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Income Tax Appellate Tribunal, PUNE BENCHES “A” :: PUNE
Before: SHRI S.S.GODARA & DR. DIPAK P. RIPOTE
ORDER
PER DR. DIPAK P. RIPOTE, AM:
This is an appeal filed by the Revenue against the order of Ld.Commissioner of Income Tax(Appeal)[NFAC], Delhi under section 250 of the Income Tax Act, 1961, emanating from the order under section 143(3) of the Act, dated 30.12.2019.The Revenue has raised the following grounds of appeal :
1. The CIT(A) erred in allowing Rs.5,62,220/- on account of fixed assets on which project subsidy was received from National Dairy Development Board as the department has contested the issue before the Supreme Court. Kolhapur Zilla Sahakari Dudh Utpadak Sangh Limited [R]
2. The CIT(A) erred in allowing Rs.1,61,18,757/- on account of additional depreciation as in the assessee’s own case for A.Y. 2014-15 the CIT(A) had disallowed the said expenditure.
3. The CIT(A) erred in allowing Rs.13,25,417/- on account of Mahila Netrutva Vikas Gokul Gram Expenditure as self made vouchers cannot be accepted as cogent evidence.”
Submission of ld.AR : 2. At the outset of hearing, no one attended on behalf of the assessee. No one appeared even for the earlier hearing dated 11.03.2024. No adjournment letter has been filed.
Submission of Ld.Departmental Representative : 3. Ld.DR for the Revenue relied on the order of the Assessing Officer.
Findings and Analysis : 4. We have heard ld.DR for the Revenue and perused the records.
Ground No.1 : 4.1 The ld.AO in para 8 of the assessment order has observed that assessee had received project subsidy of Rs.7,78,34,115/- from National Diary Development Board towards purchase of 2 Kolhapur Zilla Sahakari Dudh Utpadak Sangh Limited [R] Machinery/Equipments. The AO observed that assessee should have claimed depreciations after reducing the amounts of Rs.7,78,34,115/- from the actual cost of assets. However, assessee has not deducted the amount of Rs.7,78,34,115/- from the actual cost of assets. Hence, AO re-worked the depreciation and made an addition of Rs.5,62,220/-. It has been mentioned in the assessment order by the Assessing Officer that for earlier years, in assessee’s own case this issue has been decided in favour of assessee and Department’s Appeal is pending before the Hon’ble Supreme Court.
4.2 The ITAT in & 2727/PUN/2016 in assessee’s own case has held as under : 11. Similarly, the issue raised vide ground of appeal No.3 is squarely covered by the order of Hon’ble High Court in assessee’s own case relating to assessment years 2007-08 and 2008-09, wherein the Hon’ble High Court has observed that the relief was given to assessee in earlier years, against which the Revenue had not filed any ground, though it had filed the appeal in respect of said orders of Tribunal. The Hon’ble High Court thus, dismissed the grounds of appeal raised by the Revenue in this regard. Applying the said ratio, we dismiss the ground of appeal No.3 raised by the Revenue.
3 Kolhapur Zilla Sahakari Dudh Utpadak Sangh Limited [R] 4.3 Thus, respectfully following the ITAT Pune Bench decision in & 2727/PUN/2016, Ground No.1 raised by the Revenue is dismissed.
Ground No.2 - Additional Depreciation : 5. In the para 10 of the assessment order, it is mentioned that assessee had claimed additional depreciation of Rs.1,16,18,757/- in respect of purchase of plant and machinery in preceding previous year.
5.1 It is observed that this issue has already been decided against the Revenue by ITAT in assessee’s own case wherein Learned Judicial Member is the Author. The ITAT Pune in assessee’s own case in held as under : “4. Next comes the Revenue’s latter substantive ground that the CIT(A) has erred in law and on facts in deleting additional depreciation disallowance of Rs.67,73,998/- as follows :- “11. Ground no. 3 in appeal is against the disallowance of additional depreciation of Rs.67,73,998 The ground taken by the appellant is reproduced below: 3. On the facts and in the circumstances of the case the Learned A.O. has erred in law and on merit in disallowing additional depreciation of Rs. 67,73,998/-.
During assessment proceedings, the AO noticed that the appellant had claimed additional depreciation in the AY relevant to the financial year in which the machinery was installed. The amount of depreciation claimed is Rs.67,73,998. 4 Kolhapur Zilla Sahakari Dudh Utpadak Sangh Limited [R] The AO was of the view that the provisions of section 32(1)(iia) are effective from 01/04/2016. He therefore, disallowed the excess claim of additional depreciation, which was added back to the appellant’s total Income.
During appellate proceedings, the appellant has contended that the machinery purchased was put to use for less than 180 days and that it had claimed additional depreciation @ 10% in the previous year and claimed the balance 10% in the current year. In support of its claim for additional depreciation the appellant has placed reliance on the decision of the ITAT, Pune in the cases of Dy.CIT vs Shri Madhavan Nanu Pillai in and honourable Karnataka High Court in the case of CIT V/s Rittal India (P) Ltd.
I have carefully considered the submissions of the appellant on this issue. I find that my predecessor has been dismissing this ground for the earlier AYs, against which the appellant had filed further appeal before the Hon’ble ITAT, Pune Bench. I further find that vide order dated 18/12/2018 for AYs 2009-10 to 2011-12 in ITA Nos. 616 to 618/PUN/2016, the ITAT has allowed this ground of appeal
. This 3rd ground raised before me is identical to the single ground raised before the ITAT by the assessee in the above mentioned appeals. On this ground, the Honhle ITAT has held as under:
8. We find that similar issue of claim of additional depreciation in the year consequent to the year of purchase and being put to use, arose before the Tribunal in the case of DCIT Vs. Shri Madhavan Nanu Pillai in ITA No. 2222/PN/2013, relating to assessment year 2009-10 and the Tribunal vide order dated 23.09.2015 had held as under:- ………..
9. Though the issue before the Tribunal in the aforesaid case started from initial issue of being debatable issue and whether the same could be dealt with under section 154 of the Act, however, the Tribunal also decided the issue on merits and it has been held that in case the plant & machinery is held in the year of acquisition for a period less than 180 days, then balance 10% of cost of asset to be allowed as additional depreciation, is to be allowed in the succeeding year. Following the same parity of reasoning, we hold that the assessee is entitled to claim the aforesaid benefit ………..
5 Kolhapur Zilla Sahakari Dudh Utpadak Sangh Limited [R] It is evident from the above that the issue has been decided in favour of the appellant by the ITAT in its own case for the AYs 2009-10 to 201112. Respectfully following the same, the disallowance of Rs 67,73,998 being the additional depreciation, is deleted and ground no. 3 is allowed.” It has come on record that the learned co-ordinate bench has already upheld the CIT(A)’s findings as the very issue is preceding AYs 2009- 10 onwards (supra). We thus adopt judicial consistency to reject the Revenue’s instant latter substantive ground in very terms in absence of any distinction.
This Revenue’s appeal is dismissed in above terms.” 5.2 Thus, respectfully following the judicial consistency, the Revenue’s Ground of additional depreciation is dismissed.
Ground No.3 : 6. This ground is regarding disallowance of Rs.13,25,417/-. In the assessment order in para 9, it is mentioned that assessee had debited Rs.26,50,833/- on account of Mahila Netrutva Vikas Gokul Gram. The assessee claimed that assessee had organised training programmes to educate the milk producers about the effective and new techniques of increasing the milk production capacity. Assessee further claimed that these programmes were carried out at grass root level in villages. Assessee further claimed that these programmes were essential for the business of the assessee. Ld.AO observed in the assessment order that assessee failed to 6 Kolhapur Zilla Sahakari Dudh Utpadak Sangh Limited [R] produce documentary evidences like bills, vouchers etc. Assessee only furnished ledger extract and some self-made vouchers. Therefore, AO observed that assessee’s claim is not fully supported by evidences, hence, AO disallowed the 50% of the expenditure. Ld.CIT(A) deleted the said addition stating that AO cannot step into the shoes of a businessman and these kinds of expenses are essential in the line of assessee’s business. However, ld.CIT(A) ignored the fact that assessee had not produced all the bills and vouchers as asked by the AO. The assessee has to prove that the expenditure were incurred wholly and exclusively for the purpose of the business of the assessee by filing documentary evidence. In this case, it is observed that assessee had not produced all the required documentary evidences. Therefore, we agree with the AO’s disallowance of Rs.13,25,417/-. Accordingly, Ground No.3 raised by the Revenue is allowed.