Commissioner Of Income Tax, Coimbatore v. M/S.best Corporation (P) Ltd

In the High Court of Judicature at Madras Dated: 28.10.2014 The Honourable Mr.JUSTICE R.SUDHAKARandThe Honourable Mr.JUSTICE R.KARUPPIAH Tax Case (Appeal) No.772 of 2014 Commissioner of Income Tax, Coimbatore. .... Appellant Vs. M/s.Best Corporation (P) Ltd.,89/2, PadmavathipuramAvinashi Road, Tirupur - 641 603..... Respondent APPEAL under Section 260A of the Income Tax Act against the orderdated 04.02.2014 made in I.T.A.No.2005/Mds/2013 on the file of theIncome Tax Appellate Tribunal 'B' Bench, Chennai against the order ofthe Commissioner of Income Tax(Appeals-II) Coimbatore dated 30.8.2013made in IT.Appeal No.291/11-12 and against the assessment order ofthe Assistant Commissioner of Income Tax, Company circle, Tiruppurdated 30.12.2011 P.A.No.AAACB7231R for the Assessment year 2004-05. This Tax Case (Appeal) is filed by the Revenue as against theorder of the Income Tax Appellate Tribunal raising the followingsubstantial questions of law: "i) Whether under the facts and circumstances of thecase, the Income Tax Appellate Tribunal was right inupholding the order of the Commissioner of Income Tax(Appeals) directing the assessing officer to allowdepreciation at the rate of 80% under Rule 5(1), eventhough the assessee did not exercise an option separatelyas required under second proviso to Rule 5 before the duedate for filing of the return to apply rule 5(1) of theIncome Tax Rules? ii) Whether under the facts and circumstances ofthe case, the Income Tax Appellate Tribunal was right inholding that the assessee has satisfied the requirementof second proviso to Rule 5(1A) of the Income Tax Rules,and whether they are entitled for depreciation onwindmills as per Appendix I? iii) Whether under the facts and circumstances ofthe case, the Income Tax Appellate Tribunal was right inlaw in granting depreciation at 80% on windmills, eventhough the proviso to section 32(1)(i) and Rule 5(1A)clearly stipulate that only rate of depreciation on thecost of asset are relevant for power generatingMachinery? iv) Whether under the facts and circumstances ofthe case, the Income Tax Appellate Tribunal was right inlaw in granting depreciation at 80% on windmills, eventhough the assessee is entitled at the rate of 7.69% ofthe cost and this rate has correctly been allowed by theassessing officer? v) Whether under the facts and circumstances of thecase, the Income Tax Appellate Tribunal was right in lawin holding that the assessee is entitled for higher rateof depreciation even though the assessee had filed returnof income within the due date and has also not exercisedits option separately?" 2. The issue involved in this Tax Case (Appeal) relates to theclaim of depreciation by the assessee on the installation ofwindmill, which according to the Revenue is contrary to Rule 5(1A)Appendix 1A of the Income Tax Rules. 3. Learned Standing counsel appearing for the Revenue submitsthat the above-said issue is covered by a decision of this Courtdated 09.09.2014 made in T.C.(A)Nos.330 of 2013 etc. batch. 4. In the above-said decision, this Court, following thedecision of the Bombay High Court reported in 229 ITR 772 (CIT V.Vijaya Hirasa Kalamkar (HUF), held as follows: "20. A reading of the above-said decision of theBombay High Court makes it clear that if the assesseeexercised the option in terms of second proviso to Rule 5(1A) of the Income Tax Rules at the time of furnishing ofreturn of income, it will suffice and no separate letter orrequest or intimation with regard to of exercise of optionis required. Since the returns are filed in accordancewith Section 139(1) of the Income Tax Act and the form https://hcservices.ecourts.gov.in/hcservices/ 4. In the above-said decision, this Court, following thedecision of the Bombay High Court reported in 229 ITR 772 (CIT V.Vijaya Hirasa Kalamkar (HUF), held as follows: "20. A reading of the above-said decision of theBombay High Court makes it clear that if the assesseeexercised the option in terms of second proviso to Rule 5(1A) of the Income Tax Rules at the time of furnishing ofreturn of income, it will suffice and no separate letter orrequest or intimation with regard to of exercise of optionis required. Since the returns are filed in accordancewith Section 139(1) of the Income Tax Act and the form https://hcservices.ecourts.gov.in/hcservices/ prescribed therein make a provision for exercising anoption in respect of the claim of depreciation, no separateprocedure is required, as contended by the Department. Weare in agreement with the reasoning of the Tribunal.21. Accordingly, the question of law is answered infavour of the assessee and against the Revenue." 5. Following the above-said decision of this Court, thesubstantial questions of law raised are answered in favour of theassessee and against the Revenue and accordingly, this Tax Case(Appeal) stands dismissed. No costs. -s/d- Deputy Registrar(J) Dt:18.11.2014 True Copy Sub-Assitant RegistrarTo1. The Assistant Registrar, The Income Tax Appellate Tribunal 'B' Bench, Besant Nagar, Chennai. 2. The Commissioner of Income Tax (Appeals)-II, Coimbatore.3. The Assistant Commissioner of Income-tax, Company Circle, Tiruppur.4. The Director Central Board of Direct Taxes New Delhi. + 1 cc to M/s.M.Swaminathan, Advocate SR 50682rbd(co)prk7/11T.C.(A) No.772 of 2014