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TMI Blog2015 (10) TMI 394X X X X Extracts X X X X X X X X Extracts X X X X ..... on merits after hearing the Ld. Sr. DR. 3. The sole issue in ITA No.-5708/Del/2013 is pertaining to the Quarry Development Expenses. The relevant facts of the case are that the assessee claimed Quarry Development Expenses amounting to Rs. 1,86,08,000/- as revenue expense. The claim was rejected holding the expenditure to be capital in nature. The assessee's explanation that there were two types of Quarry Development expense and the expense which pertained to removal of overburden at the limestone deposits and expenses pertaining to laying of roads, erection of stock yard, crusher ramp etc. was the expenditure which was capitalized by the assessee. The issue of the Quary Development Expenses which was revenue expenditure pertained to the expenses incurred for salary, wages etc. and this was accepted in appeal by the CIT(A) in 2007-08, 2008-09 & 2009-10 assessment years was not accepted by the AO. A perusal of the aforesaid order of the Co-ordinate Bench further shows that the Co-ordinate Bench considering the identical claim of the Revenue dismissed the appeals of the Revenue. In the afore-mentioned background Ld. Sr.DR was required to address the issue. 4. The Ld.Sr.DR placed rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness', when applied to block of assets, would mean use of block of assets and not any specific building, machinery, plant or furniture in said block of assets as individual assets lose their identity after becoming inseparable part of block of assets." 6. It was pointed out by the learned counsel that even if some of the units of the assessee are closed, other units are certainly working and the depreciation is to be allowed on the entire block of assets of the plant & machinery and not only individual plant and machinery of each unit of the assessee. In our opinion, the above decision of Hon'ble Jurisdictional High Court would be squarely applicable to the assessee of the assessee. When some of the units are closed and some of the units are working, then, the depreciation on the entire block of assets would be allowed. Accordingly, ground No.1 of the Revenue's appeal is rejected. 7. Ground No.2 of the Revenue's appeal in all the three years is against the deletion of the disallowance of quarry development expenses in each year as under:- AssessmentYear Amount 2007-08 Rs.1,79,88,000/- 2008-09 Rs.2,13,95,000/- 2009-10 Rs.1,69,19,000/- 6. In the above factua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sstt. Years 2007-08, 2008-09 and 2009-10 respectively as stated above. Therefore, addition of Rs. 1,86,08,000/- made by the AO is deleted and the ground of appeal of appellant company is allowed on this issue." 7. In view of the above peculiar facts and circumstances, we find no infirmity in the impugned order as the issue is covered on facts in favour of the assessee. In the absence of any distinguishing facts or circumstances the departmental ground devoid of merit is dismissed. 8. In the result, ITA No.-5708/Del/2013 is dismissed. ITA No.-5709/Del/2013 9. In ITA No.-5709/Del/2013, two grounds have been raised by the Revenue. It is seen that Ground no.-2 is identical to Ground no.-1 in the earlier appeal. The record shows that the facts and circumstances for making the addition and deleting the addition remain the same. Herein also the Ld. Sr. DR places reliance upon the assessment order and did not refer to any change in facts, circumstances and position of law. In the peculiar facts and circumstances, respectfully following the order of the Tribunal passed by the Co-ordinate Bench referred to in the earlier part of this order and the reasoning taken in ITA No.- 5708/Del/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay to day functioning and in order to maintain up keep of the offices, factory and campus of the units of the appellant Company, water and electricity requirements for both office as well as residential colony was met by the operating D G Sets, that only the operating of the plants was suspended but the operation of other activities was maintained in order to sustain, till the sale of assets/units is affected as per the Sanctioned Scheme of BIFR. Moreover prior to AY 2003-04, deprecation on non-operating plants were allowed as deduction. However, the AO was of the view that the said Sanctioned Scheme of the sale proceeds of seven units is only on paper and that the same was not implemented till date." 14. A perusal of the finding at para 5.2 shows that the issue was concluded in favour of the assessee by the the CIT(A) following the finding on the same facts taken in 2009-10 assessment year. For ready-reference, the same is reproduced hereunder:- 5.2. "So far as the 2nd ground of appeal is concerned, an amount of Rs. 2,38,45,256/- incurred by the appellant on account quarry development expenses was disallowed by the AO treating the same as capital expenditure. However, the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the relief to the assessee following the order of his predecessor for AY 2003-04 to 2006-07 wherein the CIT(A) has held as under:- "In the present case also, although the production has not been carried out in the years under consideration but the assets are kept as a stand by for the whole year. Moreover, although the production is suspended but the other activities of the units are being carried out. In such circumstances, I find that the AO was not justified in disallowing the depreciation on the assets of these units. The additions made by him are, therefore, directed to be deleted." 5. It was brought to our knowledge that in AY 2003-04 to 2006-07, the Committee on Disputes did not permit the Revenue to file appeal against the order of learned CIT(A) on the above ground. The assessee is a Government of India undertaking and the high powered committee formed by the Government i.e., COD directed the CBDT to accept the above order. When the above order of learned CIT(A) is accepted by the Government for AY 2003-04 to 2006-07, there would be no justification to interfere with the order of learned CIT(A) for AY 2007-08 to 2009-10 wherein he has only followed the order of his ..... X X X X Extracts X X X X X X X X Extracts X X X X
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