The Pr. Commissioner Of Income Tax -6 v. Neel Metal Products Ltd

$~20 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 914/2018 THE PR. COMMISSIONER OF INCOME TAX -6 ..... Appellant Through: Mr. Ruchir Bhatia, Advocate. versus NEEL METAL PRODUCTS LTD ..... Respondent Through: Counsel for the respondent ITA 6021Del/2015 [Assessment Year-2010-11] CORAM:HON'BLE MR. JUSTICE SANJIV KHANNA HON'BLE MR. JUSTICE ANUP JAIRAM BHAMBHANI % O R D E R22.10.2018 This appeal by the Revenue under Section 260A of the Income Tax Act, 1961 (‘Act’ for short) in the case of Neel Metal Products Limited relates to the Assessment Year 2010-11 and arises from the order of the Income Tax Appellate Tribunal (‘Tribunal’ for short) dated 16[th] March, 2018 passed in ITA No.6021/Del/2015. 2. The first issue raised by the Revenue pertains to deletion of the disallowance of Rs.1,39,58,000/- made under Section 14A of the Act read with Rule 8D of the Income Tax Rules, 1962. It is accepted and admitted by the counsel for the Revenue that the respondent-assessee had not earned any dividend or exempt income in this year. Once this factual position is accepted, the issue raised is covered against the Revenue vide decision of this Court in the case of Commissioner of Income Tax-IV Vs. Holcim India Private Limited, (2014) 272CTR 282 (Delhi) and judgement in Cheminvest Limited Vs. Commissioner of Income Tax-VI, (2015) 378 ITR 33(Del). We have followed these decisions by a detailed order of even date passed in ITA No.725/2018, Principal Commissioner of Income Tax-6, New Delhi Vs. Mcdonald’s India Private Limited. 3. The second and the third issue raised by the Revenue pertain to depreciation. The respondent-assessee had claimed depreciation @15% per annum on different items mentioned in paragraph 7 of the order passed by the Commissioner of Income Tax (Appeals), as plant and machinery. The Assessing Officer and the first appellate authority had held that the respondent-assessee was entitled to depreciation @ 10% as the items were electrical fittings as defined in Rule 5 of the Income-tax Rules, 1962, which includes electrical wiring, switches, socket, other fittings and fans etc. 4. We have examined the list and would observe that wall mounting fans, copper flexible cable, tube fitting etc. could possibly fall under the category of ‘electrical fittings’ whereas certain other items like 4KVA voltage Stabilizer, online UPS 1 KVA etc. may not fall under the category of ‘electrical fittings’. However, the disallowance made by the Assessing Officer was Rs.11,89,000/-. The amount being paltry, we are not inclined to issue notice in the present appeal on the question of rate of depreciation. 5. The third ground raised by the Revenue relates to disallowance of depreciation on canteen building of Rs.5,83,812/- on the ground that the canteen contractor had submitted the final bill on 27[th] April, 2010, i.e. after the end of the financial year. However, the Commissioner of Income Tax (Appeals), had rightly observed and held that mere submission of the final bill by the canteen contractor would not show that the canteen had not been put to use and was not operationalized in the Assessment Year itself. After examining the bills of canteen contractor, which pertained to the earlier period, it has been held that the canteen had been operationalized before the Assessment Year had ended. The factual finding has been upheld by the Tribunal. There is no ground and reason to interfere with the said factual finding. 6. Recording the aforesaid, the appeal filed by the Revenue is dismissed without any order as to costs. SANJIV KHANNA, J. ANUP JAIRAM BHAMBHANI, J. OCTOBER 22, 2018 MR/ssn