Commissioner Of Income Tax, Coimbatore v. M/S.veejay Tool And Die Pvt. Ltd

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 27.10.2014 CORAM THE HONOURABLE MR.JUSTICE R.SUDHAKARANDTHE HONOURABLE MR.JUSTICE R.KARUPPIAH TAX CASE (APPEAL) NO.534 OF 2014 Commissioner of Income Tax, Coimbatore. .... Appellant Vs. M/s.Veejay Tool and Die Pvt. Ltd.,No.8, A.T.T. Colony,Coimbatore - 641 018. .... Respondent APPEAL under Section 260A of the Income Tax Act against theorder dated 04.01.2013 made in I.T.A.No.1578/Mds/2012 on the fileof the Income Tax Appellate Tribunal 'A' Bench, Chennai against theorder of the Commissioner of Incoem Tax (Appeals) order dated11.05.2012 in ITA No.216/11-12 for the assessment year 2004-05 andagainst the order of the Assistant Commissioner of Incoem -Taxcompany Circle-1(1) coimbatore, order dated 05.12.2011 in theAssessment year 20204-2005. For Appellant : Mrs.Hemalatha Standing counsel for Income TaxJ U D G M E N T (Delivered by R.SUDHAKAR,J.) 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 ofthe case, the Income Tax Appellate Tribunal was rightin holding that, the assessee has satisfied therequirement of second proviso to Rule 5(1A) of theIncome Tax Rules, and they are entitled fordepreciation on windmills as per Appendix I is valid?ii) Whether under the facts and circumstances ofthe case, the Income Tax Appellate Tribunal was rightin law in granting depreciation at 80% on windmills,even though the proviso to section 32(1)(i) and Rule 5(1A) clearly stipulate that only rate of depreciationon the method as provided for in Appendix I A will berelevant for power generating Machinery?https://hcservices.ecourts.gov.in/hcservices/ iii) Whether under the facts and circumstancesof the case, the Income Tax Appellate Tribunal wasright in law in granting depreciation at 80% onwindmills, even though the assessee is entitled at therate of 7.69% of the cost and this rate has correctlybeen allowed by the assessing officer? iv) Whether under the facts and circumstances ofthe case, the Income Tax Appellate Tribunal was rightin law in holding that the assessee is entitled forhigher rate of depreciation even though the assesseehad filed return of income within the due date and hasalso not exercised its option separately?" 2. The issue involved in this Tax Case (Appeal) relates tothe claim 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 letteror request or intimation with regard to of exercise ofoption is required. Since the returns are filed inaccordance with Section 139(1) of the Income Tax Act andthe form prescribed therein make a provision forexercising an option in respect of the claim ofdepreciation, no separate procedure is required, ascontended by the Department. We are in agreement withthe 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. Sd/- Assistant Registrar 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. Sd/- Assistant Registrar https://hcservices.ecourts.gov.in/hcservices/ Sub Assistant Registrar To 1. The Assistant Registrar, The Income Tax Appellate Tribunal 'A' Bench, Rajaji Bhavan IIIrd Floor Besant Nagar, Chennai. 2. The Commissioner of Income Tax (Appeals)-I, Coimbatore. 3. The Assistant Commissioner of Income-tax, Company Circle-I(1), Coimbatore. 4. The Director Office of the Central Board of Direct Taxes, New Delhi. New Delhi. + 1 cc to Mr.T.R. Senthil Kumar, Advcoate SR.50266 T.C.(A) No.534 of 2014 SAI(CO)Eu 07.11.14