Income Tax Appellate Tribunal - Chandigarh
The Ropar Distt. Cooperative Milk ... vs Assessee on 30 April, 2010
IN THE INCOME TAX APPELLATE TRIBUNAL
CHANDIGARH BENCH 'A', CHANDIGARH
BEFORE SHR I D.K.SRIVASTAVA, ACCOUNTANT MEMBER
AND MS.SUSHMA CHOWLA, JUDICIAL MEMBER
ITA Nos.991 & 992 /Chd/2010
(Assessment Years : 2003-04 & 2006-07)
The Ropar Distt.Cooperative Milk Vs. The D.C.I.T.,
Producers Union Ltd., Circle 6(1),
Milk Plant, Mohali. Mohali.
PAN: AAAAT5977G
(Appellant) (Respondent)
Appellant by : Shri M.R.Sharma
Respondent by : Shri N.K.Saini, DR
O R D E R
PER SUSHMA CHOWLA, J.M, :
Both the appeals of the assessee are against the separate orders of the Commissioner of Income-tax (A), dated 30.4.2010 relating to a s s e s s m e n t ye a r s 2 0 0 3 - 0 4 & 2 0 0 6 - 0 7 a g a i n s t t h e o r d e r s p a s s e d u / s 143(3) of the Income-tax Act.
2. Both the appeals of the assessee on the same issue were heard together and are being disposed off by this consolidated order for the sake of convenience.
3. The ground No.2 raised by the assessee is common in both the a s s e s s m e n t ye a r s a n d r e a d s a s u n d e r :
"2. That the order of the Assessing Officer as upheld by the Commissioner of Income Tax (Appeals) 2 Chandigarh disallowing claim of depreciation at Rs.1,71,542/- on heavy commercial vehicles being milk tanker with in the meaning of clause (ii) of sub-section (1) of section 32 and allowing depreciation at the rates applicable to motor cars is bad in law and needs to set aside."
4. G r o u n d N o . 3 r a i s e d b y t h e a s s e s s e e i n a s s e s s m e n t ye a r 2 0 0 3 - 0 4 i s as under :
"3. That order of the Assessing Officer as upheld by the Commissioner of Income Tax (Appeals) Chandigarh initiating re-assessment proceedings by way of issue of notice u/s 148 is bad in law and is against the judicial decision in this behalf."
5. Shri M.R.Sharma appeared for the assessee and Shri. N.K.Saini appeared for the Revenue and put-forth their contentions.
6. The learned A.R. for the assessee fairly pointed out that the issue with regard to the initiation of assessment proceedings though raised before the CIT(A), has not been addressed by the CIT(A). The learned A.R. pointed out that the issue may be sent back to the file of the CIT(A) for adjudication.
7. The learned D.R. for Revenue pointed out that in view of the reasons for reopening, the assessment proceedings has been rightly initiated under section 147/148 of the Act.
8. We have heard the rival contentions and perused the record. The grievance of the assessee in this regard is that no proper adjudication of the issue was done b y the CIT(A). From the perusal of the order of CIT(A) it transpires that though the CIT(A) has referred to the ground of appeal but has not adjudicated upon the same. Under the provisions of 3 section 250(6) of the Act it is imperative upon the CIT(A) to pass an order in writing disposing off the appeal and further the CIT(A) shall state the points for determination, the decision thereon and reason for the decision. In the present case we find that the CIT(A) to have failed to discharge its duty in giving the points for determination/decision on the merits of the case. In the interest of natural justice we deem it fit to restore the issue back to the file of the CIT(A) to re-adjudicate the issue after affording reasonable opportunity of hearing to the assessee. The ground No.2 raised by the assessee is allowed for statistical purposes.
9. Now coming to the issue raised by the assessee against the merits o f t h e a d d i t i o n , t h e i s s u e r a i s e d b y t h e a s s e s s e e i n b o t h t h e ye a r s u n d e r appeal is in connection with the rate of depreciation allowable on the milk tankers owned by the assessee. The assessee had claimed depreciation on the said milk tankers @ 40% which was restricted to 25% by the Assessing Officer. The CIT(A) confirmed the order of the Assessing Officer and accordingl y e x c e s s d e p r e c i a t i o n o f R s . 1 , 7 1 , 5 4 2 / - w a s d i s a l l o w e d i n a s s e s s m e n t ye a r 2003-04. S i m i l a r l y, i n a s s e s s m e n t y e a r 2 0 0 6 - 0 7 t h e c l a i m o f t h e assessee was @ 30% of the WDV which was restricted to 15% by the Assessing Officer and confirmed by the CIT(A), resulting in disallowance of Rs.79,439/-. The assessee is in appeal against the aforesaid orders of the authorities below. On perusal of the record and t h e r a t e s o f d e p r e c i a t i o n f o r t h e c a p t i o n e d ye a r s w e f i n d t h a t t h e r a t e s a p p l i c a b l e f o r t h e a s s e s s m e n t ye a r s 2 0 0 3 - 0 4 a n d 2 0 0 6 - 0 7 a r e a t v a r i a n c e . U n d e r o l d A p p e n d i x - I a p p l i c a b l e f o r a s s e s s m e n t ye a r s 2 0 0 3 - 0 4 t o 2 0 0 5 - 06, the table of rates at which depreciation is admissible is provided under Part-A, Item No.III Machinery & Plant as under : 4
(1) Machinery and plant other than those covered by sub-items (2), (3) and (8) below.
(2) Motor cars, other than those used in a business of running them on hire acquired or put to use on or after the 1st day of April, 1990.
(3) (i) Aeroplanes - aeroengines
(ii) Motor buses, motor lorries and motor taxis used in a business of running them on hire.
(iii) Commercial vehicle which is acquqired by the assessee on or after the 1st day of October, 1998, but before the 1st day of April, 1999 and is put to use for any period before the 1st day of April, 1999 for the purposes of business or profession in accordance with the third proviso to clause (ii) of sub-section (1) of section 32.
(iv) New commercial vehicle which is acquired on or after the 1st day of October, 1998, but before the 1st day of April, 1999 in replacement of condemned vehicle over 15 years of age and is put to use for any period before the 1st day of April, 1999 for the purposes of business or profession in accordance with the third proviso to clause
(ii) of sub-section (1) of section 32.
(v) New commercial vehicle which is acquired on or after the 1st day of April, 1999, but before the 1st day of April, 2000 in replacement of condemned vehicle over 15 years of age and is put to use before the 1st day of April, 2000 for the purposes of business or profession in accordance with the second proviso to clause
(ii) of sub-section (1) of section 32."5
10. Under item III (iii) to (v) the commercial vehicles acquired by the assessee during the specified period are eligible for depreciation @ 40% and as admitted by the learned A.R. for the assessee the said milk vans owned by the assessee were not acquired by the assessee in the said period and hence the said rates were not attracted in the case of the assessee.
11. Now coming to the case of the assessee, the contention of the assessee in this regard was that the milk vans owned by the assessee w e r e k i n d o f m o t o r l o r r i e s w h i c h w e r e b e i n g r u n o n h i r e f o r c a r r yi n g o n the business of the assessee. The learned A.R. for the assessee submitted that the assessee was to collect milk and supply the same to Mother Diary in its milk vans and hence, the plea of running the milk vans on hire. When confronted regarding the application of TDS provisions to such hiring of vehicles, the learned A.R. pointed out that t h e s a i d m i l k v a n s w e r e u t i l i z e d f o r c a r r yi n g o n t h e b u s i n e s s o f t h e assessee and the charges were part of sale.
12. In the totalit y of the facts and circumstances of the case. we find no merits in the contention of the assessee that the milk vans are engaged in the business of hiring. The assessee is utilizing the said milk vans for transportation of milk collected from different vendors for s u p p l y t o M o t h e r D i a r y. T h e s a i d m i l k v a n s a r e e n g a g e d i n t h e b u s i n e s s carried on by the assessee and hence cannot be said to be engaged in the business of running them on hire. A c c o r d i n g l y, t h e e n h a n c e d r a t e b y 40% in allowing depreciation on the said asset is not allowable to the 6 assessee. Under item No.III (1) the rate of 25% for allowing depreciation on machinery and plant other than those covered by sub- items (2), (3) and (8) below is provided i.e. general rate of allowing depreciation on machinery & plant is 25%. However, in respect of motor car other than those being plied in the business of running on hire, acquired or put to use on or after 1st April, 1990 is 20% under Item-III (2), which is not applicable to the facts of the present case. As the case of the assessee does not fall within sub-item (2),(3) and (8) under item III of the old Appendix-I, the assessee is entitled to the claim of depreciation @ 25% on the milk vans owned by it. Confirming the order of the CIT(A) we dismiss the ground No.2 raised by the assessee in this r e g a r d f o r a s s e s s m e n t ye a r 2 0 0 3 - 0 4 .
13. I n a s s e s s m e n t ye a r 2 0 0 6 - 0 7 , s i m i l a r r a t e o f d e p r e c i a t i o n a l l o w a b l e as per item III(1) is 15% and hence, the assessee is entitled to the depreciation @ 15% on the milk vans owned by it. Confirming the order of the CIT(A) we dismiss the ground no.2 raised by the assessee in t h i s r e g a r d f o r a s s e s s m e n t ye a r 2 0 0 6 - 0 7 .
14. I n t h e r e s u l t , a p p e a l o f t h e a s s e s s e e f o r a s s e s s m e n t ye a r 2 0 0 3 - 0 4 i s p a r t l y a l l o w e d a n d a p p e a l f o r a s s e s s m e n t ye a r 2 0 0 6 - 0 7 i s d i s m i s s e d .
Order Pronounced in the Open Court on 29th day of April, 2011.
Sd/- Sd/- (D.K.SRIVASTAVA) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 29th April , 2011 Rati
Copy to: The Appellant/The Respondent/The CIT(A)/The CIT/The DR. 7 8