Aradhana Drinks And Beveragespvt Ltd v. Commissionerof Incometax

$-15, 20 to 22 IN THE HIGH COURT OF DELHI AT NEW DELHI +ITA 745/2017 and CM No. 32388/2017+ITA 751/2017 and CM No. 32403/2017+ITA 752/2017 and CM No. 32405/2017 with+ITA 755/2017 and CM No. 32409/2017+ITA 751/2017 and CM No. 32403/2017+ITA 752/2017 and CM No. 32405/2017 with+ITA 755/2017 and CM No. 32409/2017 ARADHANA DRINKS AND BEVERAGESPVT LTD. Appellant ThroughMr. Deepak Chopra, Mr. RashmiChopra, Mr. Rashi Khanna and Mr.Yojit Pareek, Advocates versus COMMISSIONEROF INCOMETAX Respondent Through Mr. Zoheb Hossain, Sr. StandingCounsel and Mr. Deepak Anand, Jr.Standing Counsel CORAM:HON'BLE MR. JUSTICE SANJIV KHANNAHON'BLE MR. JUSTICE CHANDER SHEKHARORDER%21.08.2018 This commonorderwill disposeof above captionedappealsbyAradhana Drinks and Beverages Pvt. Ltd. ('appellant-assessee'forshort)underSection260Aofthe IncomeTax Act, 1961 ('theAct' forshort), assailing the common order of the Income Tax AppellateTribunal('Tribunal'for short) dated 05.06.2017for the assessmentyears 2008-09 and 2009-10. 2.By order dated 01.12.2017,the order dated 01.12.2017,the dated 01.12.2017,the 01.12.2017,thethe followingsubstantialquestionof law was framed in the present appeal: By order dated 01.12.2017,the order dated 01.12.2017,the dated 01.12.2017,the 01.12.2017,thethe followingsubstantialquestion "Did the ITATfall into error in deleting the additionswith regardto each ofthefouryears, in respectofwhichsubstantialreliefhad been grantedby the CIT(A), in the circumstances ofthese cases?" 3.Having heard learned counsel for the parties, and with theirconsent,the aforesaidsubstantialquestionof law is modifiedto readas under: ''Whether the Tribunal was correct in remanding theissueofthe additionsmade on accountofdisallowanceof and rate ofon bottlesoperatingexpenses depreciationand crates to the Assessing Officer fora freshadjudication." 4.Learnedcounsel for the parties state that directionfor remandon "inflated"has beendealtwithandin theoperatingexpenses upheldorderpassedtoday in ITA Nos.701-702/2017in the case ofAradhnaFoods and Juices Pvt. Ltd. Versus Commissioner ofIncome Tax. Infact the appellant-assesseein ITA No. 701-702/2017did not objectand contestthe remand on questionof operatingexpenses.We havewhile examiningremand,on disallowancemade from purchasesfromrelatedthe same. For the in the saidparties,upheld reasoninggivenorder, we uphold the order of remand on the said aspect, and againclarify that the entire question including the submissions andcontentionsof the appellant-assesseewould be examinedafresh. Wehave not commentedand made specificobservationsand findingsonmerits. First portionofthe substantialquestionof law is accordinglyanswered against the appellant-assessee and in favour of therespondent-revenue. 5.The Tribunal has remanded in the issue of rate of depreciationon bottles and crates to the Assessing Officer, for the followingreasons:- (D.l) Wefindfrom theperusalofordersof the AO andthe Ld.CIT(A) that the above-mentionedpoints as wellas thehave not been bottlingprocessfully consideredbythem. We are of the view that the aforesaid points aswell as bottlingprocess need to befirst consideredatlower levelas it requiresclear understandingoffactualaspects having regard to bottlingprocess, marketing,and related business aspects. We have, in any case, setaside the appellate orders passed by Ld.CIT(A) andassessment orders passed by the AO for both theaforesaidassesseesfor both A.Y. 2008-09and 2009-10and we have already restored the matters to thefile ofthe AOfor denovoassessment. We herebydirect the AOto reexamine the matter regarding rate of depreciationon crates, during the proceedingsfor making denovoassessmentsand topass fresh order as per law on thismatterin the denovoassessmentorders.The AO isdirected to provide opportunityto the assessee duringthe proceedingsfor making denovo assessment beforepassingfresh order. Thesefour appealsare disposedoffinaccordance with our order, directions and observations asaforesaid." 6.Learned counsel for the appellant submits that use of bottlesand crates is a matter of common knowledge, and is well known andunderstood. Bottles and crates are used to store, transport and sell thesoft drinks. Factual clarification or elucidation is not required andnecessaryand issue of rate of depreciationis purelylegal and relatesto interpretationof Appendix 1 (III) (4) of the Income Tax Rules,1962. 7.Duringthe course of hearingbefore us, some controversyhadarisen as to whether the issue raised before the Tribunal was relatingto rate of depreciationonbottleand cratesor only crates. Onreading the groundsofappealraisedbeforetheTribunal,it is apparentthattheissuerelatestobothbottlesand crates. 8.Havingnoticedthe contentionraised,we feetthatthis issueonrate of to bottles and crates re- depreciationapplicable requiresexamination by the Tribunal, who would examine the relevantheads/item in Appendix I and consider whether the appellant isentitledto depreciation@50% or 15%.The Tribunalwouldremandthe issue only if it is unable to decide the controversyin view ofcontroversialdisputed question of facts that camiot be resolvedwithoutan orderofremandto the AssessingOfficer. 9.Recordingthe aforesaid,on the secondissue in the substantialquestionof law i.e. rate of depreciationon bottlSs and crates, weacceptthe appeal with the directionto the Tribunalre-examinetheissue afresh.To this extentsubstantialquestionoflaw is answeredinfavour oftheandthe revenue.We further appellant-assessee againstclarifythatthe issueand questionofrateofdepreciationhasnotbeenexamined and consideredby us on merits. This aspect would beexaminedbytheTribunal. 10.The appealsare accordinglydisposedof, withoutany order asto costs.The stayordersarevacated. august 21, 2018/b SANJIV KHANNA, J CHAT^^SHEKHAR,J