ACIT, CHENNAI vs. ANAND TRANSPORT, CHENNAI

This appeal of the Revenue is directed against the order of the Commissioner of Income Tax (Appeals) – 2, Chennai, dated 28.03.2017 and pertains to assessment year 2009-10.

The first issue arises for consideration is with regard to depreciation on Boat Jetty.

Ms. Vijayaprabha, the Ld. Departmental Representative, submitted that the assessee replaced conveyer belt in the Boat Jetty. According to the Ld. D.R., the conveyer belt, roller, etc. are part of the plant and machinery for which the assessee is entitled for depreciation only at the rate of 15%, however, the assessee claimed 100% depreciation. According to the Ld. D.R., by replacement of conveyer belt and roller by new one, the assessee gets enduring benefit, therefore, the assessee cannot claim 100% depreciation.

We heard Shri SP. Palaniappan, the Ld. representative for the assessee also. It is not disputed that the assessee has replaced conveyer belt and roller in the Boat Jetty. Erection of Boat Jetty itself came before this Tribunal in the assessee's own case for the assessment years 2010-11 and 2011-12 in and 2294/Mds/2016. This Tribunal found that the assessee has erected the Jetty in Ennore Port Trust for transport of iron ore. The Jetty erected by the assessee is only a temporary structure, therefore, the Tribunal found that the assessee is eligible for depreciation at the rate of 100%. The Revenue challenged the order before the High Court. The High Court, in fact, confirmed the order of this 100% depreciation, this Tribunal is of the considered opinion that the cost of replacement of conveyer belt and roller in the temporary structure of the Boat Jetty, cannot be construed to give enduring benefit to the assessee. Therefore, the CIT(Appeals) has rightly placed reliance on the order of this Tribunal and allowed the claim of the assessee. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.

The next issue arises for consideration is with regard to disallowance made by the Assessing Officer under Section 14A of the Act.

We heard Ms. Vijayaprabha, the Ld. Departmental Representative and Shri SP. Palaniappan, the Ld. representative for the assessee. From the orders of the lower authorities it appears that the assessee has not earned any dividend income from the investment made in shares and mutual funds. The CIT(Appeals) by placing reliance on the judgement of Delhi High Court in Cheminvest Ltd. v. CIT (2015) 61 taxmann.com 118, found that in the absence of any exempted income, there cannot be any 4 disallowance. It is not disputed that a similar view was taken by Madras High Court in Redington (India) Ltd. v. Addl. CIT (2017) 77 taxmann.com 257. In view of the above, this Tribunal is of the considered opinion that in the absence of any exempted income earned by the assessee, there cannot be any disallowance under Section 14A of the Act. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.

In the result, the appeal filed by the Revenue stands dismissed.