Income Tax Appellate Tribunal - Mumbai
Robinsons Cargo And Logistics Pvt. ... vs Acit 1(3)(1), Mumbai on 7 July, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH "J", MUMBAI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI N.K. PRADHAN, ACCOUNTANT MEMBER ITA NO.5018/MUM/2016 (A.Y: 2013-14) M/s. Robinsons Cargo and Logistics v. ACIT-1(3)(1) Private Ltd. Aayakar Bhavan, 1st Floor, Mirchandani Business Park M.K.Road Sakinaka Junction, Mumbai - 400 020 Andheri (East) Mumbai - 400 072 PAN : AAECR 5897 D (अपीलार्थी / Appellant) (प्रत्यर्थी / Respondent) अपीलार्थी की ओर से /Appellant by : Shri Rajeev Waglay प्रत्यर्थी की ओर से /Respondent by : Ms. Arju Garodia सुनवाई की तारीख / Date of Hearing : 12.04.2017 घोषणा की तारीख / Date of Pronouncement : 07.07.2017 आदे श / O R D E R PER C.N. PRASAD (JM)
1. This appeal is filed by the assessee against the order of the Commissioner of Income Tax (Appeals)-3, Mumbai dated 13.06.2016 for the Assessment Year 2013-14.
2. The only issue in the appeal of the assessee is regarding the disallowance of depreciation in respect of cold storage system.
3. Briefly stated the facts are that the Assessing Officer while completing the assessment noticed that the assessee claimed depreciation on cold storage at the rate of 80% which is applicable to renewable energy devices. It is the contention of the assessee that the cold storage using the same refrigerant again and again (close loop system) and therefore the cold storage installed is 2 ITA No.5018/Mum/2016 (A.Y. 2013-14) M/s. Robinsons Cargo & Logistics Pvt.Ltd a renewable energy device. However, this contention of the assessee was not accepted by the Assessing Officer observing that in order to claim depreciation at the rate of 80% the assets using renewable energy sources such as solar energy power, wind power or devices generating renewable energy such as Bio-gas plant are to be provided, are eligible for higher rate of depreciation. The Assessing Officer by observing that the cold storage installed by the assessee uses grid supplied electricity for maintaining the cycle of refrigeration. The cold storage cannot be allowed depreciation at higher rate of 80% treating it as renewable energy device. The Assessing Officer also extracted the certificate issued by the supplier explaining the working principle of refrigeration and major components of the cold storage.
4. On appeal the Ld.CIT(A) upheld the order of the Assessing Officer agreeing with the view taken by him relying on the decision of the Hon'ble Gujarat High Court in the case of CIT v. M/s Anang Polyfil Pvt. Ltd [267 ITR 266]. The assessee placed reliance on the decisions of the Hon'ble Calcutta High Court in the case of CIT v. Harnarayan Lohia & Sons [255 ITR 82] and CIT v. Kaybee Corporation [218 ITR 339] in support of its contention that cold storage is run on a renewable energy device and eligible for higher rate of depreciation.
5. Before us, Learned Counsel for the assessee reiterated the submissions made before the lower authorities and also heavily relied on the decisions of the Hon'ble Calcutta High Court in the case of CIT v. Harnarayan Lohia & Sons (supra) and CIT v. Kaybee Corporation (supra) and submitted that on identical facts the Hon'ble Calcutta High Court allowed depreciation on cold storage at higher rate of depreciation applicable for renewable energy devices as prescribed in Appendix I, Part A (III) (8)(xii)(g) of Income tax Rules, 1962.
6. The Ld.DR vehemently supported the orders of the lower authorities. The Ld.DR further submits that the certificate issued by the supplier of the cold 3 ITA No.5018/Mum/2016 (A.Y. 2013-14) M/s. Robinsons Cargo & Logistics Pvt.Ltd storage machinery is only describing the process of working of the cold storage and nowhere it is mentioned that the cold storage is working on renewable energy. The Ld.DR further referred to the decision of the Hon'ble Calcutta High Court in the case of CIT v. Kaybee Corporation (supra) submits that Hon'ble High Court restored the matter back to the file of the Assessing Officer observing that the Chartered Engineer had nowhere certified that he had visited the cold storage run by the assessee company and it was being run by the renewable energy devices. Similarly, in this case also since there is no finding that the cold storage is run on renewable energy devices the lower authorities are perfectly justified in denying the higher rate of depreciation to the assessee.
7. We have heard the rival submissions, perused the orders of the authorities below. On a perusal of the Assessment Order, the submissions made by the assessee, the Ld.CIT(A) order, we find that there is no finding and discussion by the lower authorities or submission by the assessee as to whether such cold storage is run by renewable energy or not. The certificate issued by the supplier of the cold storage which the assessee is relying on does not state whether the cold storage of the assessee is run on renewable energy devices. No doubt in the decision relied on by the assessee, the Hon'ble Calcutta High Court in the case of CIT v. Harnarayan Lohia & Sons (supra) held that the cold storage run by the assessee was on solar energy operated and fell within the category of renewable energy devices under Item (iii)(10A) of Part I of Appendix I to the Income Tax Rule 1962. But the finding of the Tribunal in this case was that the Chartered Engineer has given a certificate, certifying that the cold storage is run on renewable energy devices. In the case on hand before us there is no such certificate produced by the assessee from Chartered Engineer who is a technical expert to say whether the cold storage installed by the assessee is run on renewable energy devices. Coming to the decision of the CIT v. Kaybee Corporation (supra) the Hon'ble Calcutta High Court considering the certificate given by the Chartered Engineer which was filed for the first time before Tribunal, but has certified that the cold storages are run by renewable 4 ITA No.5018/Mum/2016 (A.Y. 2013-14) M/s. Robinsons Cargo & Logistics Pvt.Ltd energy devices and since it was filed for the first time before the Tribunal the Hon'ble High Court restored the matter to the Tribunal observing that the Chartered Engineer in his certificate has nowhere mentioned that he had visited the cold storage and upon seeing the function of the cold storage certified that the cold storage is run by renewable energy devices. In the case on hand before us also in the absence of the finding by the lower authorities and also necessary proof / technical experts certificate to show that the cold storages of the assessee are run by renewable energy devices the depreciation cannot be allowed at higher rate treating the cold storage falling under category of renewable energy devices.
8. Therefore, in view of the what is stated above we are of the considered view that this matter should go back to the Assessing Officer and a detailed study of function of the cold storage is to be made by a technical person and to find out whether the cold storage run by the assessee is on renewable energy devices. Thus we restore this matter to the file of the Assessing Officer for denovo adjudication in accordance with law. The assessee is at liberty to produce such evidence as it may desire to establish that the cold storages of the assessee are run on renewable energy devices. Needless to say that the Assessing Officer shall be given adequate opportunity of being heard to the assessee.
9. In the result the appeal of the assessee is partly allowed for statistical purposes.
Order pronounced in the open court on the 07th July, 2017.
Sd/- Sd/- (N.K.PRADHAN) (C.N.PRASAD) ले खा सदस्य / न्यायिक सदस्य / ACCOUNTANT MEMBER JUDICIAL MEMBER मुुंबई / Mumbai; दिनाुं क / Dated 07/07/2017 VSSGB, SPS 5 ITA No.5018/Mum/2016 (A.Y. 2013-14) M/s. Robinsons Cargo & Logistics Pvt.Ltd
आदे श की प्रयियलयि अग्रे यिि / Copy of the Order forwarded to :
1. अपीलार्थी / The Appellant
2. प्रत्यर्थी / The Respondent.
3. आयकर आयुक्त(अपील) / The CIT(A), Mumbai.
4. आयकर आयुक्त / CIT
5. दवभागीय प्रदतदनदि, आयकर अपीलीय अदिकरण, मुुं बई / DR, ITAT, Mumbai
6. गार्ड फाईल / Guard file.
सत्यादपत प्रदत //True Copy// आदे शानुसार/ BY ORDER, सहािक िं जीकार (Asstt. Registrar) आिकर अिीलीि अयिकरण,मुुं बई / ITAT, Mum