2014 (2) TMI 376 - HC - Income Tax

Depreciation on plant and machinery - Held that - The Tribunal ought to have decided the issue at that level and there was no need of second remand - The assessee has no new material to produce before the CIT (Appeals) in connection with its claim - The Tribunal in the impugned judgment has granted additional opportunity to the assessee to produce material on record regarding connectivity of the new unit and the production of soda ash and other material with the aid of such machinery - The Tribunal is requested to decide afresh the issues on the basis of the existing material - Decided in favour of petitioner.

Summary

Issues:
Claim of depreciation by the assessee on plant and machinery for the assessment year 1992-93, remand proceedings by the Tribunal, failure to establish connectivity of new unit with old plant, granting additional opportunity to produce material, necessity of second round of remand.

Analysis:
The primary issue in this case revolves around the claim of depreciation by the assessee on certain plant and machinery for the assessment year 1992-93. The matter had previously reached the Tribunal, which remanded it to the Assessing Officer for further examination of the connectivity of the relevant facilities with the main plant and the actual use of the machinery. However, in subsequent proceedings, it was noted that the Assessing Officer and the CIT (Appeal) failed to comply with the Tribunal's directions from the first round of remand. The Tribunal observed that the assessee did not provide sufficient evidence to prove that the plant was put to use and connected with the old plant.

The Tribunal, in its impugned judgment, once again remanded the proceedings to the CIT (Appeals) to determine whether the unit was indeed put to use and connected with the old plant, emphasizing that the burden lies on the assessee to establish this fact with concrete evidence. The assessee, through its counsel, argued that since the issue dated back to 1992-93 and no further material could be produced, a second remand was unnecessary. The counsel also highlighted that the claim for depreciation in subsequent years had been accepted.

While the Tribunal granted the assessee an additional opportunity to present evidence regarding the connectivity of the new unit and the production of materials, the High Court found the second round of remand to be futile. Given the age of the issue and the assessee's statement that no further evidence could be provided, the High Court decided to rescind the Tribunal's order and directed the Tribunal to consider and dispose of the Department's appeal based on the existing material. The Court clarified that it did not disregard any legal contentions of the assessee, ultimately disposing of the Tax Appeal accordingly.