Income Tax Appellate Tribunal - Indore
The Dcit, 1(1), Bhopal vs M/S. Jyoti Construction Company, Harda on 28 September, 2018
Jyoti Construction Company
I.T.A. No. 124/Ind/15
आयकर अपील
य अ धकरण, इ दौर यायपीठ, इ दौर
IN THE INCOME TAX APPELLATE TRIBUNAL
INDORE BENCH, INDORE
BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER
AND
SHRI MANISH BORAD, ACCOUNTANT MEMBER
ITA No.124/Ind/2015
Assessment Year:2008-09
DCIT-1(1), M/s Jyoti Construction Company,
Bhopal बनाम/ Chandak Chowk,
Agrasen Chouraha, Harda
Vs.
(Revenue) (Respondent )
P.A. No.AADFJ4369G
Revenue by Shri P.K.Mitra, Sr. DR
Respondent by None
Date of Hearing: 26.09.2018
Date of Pronouncement: 28 .09.2018
आदे श / O R D E R
PER MANISH BORAD, A.M:
This appeal filed at the instance of Revenue pertaining to A.Y. 2008-09 is directed against the order of Ld. Commissioner of Income Tax(Appeals)-I, Bhopal (in short 'CIT(A)'), vide appeal No. CIT(A)-I/BPL/IT-02/12-13 order dated 17.12.2014 which is arising out of the order u/s 147 r.w.s. 143(3) of the Income Tax Act Jyoti Construction Company I.T.A. No. 124/Ind/15 1961(hereinafter called as the 'Act') framed on 05.03.2012 by DCIT, 1(1), Bhopal.
2. None appeared on assessee's behalf. Case heard with the assistance of Ld. Departmental Representative. Revenue has raised following grounds of appeal;
"On the facts and in the circumstances of the case, the Ld. CIT(Appeal) has erred in Aannulling the reassessment order u/s 147 of the Act, dated 05/03/2012 of DCIT-1(1), resulting in deletion of addition of Rs.3,29,740/- made by him on account of excess claim of depreciation in trucks.
The appellant reserves his right to add, amend or alter the grounds of appeal on or before the date, the appeal is finally heard for disposal.
Although the tax effect involved in this case is less than the monetary limit prescribed by DBDT for filing appeal, however appeal is authorized being covered in para 8 (c ) of DBDT's instruction No.5/2014 dated 10.7.2014 which read as under:-
Para 8 "Adverse judgments relating to the following should be contested irrespective of the tax effect. (c ) Where revenue audit objection in the case has been accepted by the Department.2
Jyoti Construction Company I.T.A. No. 124/Ind/15
3. Briefly stated facts as culled out from the records are that the assessee is a Partnership firm engaged in the business of civil construction work including transportation of site material through hiring of vehicles. Income of Rs. 35,07,360/- declared in the Return of Income filed on 18.09.2008. Assessment was completed on 29.10.2010 after making disallowance of expenses of Rs.1,49,738/- and the total income has been assessed at Rs.36,57,098/-. Notice u/s 148 has been issued on 9.11.2011 for reopening the assessment as disallowance of excess claim of depreciation on trucks @30% instead of 15% and accordingly order u/s 147 r.w.s. 148 was passed on 5.3.2011 making an addition of Rs.3,29,740/- to excess claim of depreciation thereby assessing the income at Rs.39,86,838/-.
4. Aggrieved assessee filed an appeal before the Ld. CIT(A) and succeeded.
5. Aggrieved revenue is now in appeal before the Tribunal.
6. The Ld. Departmental Representative vehemently argued supporting the findings of Ld. Assessing Officer. 3 Jyoti Construction Company I.T.A. No. 124/Ind/15
7. We have heard the contentions of Departmental Representative and perused the records placed before us. The first issue raised is with regard to annulling of the reassessment order u/s 147 of the Act by Ld. CIT(A). We find that the original assessment was framed on 29.10.2010 and for completing the same questionnaire u/s 142(1) of the Act was issued by the Ld. Assessing Officer on 20.08.2010. Specific question was asked with regard to depreciation claimed on the assets. Assessee made reply on 4.10.2010 enclosing there with the statement showing details of fixed assets owned by the assessee. At that point of time Ld.A.O allowed the assessee's claim of depreciation @30% on the trucks owned by it. In the audit report also the depreciation @30% was shown and the auditor has verified the same. Subsequently i.e. after finalizing the assessment u/s 143(3) of the Act when it was noticed by Ld. Assessing Officer that the assessee firm which is engaged in the business of civil construction and is not running the business of plying of truck has claimed the depreciation excessively because the depreciation allowable for trucks used in normal business is allowable @15% and in case they are used for plying, 4 Jyoti Construction Company I.T.A. No. 124/Ind/15 then depreciation @30% is allowable. Observing this fact case of the assessee was reopened and reassessment order was framed.
8. Now the issue before us is whether the reason given by the Ld. Assessing Officer can be termed as "change of opinion". As held by Ld.CIT(A), the reason for reopening by the Ld. Assessing Officer was merely a "change of opinion" and he therefore annulled the reassessment proceedings.
9. We are however of the view that the basic issue which needs to be examined first is whether the assessee has rightfully claimed the depreciation as per its nature of business. Assessee itself has not disputed that it is engaged in civil construction business and not involved in plying of trucks. The discussions about the nature of business vis-à-vis depreciation on truck was never taken up by and before the Assessing authority at the time of original assessment proceedings. It was only during reassessment proceedings that this issue was undertaken. We are therefore of the considered view that this is not the case of "change of opinion" rather it is a new material fact which came up before the Assessing Authority which was not 5 Jyoti Construction Company I.T.A. No. 124/Ind/15 examined by him at the time of original assessment proceedings. We therefore set aside the findings of Ld.CIT(A) and hold the reassessment proceedings as valid. This legal ground raised by the revenue is allowed.
10. Now we take up the merits of the case as to whether the assessee has claimed excess amount of depreciation on trucks at Rs.3,29,740/-. Perusal of records shows that the assessee purchased new trucks and was also having old trucks and they were not used for plying business. Assessee is engaged in the business of civil construction work and trucks have been used in this business. As per the provisions of the Income Tax Act the impugned assets i.e. trucks used for civil construction business were eligible for depreciation @15% and not 30%. Nothing on record shows that the assessee disputed this fact that it is has ever carried the business of plying of trucks. It has only claimed that the trucks were used for transportation of material to various sites which cannot tantamount to plying business rather it is purely an use for civil construction work in which materials are transported to various sites to carry out the construction works. 6 Jyoti Construction Company I.T.A. No. 124/Ind/15
11. We therefore are of the considered view that Ld. CIT(A) erred in not dealing the issue on merits even when the revenue had a strong case. We accordingly allow the grounds raised on merits by revenue and confirm the addition of Rs.3,29,740/- made by the Ld.A.O on account of excess claim of depreciation. In the result the appeal of revenue is allowed.
10. In the result the appeal of the revenue stands allowed.
Order was pronounced in the open court on 28.09.2018.
Sd/- Sd/-
(KUL BHARAT) (MANISH BORAD)
JUDICIALMEMBER ACCOUNTANTMEMBER
Indore; दनांक Dated :28/09/2018
/Dev
Copy to: Assessee/AO/Pr. CIT/ CIT (A)/ITAT (DR)/Guard file.
By order Private Secretary/DDO, Indore 7