TaxTMI 
TaxTMI 
2017 (9) TMI 1952
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....ted illegally and perversely and was justified in allowing the benefit of depreciation of Rs. 38,06,352/- u/s 32 of the Act on the machineries which were not put to use before the end of the previous year i.e. 31.3.2001. (ii) Whether in the facts and circumstances of the case, the ITAT has acted illegally and perversely in deleting the additions on account of excessive wastage which was restricted to 20% by the AO by invoking the provisions of Sec.145(3) of the Act. (iii) Whether in the facts and circumstances of the case, the ITAT has acted illegally and perversely and has grossly erred in deleting the addition of Rs. 2,61,232/- on account of valuation of the closing stock as per provisions of Sec. 145A." 3.2 Appeal No.88/2011 admitted on 30.7.2012 1. "Whether in the facts and circumstances of the case, the ITAT has acted illegally and perversely and has grossly erred in deleting the additions on account of excessive wastage which was rightly and on the basis of record restricted to 20% by the Assessing Officer?" 3.3 Appeal No.194/2016 admitted on 15.11.2016 "1. Whether in the facts and circumstances of the case, the ITAT was justified in ....
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....an independent agency having expertise in the related filed." 3.7 Appeal No.15/2017 admitted 7.2.2017 "1. Whether in the facts and circumstances of the case, the ITAT was justified in deleting trading of Rs. 2,95,65,756/- ignoring the fact that the Assessing Officer made addition reasonably and rejected books of accounts pointing out specific defects in the books of accounts." 4. The facts of the case are that the assessee company to derive income from manufacturing and sale of corckery ware. In the trading account the assessee has shown gross profit of Rs. 1,45,81,178/- on total sales (excluding excise duty) at Rs. 5,25,05,366/- thus declare GP rate @ 27.77% as against GP @ 27.92% in the immediately preceding year on total sale of Rs. 4,18,50,282/- and @ 29.34% during the period relevant to the assessment year 1999-2000 reasons of decline in gp ratio as per the submissions of the assessee vide its' A/R's letter dt. 19.8.03 was increase in repair and maintenance expenses. 4.1 In order to look into the reality, production results of the assessee were examined, in view of its consumption of raw material and production there from. To begin with the assessee's p....
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....AO Pg 29-30 Pr 28 (PB 42- 43) CIT (A) Pg 32-34 Pr 9.1-9.4 (PB 79-81) ITAT Pg 17 Pr 21-22 (PB 100) Admitted Q. Of Law 3 Amount Rs. 2,61,232/- 4. Deleting on account of incorrect deductions of MODVAT credit. AO Pg 30-31 Pr 29 (PB 43-44) CIT(A) Pg 34-35 Pr 10-10.3 (PB 81-82) ITAT 4 Admitted Q.Of Law Amount Rs. 1,01,604/- 5. Deleting the addition made for depositing employee's contribution to PF & ESI beyond the prescribed time limit AO CIT(A) ITAT Admitted Q. Of Law 3 & 4 Amount Rs. 4,29,345/- 6. Counsel for the appellant Mr. Mathur has taken us to the order of the AO, who after considering the evidence on record has observed as under:- "23. On careful consideration I do not find the assessee's submission convincing because as discussed in this order in the foregoing paragraphs that the assessee has furnished a copy of certificate of Shri R.L Sharma, its Pla....
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.... i.e. 28.03.2001. This purchase of 6000 bricks was in addition to 4000 bricks purchased by the assessee from the same supplier i.e. M/s Nav Rang Refractories Pvt. Ltd. Vide his bill No. 128 dt. 21.03.2001. It is worthwhile to mentioned here that 7000 kg insulation bricks mentioned in bill dated 21.03.2001. On the basis of these facts it can be safely inferred that basic material of furnace was being issued upto 28.03.2001, what to say about completion of the work and commissioning of 45 mtr long furnace on 28.03.2001 as claimed by the assessee." 6.1 He further contended that depreciation has been claimed in view of Section 32(1) and provision for machinery was not put to use. The same was also approved by the CIT(A) in para no.6.15 which reads as under:- S.N. Dt. of entry Particulars Bill no. Dt. of bill Item name Amount 1 22.3.01 Themo technology Pvt Ltd TPI/345 19.3.01 Cerachem Blanket Rs. 439984 2 22.3.01 -do- TPI/346 19.3.01 Cera blanket Rs. 124938 3 22.3.01 Gadia 15144 15.3.01 DS -100 Rs. 26779 4 22.3.01 -do- 15162 16.3.01 Different type MCCB Rs. 57259 5 22.3.01 ....
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....#39; in Section 32 of the Income Tax Act, 1961, denotes that the asset has been actually used and not that it is merely ready for use. The expression 'used' means actually used for the purposes of the business, A Special Leave Petition filed against the said Judgment stood dismissed MANU/WB/0214/2003MANU/WB/0214/2003 : [2004]266ITR106(Cal) . We are in agreement with the views expressed by the Bombay, Calcutta and Madhya Pradesh High Courts. In the light of these Judgments directly available on record, we are of the view that the kept ready theory is not available to the assessee for the purpose of claiming depreciation when the Legislature has chosen to use the word 'used' we have to give a full meaning to it and avoid reading something not intended by the Legislation. After all, these benefits are provided for certain purposes. That purpose is used in terms of the Statute. If the machinery is not used, Section 32 is not applicable and hence, the assessee cannot have any benefits, if granted would result in reading something which is not provided in the Statute in terms of Section 32." 7. Counsel for the respondent Mr. Gargeiya has taken us to the order of ....
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....tative details of work in progress and in such circumstances, we do not find any reason that the said machine is not put to use during the impugned year and therfore, we reverse the findings of the ld. CIT (A) and direct the AO to allow the depriciation of Rs. 13,59.029/- as claimed by the on continuous pusher type machine. Thus Ground No. 2 and of the Revenue are dismissed and Ground No. 2 of the assessee is allowed. 25. WE have perused the facts of the case. The explanation of the assessee was that the as per accounting standard closing stock of raw material was to be valued exclusive of excise duty as the assessee was claiming MODVAT. AS such, the income was overstated on account of inclusion of excise duty in the value of the closing stock of raw material for the F.Y. 2000-01 i.e. for the impugned year was valued exclusive of excise duty and the said amount of Rs. 1,01,604/- was on account of the said reason. The excise duty has already been paid more than it was due in the assessment year 2000-01 and there was no justification to add the said amount into the total income of the assessee. In such circumstances and facts of the case, when the closing stock does not include the e....
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....cultural assessment at the rate specified for land used for industrial purpose." In other words, given the background in which the question arose, the interpretation placed on the word 'used' was in favour of the Assessee. 8.2 In Anil Bulk Carriers (P) Ltd. vs. Commissioner of Income Tax (26.10.2004 - ALLHC) : MANU/UP/1030/2004 it has been held as under:- 5. The appellant-assessee took delivery of complete tankers along with body mounted on the chasis on 26th March, 1997, from Motor and General Sales, Allahabad. The sale certificates issued by the selling dealer are on record. The authorities below have not accepted the case of the assessee-appellant about the use of trucks in question on the ground that the assessee could not produce the documents to show that these tankers were used by the appellant-assessee on the last day of the previous year. The assesseeappellant submitted that these two oil tankers were, in fact, challaned by Chakeri police on 31st March, 1997, at 4.00 PM, at Ramadevi Chauraha. Copies of these challans were produced before the AO. The orders passed by the C.M.M., Kanpur, were also produced before it, but were not accepted on the ground th....
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...."use", even trial production of a machinery would fall within the ambit of "used for the purpose of business". Further, as the statute does not prescribe a minimum time limit for "use" of the machinery, the assessee cannot be denied the benefit of depreciation on the ground that the machinery was used for a very short duration for trial run. 38. In the instant case, the Tribunal, on appreciation of evidence, arrived at a conclusion that plant and machinery was used from March 26, 1993, till the end of the accounting year, i.e., March 31, 1993. The Tribunal also found that grey cotton was manufactured and with the permission of the authorities of Kandla Port Trust, the material was disposed of. Thus, use of machinery is not in doubt. 39. We are, therefore, of the opinion that when there is commencement of the business by way of production of the articles, it can be said that the assessee is entitled to depreciation. 9. Regarding Question no.2 he has relied upon the decision of CIT vs. Cermatic 9.1 In Commissioner of Income Tax vs. Ceramic Industries and Ors. on 25.5.2017, it has been held as under:- 7. Taking into consideration the tribunal has obser....
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....Officer was that the sister concern M/s. Bharat Potteries Ltd. has declared more yield and more gross profit, has also been explained by the assessee vide the same letter dated March 26, 2004. Therefore, the inconsistency in the input/output ratio in various months the reasons for which has been explained by the assessee, cannot be the basis for rejection of books of account. The yield and gross profit rate declared by the assessee can also not be the basis for rejection of books of account since M/s. Bharat Potteries Ltd. is manufacturing maximum of stoneware crockery and for many other reasons which were explained by the assessee vide its letter dated March 26, 2004 which was ignored by the Assessing Officer and the Assessing Officer has not pointed out any specific defects in the purchases, sales, opening stock and closing stock of the assessee and the Assessing Officer has not brought on record any cogent material to prove that the assessee has sold the underproduction out of the books of account. Therefore, in such circumstances and facts of the case, the Assessing Officer is not justified in rejecting the books of account by invoking the provisions of section 145(3) of the Ac....
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....ere answered in favour of the Revenue and against the assessee. An application made for certificate to appeal to this court under Section 261 of the Act was rejected by the Calcutta High Court by observing "we are unable ourselves to burden an already over burdened Hon'ble Supreme Court". Being aggrieved, the assessee impugns both judgments of the Calcutta High Court pertaining to the three assessment years, by these appeals. 6. There is no doubt that the judgment of the Gujarat High Court in Lakhanpal National Ltd.'s case is completely in favour of the assessee as it accepts the contention of the assessee in toto. It is not in dispute that the decision in Lakhanpal National Ltd.'s case was not challenged by the department before this court and thus has been accepted by the department. The interpretation placed on Section 43B in Lakhanpal National Ltd.'s case was directly followed by the judgment of the Bombay High Court in CIT v. Bharat Petroleum Corporation Ltd., MANU/MH/0505/2001MANU/MH/0505/200 1 : [2001] 252 ITR 43 and by the Madras High Court in Chemicals and Plastics India Ltd. v. CIT, MANU/TN/1743/2002MANU/TN/1743/2002 : [2003] 260 ITR 193. These tw....
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....rontation of the situation under Section 145 vis-à-vis Section 145A and therefore, we need address ourselves in the present matter as to what is the scope and ambit of Section 145 and Section 145A. But, even if the contention of the Revenue is considered for the sake of examination for providing a particular or peculiar method for accounting under Section 145 as well as under Section 145A, then also as per language used of non-obstante clause over any other provisions of the Act under Section 43B, it cannot be accepted that by virtue of Section 145A, the Parliament has diluted or nullified the effect of provisions of Section 43B providing for certain deductions. 21. Under the circumstances, we find that the distinction as sought to be canvassed to come out from the law already settled by the Apex Court in case of Berger Paints referred supra is without any substance and cannot be accepted. 22. In view of the aforesaid observations and discussion, the resultant situation would be that the deduction so claimed and made permissible by the Tribunal in the impugned order is covered by the above referred decision of Gujarat High Court in case of Lakhanpal c....
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.... the above, the appeal stands dismissed. 10.5 In CIT vs. Pr. Officer JVVNL in ITA No.579/2008 decided on 26.5.2017, it has been held as under:- 5. Issue No.2, counsel for the respondent has relied upon the decision of this Court in Ajmer Vidhut Vitran Nigam Ltd. Vs. Authority for Advance & Ors., in D.B. Civil Writ Petition No. 20195/2012, decided on 19th October, 2016, wherein it has been observed as under: "2. Counsel for the petitioner relied on the provisions of Section 194C and 194J which reads as under :- 194C. (1) Any person responsible for paying any sum to any resident (hereafter in this section referred to as the contractor85) for carrying out any work85(including supply of labour for carrying out any work) in pursuance of a contract between the contractor and a specified person shall, at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to- (i) one per cent where the payment is being made or credit is being given to an individual or a Hindu undivided family; (ii) two percent where the paym....
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.... the Act. 4. However counsel for the petitioner Mr. Jhanwar contended that the issue is concluded in view of the following decisions : 1. Commissioner of Income Tax Vs. Bharti Cellular Ltd. (2011) 330 ITR 239 (SC), 2. Union of India Vs. Satish Panalal Shah (2001) 249 ITR 221 (SC), 3.Commissioner of Income Tax Vs. Jaipur Vidyut Vitran Nigam Ltd. D.B. ITA No. 579/2009, High Court of Judicature for Rajasthan, Jaipur 4. Commissioner of Income Tax Vs Bharti Cellular Ltd (2009) 319 ITR 139 (Del.), 5. Skycell Communications Ltd. and Anr. Vs Deputy Commissioner of Income Tax and Ors. (2001) 251 ItR 53 (MAD.), 6. M.S. Jewellery Vs. Assistant Commissioner (ASSESSMENT) Agricultural Income Tax and Sales Tax and Anr. (1994) 208 ITR 531 (KER.), 7.CIT vs. Maharashtra State Electricity Distribution Co. Ltd., (2015) 119 DTR (BOM) 278, 8. Commissioner of Income Tax-II and Ors. Vs Delhi Transport Ltd. Manu/ DE/ 2199/2015. 5. We have heard learned counsel for the parties. 6. In view of the fact that issue is concluded by decision of Bombay High Court and Delhi High Court and SLP against the same has been dismissed. In that view of the matter the issues are required ....
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.... - I (Appendix-I) की 100 पà¥à¤°à¤¤à¤¿à¤¶à¤¤ हास दर में आता है। अपील की सà¥à¤¨à¤µà¤¾à¤ˆ के दौरान करीब - करीब वही दलीले दीं, जो नि. अ. के सामने दी गई थी। नि.अ. ने विशेषतौर से शà¥à¤°à¥€ आम पà¥à¤°à¤•à¤¾à¤¶ ठेकेदार के बयान दिनांक 24.3.2004, शà¥à¤°à¥€ à¤.बी. शरà¥à¤®à¤¾, बी.टेक., अहमदाबाद के बयान दिनांक 24.3.2004 और शà¥à¤°à¥€ आर.....
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....ीब 45 मीटर लंबी, करीब 5.6 फीट ऊंची तथा करीब 7 फीट चौड़ी गोलाकार à¤à¤Ÿà¥à¤Ÿà¥€ बनाकर देनी थी, जो 7-8 कारीगरों तथा 7-8 बेलदारों को लगाकर दिनांक 24.3.2001 को पूरा कर दिया था, उसके बाद उसे पता नहीं, लेकिन फेबà¥à¤°à¥€à¤•à¥‡à¤¶à¤¨ का काम साथ-साथ ही होना बताया। शà¥à¤°à¥€ ओम पà¥à¤°à¤•à¤¾à¤¶ न....
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....¤–िरी बार मारà¥à¤š, 2001 के अंतिम सपà¥à¤¤à¤¾à¤¹ में गया था, जब लाइनिंग वरà¥à¤•, से समिक का फिंटिंग वरà¥à¤•, बà¥à¤²à¥‡à¤‚केट, बरनौल फिटिंग का काम पूरा नहीं हà¥à¤† था, उसके Document 2 बाद सिरà¥à¤« उतà¥à¤ªà¤¾à¤¦à¤¨ में लीकेज की समसà¥à¤¯à¤¾à¤à¤‚ देखने गया था, जिसके बारे में कोई तारीख बयान में नà....
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....¤¿ मà¥à¤–à¥à¤¯ रूप से सिविल वरà¥à¤• के पूरे होने के बाद ही इनà¥à¤¸à¤Ÿà¤¾à¤²à¥à¤¡ किठजा सकते हैं और अंत में पà¥à¤°à¤¶à¥à¤¨ - 57 के जवाब में बताया कि फरनेश की टनल में 12 बरà¥à¤¨à¤° तथा 8-9 बà¥à¤²à¥‹à¤µà¤°à¥à¤¸ फिकà¥à¤¸ स किठà¤à¤²à¥‡ जिनमें कमी से करीब 2 महीने का समय चाहि । जहां तक है । क 4000 ईटें मैं.....
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....े आखिरी सपà¥à¤¤à¤¾à¤¹ में अपीलारà¥à¤¥à¥€ की फैकà¥à¤Ÿà¥à¤°à¥€ की विजिट में कà¥à¤› काम शेष होना बताया, लेकिन ईटों की खरीद तथा सà¥à¤Ÿà¥‰à¤• रजिसà¥à¤Ÿà¤° के पेज- 281 की जांच पर नि.अ. ने पाया कि 6000 ईटों मैं नवरंग सेरामिकà¥à¤¸ से बिल नंबर 130 दिनाक 28.3.2001 से खरीदी तथा 4000 ईटों मैं. नवरंग रà¤....