2013 (6) TMI 907 - AT - Income Tax

Tribunal Upholds Tax Decisions on Stone Bunds & Loans, Dismisses Revenue Appeals

The Assistant Commissioner of Income-tax, Central Circle I (4), Chennai Versus M/s. Jakhau Salt Co. Pvt. Ltd.

The Assistant Commissioner of Income-tax, Central Circle I (4), Chennai Versus M/s. Jakhau Salt Co. Pvt. Ltd. - TMI Issues involved: Appeal against orders of Commissioner of Income tax (Appeals) for assessment years 2004-05 and 2007-08.For the assessment year 2004-05:The Revenue appealed against the allowance of depreciation on stone bunds, arguing that stone bunds should not be treated as a separate asset eligible for depreciation at a different rate than salt pans. The Commissioner of Income-tax (Appeals) held that stone bunds are integral to salt pans and should be depreciated at 100% like salt pans. The Tribunal agreed, emphasizing the essential role of stone bunds in operating salt pans and dismissing the Revenue's appeal.For the assessment year 2007-08:The Revenue challenged the deletion of additions made under section 2(22)(e) of the Act for loans received from two companies. Regarding the loan from M/s. Archean Granites Pvt. Ltd., the Tribunal held that as the assessee was not a shareholder, section 2(22)(e) did not apply. For the loan from M/s. Goodearth Maritime Ltd., the Tribunal agreed with the Commissioner of Income-tax (Appeals) that it was a running account for business transactions and not a loan. Citing relevant case law, the Tribunal upheld the Commissioner's decision and dismissed the Revenue's appeal for the assessment year 2007-08.In conclusion, the Tribunal dismissed both appeals filed by the Revenue for the assessment years 2004-05 and 2007-08, upholding the decisions of the Commissioner of Income tax (Appeals) in both cases.