Income Tax Appellate Tribunal - Delhi
Ram Dhan Dass, Panipat vs Assessee
ITA NOS. 748, 749 & 901/DEL/2011
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "G" NEW DELHI
BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER
AND
SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER
I.T.A. No. 748/Del/2011
A.Yrs. : 2006-07
Sunil Kumar Garg, vs. Assistant Commissioner of Income
M/s Gupta Spinners, Tax,
Shiv Nagar, Panipat Circle, Palika Bazar,
Panipat Panipat
(PAN : AAPPG0178E)
I.T.A. No. 749/Del/2011
A.Yrs. : 2006-07
Ram Dhan Dass, vs. Assistant Commissioner of Income
M/s R.D. Shipping Mills, Tax,
Shiv Nagar, Panipat Circle, Panipat
Krishnapura, Panipat (Haryana)
(PAN : AAKPD3623Q)
AND
I.T.A. No. 901/Del/2011
A.Yrs. : 2006-07
Siya Ram Garg (HUF), vs. Assistant Commissioner of Income
M/s Vicky Spinning Mills, Tax,
Shiv Nagar, Panipat Panipat Circle, Palika Bazar,
(PAN : AACHS2495B) Panipat
(Appellants
(Appellants) (Respondents
(Respondents )
Asseessee by : Sh. Satish Kumar Goel, Advocate
Department by : Sh. Kishore B. (D.R.)
ORDER
PER SHAMIM YAHYA : AM These appeals by separate assessees are directed against common order passed by the Ld. Commissioner of Income Tax 1 ITA NOS. 748, 749 & 901/DEL/2011 (Appeals) dated 2.12.2010 and pertaining to assessment year 2006-
07. These appeals are being disposed of by this common order.
2. One common issue raised is that Ld. Commissioner of Income Tax (Appeals) erred in confirming that the grant of Agro based capital subsidy received by the assessees was not exempt and the grant received related to assets, hence only entitled to depreciation by invoking Explanation 10 to Section 43 of the IT Act.
3. On this issue the Assessing Officer noted that assessee has received capital subsidy which has been credited in the capital account by the assessee directly. By way of explanation assessee stated that the same was capital receipt. Assessing Officer held that the contention of the assessee may be correct that it was capital receipt. But he invoked the proviso below Explanation 10 to section 43 and deducted the subsidy amount from the WDV of assets proportionately and accordingly, claim of depreciation was allowed at lower amount.
4. Upon assessee's appeal Ld. Commissioner of Income Tax (Appeals) confirmed the Assessing Officer's action.
5. Against the above order, assessees are in appeal before us.
6. We have heard the rival contentions in light of the material produced and precedent relied upon. Ld. counsel of the assessee averred that the same subsidy was granted earlier and on part of the same subsidy in assessment year 2004-05, the matter had travelled to the High Court and the issue was decided in favour of the assessee wherein Revenue's claim that it was revenue receipt was rejected. Ld. Counsel for the assessee has referred to the paper book filed in the case of Siya Ram Garg (HUF). Therein, copy of written submissions 2 ITA NOS. 748, 749 & 901/DEL/2011 dated 8.3.09 filed by the assessee before the CIT(A) is placed at pages 1-2; copy of letter dated 12.10.09 filed by the assessee before the CIT(A) in response to the letter dated 4.10,09 is placed at pages 3-4; rejoinder dated 229.09 to the copy of comments of the AO, is at pages 5-6; copy of ITAT, 'F' Bench order passed in I.T.A. No.4303/Del/07 in the case of Siya Ram Garg(HUF) is at pages 7-23, copy of order dated 14.12.10 of the Hon'ble Punjab & Haryana High Court in I.T.A. No.679 of 2010 dismissing the appeal preferred by the department against the aforesaid order of the Tribunal is at pages 24-25; and a copy of the affidavit of Siya Ram Garg,(HUF). On the other hand, Ld. A.R. for the assessee strongly supported the order under appeal. Shri Ram Dhan Das, R/o Panipat, Karta of Siya Ram Garg(HUF) with regard the facts of the case is at pages 29-30. In the affidavit mentioned at last, Shri Siya Ram Garg has deposed, inter alia, that neither the Tribunal nor the Hon'ble P&H High Court invoked the Explanation 10 of section 43(1) in respect of Agro based subsidy received in assessment year 2004-05, granted vide sanction dated 27.1.95; and that in assessment year 2006-07, the agro based subsidy is the same subsidy which was sanctioned on 12.11.95 and only the balance installment was received during the year 2006-07, otherwise which was part of same subsidy which was matter of appeal before the Hon'ble High Court/ITAT in assessment year 2004-05.
6.1 Ld. Departmental Representative on the other hand claimed that the issue earlier was not looked upon from the point of view to Explanation 10 to Section 43.
3ITA NOS. 748, 749 & 901/DEL/2011 6.2 We have carefully considered the issue. We note that ld. counsel of the assessee has also produced before us a certificate which reads as under:-
"To whom it may concern"
This is to certified that a cheque No. 086469 amounting to ` 30,00,000/- (Rupees thirty lacs only) on account of Agro Based susidy was disbursed to M/s RD Spinning Mills, Shiv Nagar Krishanpura Panipat on dated 20.10.2005. The subsidy was sanctioned in the year 1995. This was Agro Based Subsidy not against any assets.
To Sd/-
Prop. Ramdhan Dass Joint Director
M/s RD Spinning Mills, District Industries Center
Shiv Nagar, Krishanpura, Panipat
Panipat
No. DIC/PNP/Agro Based Sub/1109 Dated 21.4.2011"
6.3 We note that the above certificate is a very crucial document and the same was not available before the authorities below. Both the counsel fairly agreed that in view of the above, this issue may be sent to the file of the Assessing Officer to decide the issue afresh, in light of the above said document. Accordingly, the issue stands remitted to the files of the Assessing Officer .
7. One issue raised in the case of Ram Dhan Dass (ITA No. 749/Del/2011) that Ld. Commissioner of Income Tax (Appeals) erred in enhancing income by way of disallowing additional depreciation of ` 388112/- allowed by the Ld. ACIT claimed during the course of assessment proceedings on new machinery additions.
4ITA NOS. 748, 749 & 901/DEL/2011
8. On this issue assessee had been provided additional depreciation amounting to ` 388112/-, by the Assessing Officer.
9. Ld. Commissioner of Income Tax (Appeals) noted that the additional depreciation was not claimed in the return of income and it was claimed during the course of assessment. Hence, in the opinion of the Ld. Commissioner of Income Tax (Appeals), the Hon'ble Supreme Court in the case of Goetze India Ltd. Vs C.I.T. 284 ITR 323 applies. Accordingly, additional depreciation amounting to ` 388112/- allowed by the Assessing Officer was held to be not available.
10. Against the above order the assessee is in appeal before us.
11. Ld. counsel of the assessee claimed that the assessee was duly entitled for the claim by depreciation and he claimed that it was mandatory on the part of the Assessing Officer to grant the assessee depreciation, which was legally eligible. In this connection, ld. counsel of the assessee referred to the provisions of section 32(1)(iia) read with section 32(1) Explanation 5.
11.1 Ld. Departmental Representative on the other hand relied upon the orders of the Ld. Commissioner of Income Tax (Appeals).
12. We have carefully considered the submissions and perused the records. We find that Article 265 of the Constitution of India states that no tax can be collected except by authority of law. CBDT Circular No. 114 XL-35 of 1955 dated 11.4.1955 states that officer of the department must not take advantage of the ignorance of an assessee as to his rights. Hon'ble Apex Court in the case of CIT Vs. Mr. P. Firm in 56 ITR 67 wherein the Bench comprised three of their Lordships had 5 ITA NOS. 748, 749 & 901/DEL/2011 expounded that if a particular income is not taxable under IT Act, it cannot be taxed on the basis of estoppel of any other equitable doctrine.
13. In the background of the aforesaid discussion, we hold that Assessing Officer has rightly allowed the claim of depreciation and accordingly, we set aside the order of the Ld. Commissioner of Income Tax (Appeals) on this issue and restore to that Assessing Officer.
14. Another issue raised in the case of Ram Dhan Dass (ITA No. 749/Del/2011) is that Ld. Commissioner of Income Tax (Appeals) erred in confirming the disallowance of interest of ` 1,25,000/- for alleged non-charging of interest from M/s Gupta Spuntex.
15. On this issue at the out set, ld. counsel of the assessee submitted that in an identical situation, the Tribunal in ITA no. 1285 for A.Y. 2006-07 remitted the matter to the file of Assessing Officer to examine the proposition whether any non-interest bearing funds were utilized for making the impugned advance.
16. Again in ITA No. 1067 for A.Y. 2006-07 the Tribunal vide order dated 12.2.2010 had remitted the matter to the file of the Assessing Officer to examine whether only non-interest bearing funds were utilized for advancing interest free funds. Since this issue was decided in assessee's group cases, both the counsel fairly agreed that the issue may be remitted to the file of the Assessing Officer to examine as to whether the claim of the assessee is correct that non-interest bearing funds were utilized for making the advance.
6ITA NOS. 748, 749 & 901/DEL/2011
17. In ITA No. 748 (Sunil Kumar Garg), the grounds raised read as under:-
"That the order of the Ld. Commissioner of Income Tax (Appeals) in upholding excessive disallowance of 1/5th car expenses at ` 49772/- is arbitrary and uncalled for.
That the Ld. Commissioner of Income Tax (Appeals) has further erred in upholding excessive disallowance of ` 19744/- out of telephone expenses which is arbitrary and uncalled for."
18. Ld. counsel of the assessee pleaded before us that he shall not be pressing these grounds. Accordingly, these grounds are dismissed as not pressed.
19. In this result, all the appeals by the separate assessees stand allowed for statistical purposes.
Order pronounced in the open court on 29/04/2011 upon conclusion of hearing.
Sd/-
Sd/- Sd/-
Sd/-
[A.D. JAIN]
JAIN] [SHAMIM YAHYA]
JUDICIAL MEMBER ACCOUNTANT MEMBER
Date 29/4/2011
SRB
Copy forwarded to: -
1. Appellant 2. Respondent 3. CIT 4. CIT (A)
5. DR, ITAT
TRUE COPY
By Order,
Deputy Registrar,
ITAT, Delhi Benches
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