Income Tax Appellate Tribunal - Ahmedabad
Soham Cold Storage Pvt. Ltd.,, ... vs Department Of Income Tax
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD BENCH "A"
BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND
SHRI N.S. SAINI, ACCOUNTANT MEMBER
Date of hearing: 29.03.10 Drafted on:29.03.10
ITA No.1905/AHD/2007
Assessment Year : 2004-2005
The I.T.O., Wd.8(2), Vs. The Principal Officer,
th
4 Floor, Ajanta Soham Cold Storage Pvt.
Comm., Center 'A' Ltd., 1, Laxmi Complex,
Wing, Ashram Road, Highway, Sabarmati,
Ahmedabad. Ahmedabad.
PAN/GIR No. : AAFCS2067M
(APPELLANT) .. (RESPONDENT)
Appellant by : Kumar Hrishikesh Sr. D.R.
Respondent by: None
ORDER
PER N.S.SAINI , ACCOUNTANT MEMBER :-
This is an appeal filed by the Revenue against the order of Learned Commissioner of Income Tax (Appeals)-XIV, Ahmedabad dated 07.02.2007.
2. Ground No.1 of the appeal reads as under:-
"1. The Learned Commissioner of Income Tax (Appeals)-XIV, Ahmedabad has erred in law and on facts in looking to the facts of the case, the CIT(A) ought to have upheld the decision of the Assessing Officer in allowing depreciation @ 10% only."
3. The Learned Commissioner of Income Tax(Appeals) has decided the issue as under:-
-2-"3.1 The second ground of appeal relates to disallowance of depreciation of Rs.12,18,640/-. The A.O. has allowed depreciation on cold storage building @ 10% instead of 25% claimed by the appellant. The appellant has claimed 25% on this by claiming that the cold storage building is an integral part of plant. After a detailed discussion in the asst. order, by relying upon the decision of Hon. Supreme Court in the case of Anand Theatres. 244 1TR
192. it was held by the AO that a building is essentially an asset, separate from plant and has also been categorically defined in the Act and there is no ambiguity in respect of treating building as a plant. The AO has. Therefore, allowed depreciation on this building @ 10%.
3.2 The appellant, during the course of appellate proceedings, has submitted that the cold storage is required to be constructed and maintained as to be damp proof, heat proof and protected against entry of or damage to the stored agriculture and other produce by pests, noxious insects, rats and other rodents. The same is to be provided with insulation of the floors, roofs and doors and insulation and water proofing treatment is to be done in a proper manner in accordance with cold temperature to he maintained below or above freezing point. The appellant has. therefore submitted that the storage or chamber itself is an apparatus and tool of the trade through which the business is carried on and the insulation without the building cannot produce the result and the building without the insulation also equally disastrous for the purpose. Therefore, it was contended that the cold storage plant is different from the other normal building because without the cold storage plant it is not possible to carry on the business of cold storage. In support of its contentions, the appellant placed several court decisions, such as 100 1TR 155-C1T v. Kanodia Cold Storage (All); 262ITR 568- CIT Vs. Shree Gopikishan Industries (Cal.) etc. It was further submitted by the appellant that the C1T (A) has deleted the addition made by the Assessing Officer for A.Y. 2003-04 on this count.
3.3 I have considered the facts of the case and the submissions of the appellant along with the case laws as relied upon. I am inclined to agree with the appellant's view that the storage or chamber itself is an apparatus and tool of the trade through which the business is carried on and the insulation without the building cannot produce the result and the building without the insulation also equally -3- disastrous for the purpose and hence, the depreciation @ 25% to this storage building is quite justified. By following the case laws, as relied upon and following the appellate order for earlier year. I hold that the cold storage building is eligible for depreciation @ 25% and the AO is directed to delete the disallowance made in this respect."
4. The Learned Departmental Representative relied on the order of the Learned Assessing Officer.
5. The Learned Authorised Representative of the assessee has filed an adjournment application seeking adjournment of the hearing on the ground that he is in United Kingdom and therefore unable to attend the hearing. The Bench was of the view that the appeal of the revenue can be disposed off without the assistance of the Learned Authorised Representative of the assessee. Hence, the appeal was heard ex-parte qua the respondent assessee and disposed off after considering the submission of the Learned Departmental Representative.
6. We have heard the Learned Departmental Representative and perused the orders of the lower authorities and the materials available on record. The assessee claimed depreciation @ 25% on cold storage building by considering the same as plant which was allowed by the Learned Assessing Officer @ 10% by treating the same as building relying on the decision of Supreme Court in the case of Anand Theaters 244 ITR 192. In appeal, the Learned Commissioner of Income Tax(Appeals) allowed the claim of the assessee following the decision of the Hon'ble Calcutta High Court in the case of CIT Vs. Shree Gopikishan Industries (Cal) 262 ITR 568 and the decision of the Allahabad High Court in the case of CIT Vs. Kanodia cold Storage 100 ITR 155 by observing as under:-
-4-"3.2 The appellant, during the course of appellate proceedings, has submitted that the cold storage is required to be constructed and maintained as to be damp proof, heat proof and protected against entry of or damage to the stored agriculture and other produce by pests, noxious insects, rats and other rodents. The same is to be provided with insulation of the floors, roofs and doors and insulation and water proofing treatment is to be done in a proper manner in accordance with cold temperature to he maintained below or above freezing point. The appellant has. therefore submitted that the storage or chamber itself is an apparatus and tool of the trade through which the business is carried on and the insulation without the building cannot produce the result and the building without the insulation also equally disastrous for the purpose. Therefore, it was contended that the cold storage plant is different from the other normal building because without the cold storage plant it is not possible to carry on the business of cold storage. In support of its contentions, the appellant placed several court decisions, such as 100 1TR 155-C1T v. Kanodia Cold Storage (All); 262ITR 568- CIT Vs. Shree Gopikishan Industries (Cal.) etc. It was further submitted by the appellant that the C1T (A) has deleted the addition made by the Assessing Officer for A.Y. 2003-04 on this count."
7. The Learned Departmental Representative merely relied on the order of the Learned Assessing Officer. Neither could he point out any specific error in the order of the Learned Commissioner of Income Tax(Appeals) nor could he cite any contrary decision of High Court or Supreme Court to that relied upon by the Learned Commissioner of Income Tax(Appeals). Therefore, we confirm the order of the Learned Commissioner of Income Tax(Appeals) and dismissed the ground of appeal of the revenue .
8. In the result, the appeal of the Revenue is dismissed.
Order pronounced in the Court at the close of the hearing on 29/03/2010.
Sd/- Sd/-
(BHAVNESH SAINI) ( N.S. SAINI )
JUDICIAL MEMBER ACCOUNTANT MEMBER
Ahmedabad; Dated 29.03.2010
-5-
Paras#
Copy of the Order forwarded to :
1. The Appellant
2. The Respondent
3. The CIT Concerned
4. The ld. CIT(Appeals)
5. The DR, Ahmedabad Bench
6. The Guard File.
BY ORDER,
स×याǒपत ूित //True Copy//
(Dy./Asstt.Registrar), ITAT, Ahmedabad