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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
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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.
Now the ground remains is with regard to disallowance of
excess depreciation.
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
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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
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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
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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.
sd/- (एन.आर.एस. गणेशन) (N.R.S. Ganesan) �या�यक सद�य/Judicial Member
चे�नई/Chennai, �दनांक/Dated, the 18th August, 2016.
Kri.
6 I.T.A. No.1125/Mds/16
आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकर आयु�त (अपील)/CIT(A)-III, Chennai-34 4. आयकर आयु�त/CIT, Chennai-III, Chennai-34 5. �वभागीय ��त�न�ध/DR 6. गाड� फाईल/GF.