THE DCIT, CIRCLE-1(1)(2), AHMEDABAD vs. M/S. CERA SANITARYWARE LTD., AHMEDABAD

ITA Nos. 2813 & 2814/Ahd/2015 are two separate appeals by the Revenue preferred against the order of the Ld. CIT(A)-1, Ahmedabad dated 29.07.2015 pertaining to A.Ys. 2009-10 & 2010-11.

The first ground relates to the deletion of the disallowance of expenses claimed on account of ESOP amounting to Rs. 40,58,221/-.

While scrutinizing the return of income, the A.O. noticed that the assessee company amortized the excess of market price of the shares at the rate of grant of options under the ESOP scheme.

The assessee was asked to explain the treatment made in the books of accounts regarding ESOP and to justify its allowability. Assessee filed a detailed reply which is extracted at pages 3 to 5 of the assessment order.

The A.O. found that the same was not considered in A.Y. 2008-09. Accordingly, the A.O. disallowed the claim of Rs. 40,58,221/-.

Assessee carried the matter before the ld. CIT(A) and reiterated its claim. After considering the facts and the contentions of the assessee, the ld. CIT(A) observed that the A.O. has followed the findings given in A.Y. 2007-08 to A.Y. 2009-10. The ld. CIT(A) further found that in those years, the Tribunal has allowed the claim of the assessee following the Special Bench judgment of the Tribunal in the case of Bicon Ltd. and directed the A.O. to allow the claim of Rs. 40,58,221/-.

We have carefully considered the orders of the authorities below. We find that in assessee’s case, the Tribunal in earlier years had allowed the claim of the assessee following the decision of the Special Bench of the ITAT Bangalore rendered in the case of Bicon Ltd. (supra). On due consideration of the details, we are of the view that there is no disparity of the facts. The A.O. has based his order exclusively on the findings of the assessment order of earlier assessment years in which years; the Tribunal had allowed the claim of deduction. Respectfully following the findings of the Co-ordinate Bench, we decline to interfere. Ground no. 1 is dismissed.

Grievance raised vide ground no. 2 is common in both years under consideration and relate to the deletion of the disallowance of depreciation on fan and electric installations.

While scrutinizing the details of claimed on various fixed assets, the A.O. found that the assessee has claimed depreciation on electric fittings and fans @ 15%. The A.O. was of the opinion that depreciation is allowable @ 10% on these assets. The assessee was asked to justify its claim of depreciation @ 15%. The assessee filed a detailed reply which did not find any favour with the A.O. who restricted the claim of depreciation @ 10%.

Assessee carried the matter before the ld. CIT(A) and reiterated its claim of depreciation @ 15%. After considering the facts, the ld. CIT(A) found that the A.O. has followed the decision taken in A.Y. 2008-09 in which year, the

On finding parity on the facts of the claim of depreciation and on finding that the Co-ordinate Bench has allowed the claim of depreciation @ 15%, we do not find any reason to interfere with the findings of the ld. CIT(A). The common grievance is accordingly dismissed.

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