Itta/333/2011 Of Priyansh Sea Foods Pvt. Ltd v. The Commissioner Of Income Tax

THE HONOURABLE SRI JUSTICEGODA RAGHURAMANDTHE HONOURABLE SRI JUSTICEN. RAVI SHANKAR ITTA No. 333 of 2011 Dated: 10-10-2011 Between Priyansh Sea Foods Pvt. Ltd.,Visakhapatnam. And The Commissioner of Income Tax,Visakhapatnam. …Appellant …Respondent JUDGMENT:(Per Hon’ble Sri Justice Goda Raghuram) This is a misconceived appeal under Section 260A of the IncomeTax Act, 1961 by the assessee, directed against the order dated 4-2-2011 of the learned ITAT, Visakhapatnam Bench rejecting ITA No.297/Vizag/2009, pertaining to the Assessment Year 2004-05. The assessee is in the business of deep sea fishing with the helpof Tuna Liners (deep sea fishing vessels) imported from Taiwan. Forthe Assessment Year 2004-05 it filed its return of income on 1-11-2004declaring loss from business at Rs.1,63,47,722/-. The return wasinitially processed under Section 143 (1) on 3-3-2005 and thereafterthe return was selected for scrutiny and a notice under Section 143 (2)was issued on 29-8-2005. The claim for depreciation in an amount ofRs.1,61,01,762/- for the year under consideration in respect of the twoimported vessels, was disallowed. The assessee preferred an appeal and the same was rejected bythe order dated 7-9-2007 of the Commissioner of Income Tax, on theground that there was no transfer of ownership in favour of theassessee, of the two vessels in question, since the petitioneradmittedly did not pay the value of the vessels to the original owner interms of the agreement between the parties in view of Clause 5 of theagreement between the parties which records that in default ofpayment of total purchase amount, the agreement stands rescinded,the buyer shall cease to have any property or interest in the goods andthe vendor shall be entitled to resell the vessels to others. The assess preferred a further appeal to the ITAT whichconfirmed the conclusions recorded by the primary and appellateauthorities; that depreciation benefit was not available, as the agreement in respect of the vessels did not record the date ofpurchase; the purchase consideration also was not paid by theassessee to the original owner; and clause 5 of the agreementbetween the parties did not transfer title on the assessee. Since theassessee was concurrently found by the primary, appellate and furtherappellate authority on fact not to have any title on the two vessels inquestion, no depreciation is legitimately allowable and there is no errorof law let alone a substantial error which calls for consideration in thisappeal. The appeal is dismissed at the stage of admission. No costs. ______________________ GODA RAGHURAM, J 10[th] October, 2011 GRR ______________________ N. RAVI SHANKAR, J