to claim depreciation on moulds @ 30%. While doing so, the Tribunal followed its order in assessee’s own case for assessment years 2005–06, 2006–07 and 2007–08. For better clarity, the observations of the Tribunal on the disputed issue is reproduced herein below:–

“15. We have heard both the parties and perused the relevant material placed before us as well as the decisions of the Tribunal cited by the Ld Representative for the assessee. On hearing both the parties and on perusal of the said orders of the Tribunal, we find the issue is covered in favour of the assessee vide the Tribunal‟s orders for the Assessment Years 2005-06; 2006-07 and 2007-08. For the sake of completeness of this order, we extract the relevant para 18 of the Tribunal‟s order dated 13.3.2013 in (AY 2006-2007) and the same reads as under: “18. We have carefully considered the rival submissions in the light of the material placed before us. It is a question of allowance of depreciation @ 30% vis-a-vis 25%. The contention of the assessee is that in the past such depreciation has been granted @ 30%. Ld CIT (A) had invoked section 263 and order of the Learned CIT was quashed by the Tribunal. Therefore, in view of the consistency, we are of the opinion that the claim of the assessee should have been accepted by the Assessing Officer as new facts have been brought on record to justify for different

4 MIRC Electronics Ltd. stand taken during the year under consideration and such view is supported by Hon‟ble Supreme Court in the case of Radhosoami Satsang vs. CIT (193 ITR 321). Accordingly, the ground of the assessee is allowed.”

16.

Respectfully following the aforesaid decision of the coordinate Bench of the ITAT as well as following the principle of consistency, in our considered opinion, the issue under consideration should be allowed in favour of the assessee. Accordingly, Ground no.2 raised by the assessee is allowed.”

6.

Respectfully following the consistent view of the Co–ordinate Bench of the Tribunal in assessee’s own case as referred to above, we uphold the decision of the first appellate authority on this issue by dismissing the ground raised.

7.

In the result, Revenue’s appeal is dismissed. Order pronounced in the open Court on 19.01.2018

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