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DCIT, Circle – II, Moradabad Versus Designco, Gaishaheed and Other and Vica-Versa

2015 (9) TMI 1181 - ITAT DELHI

Addition made by the AO on account of deduction u/s 80HHC on DEPB - CIT(A) deleted the addition - Held that:- Respectfully following the ratio laid down by the Hon’ble Supreme Court in the aforesaid referred to judgment [2015 (4) TMI 193 - SUPREME COURT] do not see any merit in this ground of the departmental appeal wherein held that we find that in essence the High Court has quashed the severable part of third and fourth proviso to sec. 80HHC (3) and it becomes clear therefrom that challenge wh .....

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enue.

Disallowance on account of depreciation - CIT(A) deleted the addition - Held that:- In the present case, it is noticed that the disallowance of depreciation on vehicles was restricted by the ld. CIT(A) to the extent of 6% by following the decision of the ITAT in assessee’s own case for the preceding assessment year 2001,2002, during the course of hearing, nothing contrary to the said decision was brought on record. Therefore, we do not see any valid ground to interfere the findi .....

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ious details which were called for and were duly submitted by the assessee. Therefore, the impugned addition was also rightly deleted by the ld. CIT(A).The remaining addition on account of depreciation on Plant and Machinery was also made by the AO by assuming the installation date to be post 30.9.2001 while the ld. CIT(A) categorically stated that the assessee furnished all the details called for with proper evidences and after being satisfied, he deleted the addition made by the AO, on the bas .....

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60& 2184/Del./2013, C.O. No. 265 & 208/Del/2014, In ITA No. 2760/Del/2013, C.O. No. 174/Del/2014, In ITA No. 2184/Del/2013 - Dated:- 2-9-2015 - Sh. N. K. Saini And Sh. C.M.Garg, JJ. Fo The Appellant : Smt. Parwinder Kaur, Sr. DR For The Respondent : Sh. A.K.Agarwal, C.A. ORDER PER BENCH The appeals by the department and the Cross Objection by the assessee are directed against the separate orders dated 18.2.2013 and 28.1.2013 of the CIT(A)- Bareilly, partly for the assessment year 2002-03 and 200 .....

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the Hon ble Supreme Court. 2. Ld. CIT(A) has also erred in law and on facts in deleting the disallowance of depreciation which has been made by the AO after proper marshalling and sound footing of facts. 3. Any other grounds raised during the proceedings of appeal. 3. First issue vide ground no. 1 relates to the deletion of addition made by the AO on account of deduction u/s 80HHC on DEPB. 4. Facts related to this issue in brief are that the assessee was engaged in the business of manufacturing .....

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duties paid while procuring raw materials and moreover, only a unit carrying out export sales is entitled to get DEPB licenses only and only against exports made. Thus, the DEPB credits / licenses directly arose due to exports of good or merchandise. It was further submitted that vide taxation laws (amendment) Act, 2005 the benefit u/s 80HHC on the amount of profit on sale of DEPB to exporters having turn over exceeding ₹ 10 crore was denied with retrospective effect from 1.4.98 but the s .....

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license is in view of judgment of the Hon ble Gujarat High Court in the case of Ms. Avani exports vs. CIT (Supra). Now the department is in appeal. 7. The ld. DR strongly supported the order of the AO and further submitted that the receipt on account of DEPB is not directly arising out of exports out of India of any goods or merchandise therefore the deduction u/s 80HHC was rightly denied by the AO and the ld. CIT(A) was not justified in allowing the relief to the assessee. In his rival submiss .....

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5 and it has been held that all the exporters having export turn over above or below ₹ 10 crores shall be treated similarly copy of the said order was furnished which is placed on the record. 8. We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is noticed that the Ld CIT(A) allowed the claim of the assessee by following the decision of the Hon ble Gujarat High Court in the case of M/s Avani Export .....

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ies. A taxing statute is not wholly immune from attacks on the ground that it infringes the equality clause in article 14, though the courts are not concerned with the policy underlying a taxing statute. In the amendments the classifications based on export turnover is a recognized way of classification throughout the world. Progressive levy is based on income classification in terms of both, the basis of taxation and the rate of tax, and on this ground, the same cannot be said to be arbitrary. .....

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ibunal should be challenged by the aggrieved party before the appropriate High Court and if such party is still aggrieved by the order of the High Court, he should move the Supreme Court. There was no defect in the original legislation but the Tribunal has interpreted the language of the valid piece of legislation in a way, which benefits the assesses. In such a case, for overcoming the adverse decision of the Tribunal, the Legislature cannot delete a valid piece of legislation and incorporate a .....

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of a class of citizens who availed of the benefit by complying with the requirements of the then provisions of law. Moreover, the amendment has been made at a point of time when the application of section 80HHC has already been exhausted and it was not even in the statute book. In such a situation, it is not permissible to take away the benefit already granted through a concluded scheme by introducing a fresh amendment by virtue of which an expired scheme has been revived with benefit conferred .....

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3/2013) before the Hon ble Supreme Court where in it has been held as under :- We find that in essence the High Court has quashed the severable part of third and fourth proviso to sec. 80HHC (3) and it becomes clear therefrom that challenge which was laid to the conditions contained in the said provisos by the respondent has succeeded. However, to make the position crystal clear, we substitute the direction of the High Court with the following direction : Having seen the twin conditions and sinc .....

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made by the AO. The facts related to this issue in brief are that the AO disallowed the depreciation to the extent of ₹ 60,559/- on the vehicle block, ₹ 1,49,734/- on factory/ office building block, and ₹ 5,32,414/- on machinery & plant block for the assessment year 2002-03 by observing as under :- 11) The assessee has submitted a chart of fixed assets showing opening WDV and additions made during the year and subsequently depreciation charged thereon. The assessee was ask .....

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of purchase of vehicle amounting to ₹ 605604/- as shown in ledger a/c on 31.03.2002 as a Journal Transfer entry has not been provided. Hence addition of ₹ 605604/- is disallowed. Secondly the assessee has claimed ₹ 745789/- as depreciation which is excess to ₹ 60559/- is disallowed and added back in total income. 10% of the vehicle depreciation is also to be disallowed on the basis of personal use of the vehicle. Hence ₹ 68523/- out of admissible depreciation of &# .....

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disallowed and added back to total income. (Disallowance ₹ 149734) C. Machinery & Plant Block : Dep. 25% Dep. 12.5% WDV as on 07.04.01 14541452 Addition - 5020911 14541452 5020911 Depreciation 3635363 + 627614= 4262977 The assessee has not furnished put to use/installation certificate for the addition of machinery and plant. It is supposed to be admitted that the machinery & plant are added in the second half of the financial year. Hence excess depreciation in this block ₹ 53 .....

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559/- has been made on the contention that the journal entry dated 31.03.2002 was not explained. The journal entry is the transfer of amount of car purchased from M/s MGF Automobiles Ltd. by Delhi branch office of the assessee on 24.02.2002. The detailed copy of account having particulars of invoice and car and the bill were duly produced before AO and the same are enclosed herewith. It is prayed that the disallowance of ₹ 60,559/- , may kindly be deleted. Further, after allowance of above .....

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the additions were made. Accordingly, the assessee is entitled to 10% depreciation in respect of such additions. The assessee has claimed only 5% depreciation in respect of the additions made after 30 Septermber, 2001. The ld. AO has also not put any query asking to furnish any such certificate. The only query raised was to provide Details of additions in the fixed assets with evidence . It is therefore requested that the above disallowance being unfounded and based on surmises may please be de .....

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machineries are put to use as soon as they are purchased. The only query raised was to provide Details of additions in the fixed assets with evidence . It is therefore requested that the above disallowance being unfounded and based on surmises may please be deleted. 13. The ld. CIT(A) after considering the submissions of the assessee deleted the disallowance by observing as under :- In view of the ledger a/c and the invoice submitted by the appellant, the addition of ₹ 60,559/- stands del .....

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2001. In view of all the details and submission the addition of ₹ 1,49,734/- is deleted. Addition on depreciation on plant and machinery, assuming the installation date to be post 30.09.2001 is improper based on surmise and conjectures. All the details called for were duly submitted with proper evidence. The addition stands deleted. Now the department is in appeal. 14. The ld. DR reiterated the observations made by the AO and strongly supported the assessment order dated 21.3.2005. In his .....

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