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Income Tax Appellate Tribunal, A / SMC BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN
आदेश /O R D E R
This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals) – III, Chennai, dated 21.07.2014 and pertains to assessment year 2003-04.
Shri V.S. Jayakumar, the Ld.counsel for the assessee, submitted that the assessee has raised three grounds in the appeal.
Out of these three grounds, the assessee is not pressing two grounds. In other words, the assessee is not pressing the ground with regard to reopening under Section 147 of the Income-tax Act, 1961 (in short 'the Act') and also the ground with regard to disallowance of diminution of investments to the extent of `47,000/- In view of the above, both these grounds of appeal with regard to reopening and disallowance of diminution of value of investments are dismissed as not pressed.
3. Now the ground remains is with regard to disallowance of excess depreciation.
4. Shri V.S. Jayakumar, the Ld.counsel for the assessee, submitted that the assessee claimed depreciation at 80% on energy saving device. According to the Ld. counsel, tempering furnace, gas carburizing furnace and sealed quench furnace are to be considered as energy saving devices under Article 5 of Income-tax Rules, 1962. According to the Ld. counsel, the claim of the assessee would squarely fall within the expression “specialized boilers and furnaces”. The Ld.counsel further submitted that the assessee has obtained expert opinion, a copy of which is available at page 10 of the paper-book, from one Dr. N. Krishnaraj, Consultant Metallurgist. The expert opinion was not even considered by both the authorities below and they disallowed the claim of the assessee. According to the Ld. counsel, since the claim of the assessee squarely falls within the definition “energy saving device”, the assessee is eligible for depreciation at 80%.
On the contrary, Sh. P. Radhakrishnan, the Ld. Departmental Representative, submitted that the assessee has produced expert opinion on the field. The Assessing Officer, according to the Ld. D.R., is not an expert in examining the energy saving devices, therefore, the Assessing Officer has to necessarily refer the matter to another expert on the Government side. Unless and until the Assessing Officer refers the matter to an expert on the Government side, he may not be able to take a decision. The Ld. D.R. has very fairly submitted that he is not an expert on the field, therefore, the matter may be remitted back for reconsideration after getting opinion from an expert on the field.
I have considered the rival submissions on either side and perused the relevant material available on record. The assessee claims that tempering furnace, gas carburizing furnace and sealed quench furnace are to be considered as energy saving devices under Article 5 of Income-tax Rules, 1962. The assessee has also obtained an expert opinion from Dr. N. Krishnaraj, Consultant Metallurgist, a copy of which is available at page 10 of the paper- book filed by the assessee. This opinion was not even considered by both the authorities below. This Tribunal is of the considered opinion that this opinion has to be first taken into consideration by the Assessing Officer. The claim of the Ld. D.R. is that the Assessing Officer is not an expert on the field, therefore, he has to necessarily refer the matter to another expert on the Government side. This Tribunal is of the considered opinion that under the scheme of Income-tax Act, the decision making power is vested with the Assessing Officer. If the Assessing Officer could not take a decision on the basis of material available on record after considering the technical report said to be filed by the assessee, it is open to the Assessing Officer to refer the matter to another expert.
Therefore, there may not be any impediment on the part of the Assessing Officer to refer the matter to another expert. However, under the scheme of Income-tax Act, the ultimate decision has to be taken by the Assessing Officer after considering all the material facts including the opinion of expert. This Tribunal is of the considered opinion that since the expert opinion said to have been obtained from one Dr. N. Krishnaraj, Consultant Metallurgist was not considered by the authorities below, the matter needs to be reconsidered by the Assessing Officer. Accordingly, the orders of the authorities below are set aside and the issue with regard to disallowance of depreciation on the so-called energy saving devices alone is remitted back to the file of the Assessing Officer. The Assessing Officer shall reconsider the issue after considering expert opinion and thereafter decide the issue in accordance with law after giving reasonable opportunity to the assessee. It is made clear that it is open to the Assessing Officer to refer the matter to another expert if he feels so.
With the above observation, the appeal filed by the assessee is partly allowed for statistical purposes.
Order pronounced on 18th August, 2016 at Chennai.