TaxTMI 
TaxTMI 
2018 (12) TMI 628
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....reproduced as under: "That, on the facts and circumstances of the case and in law, the Ld. Commissioner of Income-tax (Appeals)-IX, New Delhi ["CIT(A)"], erred in concurring with the view of the assessing officer and thereby upholding the disallowance of excess depreciation (of Rs. 27,28,319/-) and additional depreciation (of Rs. 1,09,13,279/-) aggregating to Rs. 1,36,41,598/- claimed by the appellant, on the ground that the electrical fittings are covered under the category of 'Furniture and Fixtures' and do not form part and parcel of 'Plant & Machinery'." 2.1 The grounds raised in ITA No.5754/Del/2014 by the Revenue are reproduced as under: 1. Whether on the facts and circumstances of the case & in law, the Ld. CIT(A) erred in deleting the disallowance made by the AO of Rs. 27,75,932/- by grossly ignoring the reasons advanced by the assessing officer and totally relying upon the decision of his predecessor in assessee's case for earlier assessment years? 2. Whether on the facts and circumstances of the case & in law, the Ld. CIT(A) erred in allowing relief to the assessee by deleting the disallowance of depreciation claim of the assessee on building amounting to Rs. 1....
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.... clarified to include electrical wiring, switches, sockets, other fittings and fan etc. Thus, in view of the Assessing Officer, the 'electrical installation' was eligible for depreciation at the rate of 10% only. He worked out the excess depreciation disallowable amounting to Rs. 27,28,319/-. Further, the Assessing Officer observed claim of the assessee of additional depreciation at the rate of 20% on the above 'electrical installation'. According to the Assessing Officer, as per section 32(iia) of the Act additional depreciation is allowable only on new plant and machinery and the electrical installation not being part of plant and machinery, the additional depreciation was not allowable. Accordingly, he disallowed the claim of the additional depreciation of Rs. 1,09,13,279/- of the assessee. 4.2 Before the Ld. CIT(A), the assessee submitted that the assets under the category of electrical fitting comprised of electrical transformer and its fittings, industrial lighting, plugs, site electricity cost, which are part and parcel of plant and machinery. The assessee submitted that accounts of the assessee were audited by a reputed firm affiliated to "Price Water House Coopers" and ....
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....oduced as under: Type of Expenses Vendor S.No. Amount (Rs) Plant Automation expenses Vendor S.No 1 2,90,53,003 Control Cable and Power Work to integrate and connect the assembly line, Power Factor Automation and High Voltage Installation work Power Charges paid to Uttar Gujarat Vidyut Board and Gujarat Electricity Board during Plant commissioning and Trial runs Vendor S.No 2, 3 and 4, Vendor S.No 5 and 10 1,83,10,329 27,93,404 Heat Trace System for full assembly line - Supply and Supervision costs Vendor S.No 6 and 11 21,14,712 Electrical Engineering Design Costs Vendor S.No 9 554,912 Labour costs for Electrical Work Vendor S.No 7 611,317 Other electrical work connected to Plant and Machinery Set up. Vendor S. No 8 and 12 to 20 13,33,318 GRAND TOTAL 5,47,70,995 4.5 The claim of the assessee that these items of electrical fittings form part of "plant and machinery" whereas according to the Revenue same falls under the category of "furniture and feature". It is evident from the above table that expenses have been incurred on power charges paid to Gujarat electricity board, engineering design and labour cost for electrical work. On perusal of page 39 to 40 of....
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....ission of the appellant are considered. As held by AO, the issue allowability of seed development/agronomy expenditure as Revenue expenditure has never became final as the issue has not been decided on merits by the higher judicial authorities. However, there is no reference made to the Hon'ble High Court against the order of the Hon'ble ITAT in assessee's case for A Y. 2006-07. Thus, as on date, as per record, the order of my Ld. Predecessor CIT(A) and the order of the Hon'ble ITAT on this issue is good in law. If there is any decision received from the Hon'ble High Court on this issue, the AO may follow the decision accordingly. In the order of Ld. CIT(A) for A.Y 2006-07 in assessee's own case, it is held that since the potatoes grown have been sold for more than Rs. 2 crores and the receipt is offered for taxation, this is a trading operation and accordingly, the expenses incurred should be considered as revenue. Confirming the order of Ld. CIT(A), the Hon'ble ITAT in ITA No. 4671/Del/2009 vide order dated 28.02.2011, it is held that, "it can be very well concluded that these expenses are directly related to the business activity of the assessee. Hence, the expenditure involved ....
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....ng Officer. The Assessing Officer objected to admission of the additional evidences but he did not furnish any comment on the merit of the additional evidences. The Ld. CIT(A) accepted the additional evidences, however, did not provide opportunity to the Assessing Officer to give his comment on the merit of the additional evidences. The relevant finding of the Ld. CIT(A) on the issue in dispute is reproduced as under: "7.3 The reason given by AO, and the submission of the appellant are considered. The appellant submitted four documents to prove the case. i. Copies of electricity bills ii. Letter to Dy. Director, Industrial Safety & Health written by appellant iii. Copy of Machinery Installation Certificate by a Chattered Engineer. iv. A copy of the certificate given by Chattered Engineer regarding completion of the building as on 20.03.2007. The documentary evidences to substantiate the claim of depreciation on the building submitted u/r 46A are admissible at the appellate stage as the appellant as these documents are crucial for deciding the case. The documents furnished by the appellant can be admitted under Rule 46A to decide the issues involved on merit. In the case....
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...., submitted that the Ld. CIT(A) duly forwarded the additional evidences filed by the assessee to the Assessing Officer, and, therefore, the Ld. CIT(A) cannot be faulted for deciding the issue after considering the submissions of the assessee. 6.4 We have heard the rival submissions and perused the relevant material on record. The undisputed fact in the case is that the Assessing Officer objected admission of additional evidence and the Ld. CIT(A) after admitting the additional evidences, has not sought any comment from the Assessing Officer on the merit of the additional evidences. In identical circumstances, the Hon'ble Delhi High Court in the case of Manish Buildwell P. Ltd. (supra) has observed as under: "24. In the present case, the CIT(A) has observed that the additional evidence should be admitted because the assessee was prevented by adducing them before the AO. This observation takes care of cl. (c) of sub-r. (1) of r. 46A. The observation of the CIT(A) also takes care of sub-r. (2) under which he is required to record his reasons for admitting the additional evidence. Thus, the requirement of sub-rs. (1) and (2) of r. 46A have been complied with. However, sub-r. (3) whi....
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....e CIT(A) who shall comply with the requirements of r. 46A and take a fresh decision on the merits of the addition in accordance with law." 6.5 In view of the above decision, the matter required to be restored to the file of the Ld. CIT(A) for complying the requirements of Rule 46A(3) and provide opportunity to the Assessing Officer. However, while dealing with the earlier ground, we have restored the issue in dispute involved in that ground to the file of the Assessing Officer. Thus, to avoid simultaneous proceedings at multiple levels, we feel it appropriate to restore this issue also to the file of the Assessing Officer along with direction to the assessee to produce all evidences on the issue in dispute before the Assessing Officer. The Assessing Officer, thereafter may decide the issue in dispute in accordance with law after providing adequate opportunity of being heard to the assessee. The ground No. 2 of the appeal of the Revenue is accordingly allowed for statistical purposes. 7. Grounds no. 3 & 4 are general in nature, hence not required to adjudicate upon. ITA No.4977/Del/2014 8. Now, we take up the appeal of the assessee having ITA No. 4977/Del/2014 for assessment yea....