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Income Tax Appellate Tribunal, “C” BENCH, MUMBAI
Plastiblends India Ltd. Dy. Commissioner of Income Kolsite House, 31 Shah Indl Tax RG 8(2) Estae Off Veera Desai Rd, Mumbai Vs. Andheri (W) Mumbai-400 053 PAN No.AAACP6287B Appellant .. Respondent Assessee by .. Shri Nitesh Joshi, AR Revenue by .. Shri Rajat Mittal, DR Date of hearing .. 29-05-2017 Date of pronouncement .. 09-06-2017 O R D E R PER MAHAVIR SINGH, JM:
These two appeals by the assessee are arising out of the different orders of CIT(A)-17, Mumbai, in appeal Nos. CIT(A)-17/IT/86/12-13, CIT(A)-17/IT-141/13-14 dated 31-07-2013 & 23-04-2014. The Assessment was framed by DCIT-8(2), Mumbai for the A.Ys. 2010-11, 2011-12 vide orders dated 25-10-2012, 25-03-2013 u/s 143(3) of the Income Tax Act, 1961 (hereinafter ‘the Act’).
The only issue in these two appeals of the assessee is as regards to the order of CIT(A) confirming the action of the AO in disallowing the claim of depreciation under section 32(i) of the Act in regard to WDV of earlier years on which depreciation was to be allowed for the year under consideration. For this assessee has raised following ground No.1: -. & Plastiblends India Ltd. (A. Ys:10-11 & 11-12)
“1. The CIT(A) ought to have held that the Appellant had disclaimed deduction by way of depreciation under section 32(1) of the act in the earlier years and, therefore, the written down value on which depreciation was to be allowed for the year under consideration should have been higher to that extent.”
In both the years facts and circumstances are exactly identical and also the grounds raised are identically worded. Hence, we will take the facts from AY 2010-11 and will decide the issue.
Brief facts are that leading to the above issue are that the AO during the course of assessment proceedings recomputed the depreciation claimed in respect to unit 1, 2 and 3 after thrust depreciation in all the earlier years on the assessee company by reworking the WDV. He recomputed in the depreciation and disallowed the excess claim of depreciation. Aggrieved, assessee preferred the appeal before CIT(A), who also confirmed the action of the AO by stating that the assessee has not claimed depreciation in earlier years which is mandatory and hence, he was of the view that the AO has rightly allowed entitled depreciation, re-worked the WDV and then re-computed the depreciation and allowed less depreciation. Aggrieved, assessee is in second appeal before us.
We have heard the rival contentions and gone through the facts and circumstances of the case. At the outset, the learned Counsel for the assessee stated that the dispute relates to AY 2000-01 and in earlier years wherein assessee has not claimed depreciation which was thrust upon by the AO and for which assessee preferred the appeal before higher authorities and finally matter traveled up to Hon’ble Bombay High Court wherein assessee lost the case. He stated that presently the matter is in before Hon’ble Supreme Court. Again, he stated that for and from & Plastiblends India Ltd. (A. Ys:10-11 & 11-12)
AYs 2001-02 to 2009-10, the assessee has claimed depreciation and AO has allowed. The only disputed point is the earlier years for which the matter is pending before the Hon’ble Supreme Court. He stated that whatever decision will be in the Supreme Court, whether the matter will go against to assessee or in favour of assessee, the AO has to give effect to that. However, he only made request that the Tribunal all along from AY 2001-02 to 2009-10 is consistently directing the AO that Written Down Value at the beginning of the year shall be computed only on the basis of orders which have already reached the finality. In other words, the depreciation actually claimed or directed to be allowed only and shall be taken into consideration before arriving at the Written Down Value of the asset in question. He requested that the similar direction should be given. On query from the Bench, the learned Sr. Counsel fairly conceded the position. On factual aspects in the case as above, we directed the AO to follow the direction given in for the FY 2003- 04 dated 27-06-2007 which reads as under: -
“2. During the course of hearing, the learned Counsel for the assessee pointed out that in the year in question the assessee has claimed depreciation and there is no question of thrust of any depreciation but its grievance is that the final orders of the earlier years which have not been properly implemented. The assessee desires there should be a specific direction to the Assessing Officer on this behalf so as not to disturb the finality of the orders of the earlier years. The learned Department Representative, on the other hand, has no objection if a specific direction is given to the Assessing Officer. We, therefore, direct the assessing officer that the & Plastiblends India Ltd. (A. Ys:10-11 & 11-12) written down value as at the beginning of the year shall be computed only on the basis of the orders which have been already reached the finality. In other words, the depreciation actually claimed or directed to be allowed only shall be taken into consideration before arriving the written down value of the assets in question.”
We direct the AO to follow the same and in case of decision is delivered by Hon’ble Supreme Court by that time, the AO will re-compute the WDV and depreciation accordingly. Both the appeals of the assessee are partly allowed as indicated above.
In the result, the appeals of assessee are partly allowed for statistical purposes. Order pronounced in the open court on 09-06-2017.