2020 (1) TMI 464 - HC - Income Tax

Depreciation on electronic meters/energy meters - entitled to high depreciation at the rate of 80% or 60% - HELD THAT - What percentage of the meters are energy saving devices, being meters for measures of heat losses, furnace oil flow, steam flow, electric energy and power factor meters was not gone into by the AO in terms of the remand order 2015 (11) TMI 927 - ITAT DELHI and therefore the Tribunal should have ensured that the AO undertakes the said exercise and also determine whether the bus bars form an integral/inextricable part of the meters. The respondent submits that the issue that the electronic meters/energy meters, which are energy saving devices, are entitled to high depreciation at the rate of 80% stand included by the Tribunal, and as well as, by this Court and therefore the AO cannot be permitted to re-open the said issue. We agree with the submission of the learned counsel for the respondent. However, we also find that the Tribunal stopped short of redirecting the AO to deal with the real issues, on which the remand was made vide order 2015 (11) TMI 927 - ITAT DELHI . Thus, those issues remain undetermined till date. In our view, the Tribunal should have ensured that the outstanding issues, in terms of the remand order, attain finality one way or another. We, therefore, answer the question in favour of the Revenue and remand back the matter to AO with a direction to strictly comply with the order of remand dated 05.10.2015 passed by the Tribunal which attained finality with the dismissal preferred by the appellant.

Summary

Issues:
1. Condonation of delay in re-filing applications.
2. Appeal against ITAT order regarding depreciation on electronic meters.
3. Whether AO should strictly comply with remand order.

Issue 1: Condonation of delay in re-filing applications:
The court allowed the exemptions sought in CM Appl. 248/2020 and 265/2020, subject to exceptions, after condoning a delay of 107 days in re-filing the applications as per the reasons stated.

Issue 2: Appeal against ITAT order regarding depreciation on electronic meters:
The Revenue appealed against the ITAT order dated 25.03.2019, which set aside the AO's order for exceeding the remand scope directed on 05.10.2015. The Tribunal had remanded the matter to determine energy-saving electronic meters entitled to 80% depreciation. The AO's decision that these meters were not energy-saving devices was deemed beyond jurisdiction. The court noted the need for the AO to address outstanding issues as per the remand order to attain finality.

Issue 3: Whether AO should strictly comply with remand order:
The appellant argued for strict compliance with the remand order of 05.10.2015, emphasizing the need for the AO to determine the percentage of energy-saving meters and the role of bus bars. The respondent contended that the issue of high depreciation on energy-saving meters was settled by the Tribunal and the Court. The court agreed with the respondent but directed the AO to address the unresolved issues as per the remand order for finality, limiting consideration to the specified paragraphs of the order.

In summary, the judgment addressed the condonation of delay in re-filing applications, the appeal against the ITAT order regarding depreciation on electronic meters, and the requirement for the AO to strictly comply with the remand order to resolve outstanding issues conclusively. The court emphasized the need for the AO to adhere to the remand order's directives for a comprehensive determination of the issues at hand.