Income Tax Appellate Tribunal - Mumbai
Acit Cir 27(1), Navi Mumbai vs Atul Shivdas Ganatra, Mumbai on 30 November, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES "A", MUMBAI
BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER
AND
SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER
ITA No. A.Y. Appellant Respondent
Shri Atul Shivdas
Ganatra (HUF),
104, Kaveri Neelkanth
7250/Mum/16 2011-12 Valley, 7, Rajawadi Road,
Ghatkopar(E),
MUMBAI
ACIT, Cir-27(1), [PAN: AAAHA 1614 C]
MUMBAI
Shri Atul Shivdas
Ganatra,
103/104, Kaveri
7252/Mum/16 2011-12 Neelkanth Valley, 7,
Rajawadi Road,
Ghatkopar(E),
MUMBAI
[PAN: AABPG 2055 L]
Appellant By : Shri Ashish Kumar, DR
Respondent By : Shri Sashank Dundu, AR
Date of Hearing : 28-11-2018 Date of Pronouncement : 30-11-2018
ORDER
Per Mahavir Singh, Judicial Member:
These two appeals filed by the Revenue are directed against the orders of the Commissioner of Income Tax (Appeals)-25, Mumbai, dated 23-09-2016 & 27-09-2016 respectively. 2
ITA Nos. 7250 & 7252/Mum/2016
2. The only common issue in these two appeals of Revenue against the order of CIT(A), allowing additional depreciation for wind mills u/s. 32(1)(iia) of the Income Tax Act, 1961 [herein after referred to as 'Act']. For this, Revenue has raised identically worded grounds in both the cases of assessee. The facts and circumstances are also exactly identical and hence, we will take the grounds from ITA No. 7252/Mum/2016. The grounds raised by Revenue are as under:
"1. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred by allowing the additional depreciation for wind mills u/s. 32(1)(iia) for AY. 2011-12, when the same is allowed as per the provision of the Act and Memorandum to the Finance Act, 2012 in relation to AY. 2013-14 and subsequent assessment years only.
2. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred by relying on the decision of CIT Vs. VTM Ltd. (319 ITR 336), wherein the facts of the case were different being the case of textile manufacturer whereas the assessee is a trader and hence the decision relied upon is not applicable being distinguishable on facts".
3. We have heard rival contentions and gone through the facts and circumstances of the case. Briefly stated facts are that assessee is engaged in the business of trading in cotton bales and generation of power. During the course of assessment proceedings, AO noted that the assessee has claimed deduction u/s. 32(1)(iia) of the Act being additional depreciation on the 3 ITA Nos. 7250 & 7252/Mum/2016 wind mills, which were installed and commissioned during the year under consideration. According to AO, assessee is not eligible for additional depreciation for the reason that the assessee is not engaged in manufacturing/production of any article and moreover he is engaged in generation of power through wind mill and as per amendment brought into by the Finance Act, 2012 with effect from 01-04-2013 for the relevant AY 2013-14 which is retrospective. Aggrieved, assessee preferred an appeal before the CIT(A).
4. The CIT(A) allowed the claim of assessee by stating that this Plant & Machinery was installed in AY. 2010-11 i.e., wind mill having capacity of 1,800 KV and this was commissioned and put to use on or before 31-03-2011 at S.F. No. 348/P1, Vandhiya, Bhachau, Kutch, Gujarat. Assessee claimed the additional depreciation @ 10% in claimed depreciation in AY. 2011-12. The additional depreciation was claimed u/s. 32(1)(iia) of the Act for the reason that the assessee is engaged in manufacturing/production of any article or thing and this new Plant & Machinery was acquired before and installed before 31-03-2010. The CIT(A) followed the order of the ITAT in AY. 4
ITA Nos. 7250 & 7252/Mum/2016 2010-11 in ITA No. 4899/Mum/2014, order dated 26-08-2016 in assessee's own case.
5. We find that this issue is squarely covered by the decision of Co-ordinate Bench of this Tribunal in assessee's own case, wherein it was held as under:
"2.1 Next issue is with regard to additional depreciation of Rs.2,19,29,891/- on two windmills acquired and installed by assessee during the year, which was confirmed by CIT(A). As stated above, assessee is engaged in the business of generation of power. During the year two windmills were acquired and installed. Assessee claimed additional depreciation of Rs.2,19,29,891/- u/s.32(1)(iia). Assessing Officer disallowed same by relying of the decision of Tamilnadu Chlorates [2006] 98 ITD 1 (Chennai) (Trib.). CIT(A) upheld the disallowance by relying upon the explanatory notes (memorandum) to amendments as inserted by Fiance Act, 2012. The stand of assessee has been that ITAT Chennai Bench in Tamilnadu Chlorates (suupra) has been relied upon by Assessing Officer was not relevant to current scenario as dealt with the provisions of Section 80HHC of the Act and not with the provisions of Section 32(1)(iia) of the Act. Ld. Authorized Representative submitted that ITAT, Delhi Bench in case of N.T.P.C. vs. DCIT [2012] 54 SOT 177 (URO) (Delhi) (Trib.), considered this decision while dealing with the activity of generation of electricity with respect of additional depreciation u/s.32(1)(iia) and ruled in favour of assessee. Hon'ble Madras High Court in case of CIT vs. VTM Ltd. [2009] 319 ITR 336 (Mad.) (HC) examined the same issue and dismissed the revenue appeal seeking to disallow additional depreciation u/s.32(1)(iia) of the Act with respect of setting up a windmill by a manufacturer of textile goods. Thus, following the ratio of VMT Ltd.(supra) issue has been decided in favour of assessee with regard to addition depreciation u/s.32(1)(iia) of the Act. Hon'ble Supreme Court in case of CST vs. M.P. Electricity Board (AIR 1970 SC 732), held that the electricity generated by an assessee is an article or goods. The explanation to amendments (memorandum) as inserted by Finance Act, 2012 as relied upon by 5 ITA Nos. 7250 & 7252/Mum/2016 CIT(A) cannot be said to overrule and earlier decision of Hon'ble High Court. An amendment that has prospective application cannot be said to retrospectively take away the rights of an assessee qua it's explanatory notes. Where there is no ambiguity in the Section, there is no warrant for resort to external aids of interpretation namely the notes on clauses and the memorandum explaining its provisions. In the light of decision of VTM Ltd.(supra) with regard to claim of additional depreciation u/s.32(1)(iia) for setting up a windmill, wherein material being sole decision by Hon'ble High Court on the matter, we hold that additional depreciation should be allowed".
5.1. As the issue is squarely covered by the Tribunal's decision in assessee's own case for immediately preceding assessment year, additional depreciation has rightly been allowed by the CIT(A). Similar are the facts in the case of Shri Atul Shivdas Ganatra (HUF) in ITA No. 7250/Mum/2016. Accordingly, we dismiss both the appeals of Revenue.
Order pronounced in the open court on 30th day of November, 2018 Sd/- Sd/-
(MANOJ KUMAR AGGARWAL) (MAHAVIR SINGH)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Mumbai; Dated: 30th November, 2018
TNMM
6
ITA Nos. 7250 & 7252/Mum/2016
Copy of the Order forwarded to :
1. The Appellant
2. The Respondent
3. The CIT(A),Mumbai
4. The CIT
5. DR, 'A' Bench, ITAT, Mumbai
BY ORDER,
#True Copy #
Assistant Registrar
Income Tax Appellate Tribunal,
Mumbai