Income Tax Appellate Tribunal - Delhi
Sbl Pvt. Ltd, New Delhi vs Department Of Income Tax on 22 August, 2008
IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH `G' : NEW DELHI)
BEFORE HON'BLE SR. VICE PRESIDENT SHRI R.P. GARG AND
HON'BLE JUDICIAL MEMBER, SHRI RAJPAL YADAV
ITA No.1513/Del./2009
(Assessment Year : 2006-07)
ACIT, Circle 17, Vs. M/s SB Packaging Ltd.,
New Delhi. India Enclave, Paschim Vihar,
New Delhi.
(PAN/GIR No.AABCS3731Q)
(Appellant) (Respondent)
Assessee by : None
Revenue by : Shri T. Vasanthan, Sr. DR
ORDER
PER R.P. GARG, Sr.VP This is an appeal by the revenue against the order of the CIT(A) for the assessment year 2006-07 against the allowance on the additon of Rs.28,53,085 made by the Assessing Officer on account of pant and machinery.
2. The Assessing Officer observed that the business of the assessee has gone through a substantial downfall which is reflected by the sale turnover and has decreased from Rs.8,32,92,504 to Rs.6,69,54,450. The scrap generated from 289 tons as against 535 tons in finished products in financial year 2005-06 and the inspector's report stating that most of the machines were not in use and that only one unit was in progress only in which poly-printing for the company M/s Procter & Gamble Ltd., Goa under the brand name Whisper was going on. He, therefore, disallowed the claim of the assessee in absence of use of the plant and machinery by following the decisions in the case of Dinesh Kumar Gulab Chand Aggarwal vs. CIT (2004) 267 ITR 768; CIT vs. Oriental Coal Co. Ltd. (1994) 2006 ITR 682 and 76 Taxman 240 (Cal.); and Liquidators of Paisa Ltd. vs. CIT (1945) 251 ITR 265 (SC). The Commissioner of Income-tax (Appeals) allowed the claim of the assessee by observing as under:
ITA No.1513/Del./2009 (A.Y. : 2006-07) "Once the plant and machinery has been utilized during the year, depreciation cannot be disallowed on adhoc basis for less than optimum utilization of machinery due to non-availability of purchase orders. Also, the Inspector's report is dated 22.08.2008 and the financial year under consideration is the period 01.04.2005 to 31.03.2006. Moreover, the Inspector's report states that most of the machines are not in use; he has not pointed which specific machines were not in use. Accordingly, the claim of depreciation was correct and Assessing Officer is directed delete the addition of Rs.28,53,085 which is 10% of total depreciation claimed at Rs.2,85,30,855."
3. None appeared on behalf of the assessee. We, therefore, heard the Ld.DR and considered the record. In view of the clear finding of the Commissioner of Income-tax (Appeals) that the company was running, manufacturing and the sale of packaging of various products had taken place during in which the machinery as utililsed and, therefore, the depreciation cannot be disallowed on adhoc basis for less than the optimum utilization of machinery do to non-availability of purchase orders. The inspector's report being not specific is to which machinery were not to use. The order of the Commissioner of Income-tax (Appeals), in our opinion, is just and proper and does not call for any interference in this regard.
4. In the result, the appeal is dismissed.
5. Order pronounced in open court on 23.06.2009.
(RAJPAL YADAV) (R.P. GARG)
JUDICIAL MEMBER SR. VICE PRESIDENT
Dated: June 23, 2009.
*SKB*
Copy forwarded to:-
1. The Appellant
2. The Respondent
3. The CIT
4. The CIT(A)-X, New Delhi.
5. The DR, ITAT, Loknayak Bhawan, Khan Market, New Delhi.
AR/ITAT 2 ITA No.1513/Del./2009 (A.Y. : 2006-07) 3