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TMI Blog2016 (1) TMI 900X X X X Extracts X X X X X X X X Extracts X X X X ..... for industrial lands are obtained for 30 to 99 years, then normally assessee is owner of such lands, particularly because there is always a renewal clause in such lease deeds. pex Court also in the case of Aditya Minerals Pvt. Ltd. [1999 (9) TMI 2 - SUPREME Court] held that where lease deed allowing use of land even for excavation purposes and where rent was deposited in advance, then only adjustment of such rent was not deductible. - Decided against assessee. Disallowance of additional depreciation in respect of additions to plant and machinery in the previous assessment year - Held that:- Tribunal in the case of M/s. I.P.Rings Ltd. [2014 (9) TMI 998 - ITAT CHENNAI] held that as the assessee used new plant and machinery below 180 days and therefore, additional depreciation shall be allowed only 50%. - Decided against assessee. Disallowance of interest on additional excise duty(AED) u/s.43B - Held that:- in the present case, the principal amount of AED is not a decretal amount. The Finance Act, 2005, prescribed the procedure to be followed for the recovery of the AED credit availed by the assessee and interest payable thereon. The Finance Act required the amount to be paid b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Commissioner of Income-tax(Appeals) for the assessment years 2002-03, 2006-07 and 2007-08. 2. The issue now for our consideration in Revenue's appeal in ITA No.1676/Mds/10 is with regard to charging of interest u/s.234D of the I.T. Act, 1961 and other issues in Revenue's appeal were already adjudicated by this Tribunal in its order dated 11.3.2011. 3. The facts of the case are that the assessee has contested charging of interest u/s.234D of the Act in the reassessment order dated 23.12.2009. In determining the tax payable in his order dated 23.12.2009, the Assessing Officer charged interest u/s.234D for refunds granted earlier in revisions for giving effect to appellate order etc. The assessee submitted that such interest can be charged only if the refund originates from an order passed u/s.143(1) and not otherwise. To support this view, the assessee has placed reliance on the decision of the Madras High Court in the case of CIT v. Ramco Industries (Tax Case No.1343/2009) . Aggrieved, the assessee went in appeal before the Commissioner of Income-tax(Appeals). 4. On appeal, the Commissioner of Income-tax(Appeals) observed that the provisions of sec.234D of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the ld. CIT(A), the assessee has not raised any issue in appeal before the Tribunal and has accepted what has been decide and the reasons for that decision. Meaning thereby, the findings of the ld. CIT(A) have not been challenged by the assessee in second appeal before the Tribunal. By accepting the version of the petitioner that the Hon'ble High Court has directed to get clarification in this regard although no written order was placed nor any affidavit in support of this version having filed from the petitioner's side, but still having belief in the Advocate whatever has been stated at the Bench while arguing orally, we have circumspected on the issue on the issue but we are unable to state as to whether refund u/s 143(1) of the Act was granted or not granted during this year to the assessee. The assessee had not clearly brought the facts of this issue either before the ld. CIT(A) or before the Tribunal. The only averment was regarding chargeability of interest in the light of the abovementioned Hon'ble Madras High Court's decision. In the assessment order, the date of processing of return u/s 143(1) of the Act has not been mentioned and the assessment was pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 06, the Tribunal held as follows: We are of the opinion that once lease rights for industrial lands are obtained for 30 to 99 years, then normally assessee is owner of such lands, particularly because there is always a renewal clause in such lease deeds. In any case the Kolkatta Bench of the Tribunal has already held in Yagyawati Jayaswal Family Trust v. ITO 89 ITD 199 that wherever lease period is for more than 12 years, the assessee would be deemed to be the owner of such property for the purpose of the Act. The Hon'ble Apex Court also in the case of Aditya Minerals Pvt. Ltd. 239 ITR 817 held that where lease deed allowing use of land even for excavation purposes and where rent was deposited in advance, then only adjustment of such rent was not deductible. We think the issue is squarely covered by the decision of the Hon'ble Supreme Court and therefore we confirm the order of ld CIT(A). Respectfully following the above orders of this Tribunal, we are inclined to dismiss this ground of appeal of the assessee. 12. The next ground raised by the assessee in its appeal is that the Commissioner of Income-tax(Appeals) erred in confirming the disallowance of addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny succeeding year. The Hon'ble Jurisdictional High Court in the case of M.M. Forgings Ltd. v. Addl. CIT [2011] 11 Taxnmann.com 367, by considering section 32(1) as well as 32(1)(iia) of the Act, has held as under: 3. The Assessing Authority by applying the second proviso to section 32(1) of the Act, restricted the allowability of the depreciation to 50 per cent of the amount permissible under section 32(1)(iia)of the Act. According to the appellant, when it satisfied all the conditions stipulated under the provisos to section 32(1)(iia) of the Act, the Assessing Authority ought not to have restricted the depreciation permissible under the said section by resorting to the second proviso to section 32(1) of the Act. The learned counsel however fairly pointed out before us that in the second proviso to section 32(1) of the Act, that very clause (iia) itself was inserted by Finance Act, 2002 with effect from 01.04.2003. Therefore, it was imperative that on and after 01.04.2003, the claim of the assessee made under section 32(1)(iia) of the Act, had to be necessarily assessed by applying the second proviso to section 32(1) of the Act. Therefore, when there was statutory stipu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Shree Pipes v. DCIT (289 ITR 154). 20. We have heard both the parties and perused the material on record. The claim of the assessee is that the interest paid on AED cannot be covered u/s.43B and the provisions of sec.43B is applicable only in respect of tax, duty, cess, fee etc. It does not apply to any interest chargeable or payable on such tax, duty, cess, fee etc. In our opinion, the case laws relied on by the assessee's counsel are not applicable to the facts of the present case. As in the present case, the principal amount of AED is not a decretal amount. The Finance Act, 2005, prescribed the procedure to be followed for the recovery of the AED credit availed by the assessee and interest payable thereon. The Finance Act required the amount to be paid back to the government, which could be paid back in instalments with interest at the rate of 13% per annum. Therefore, the interest payable on AED is part of the duty payable and provisions of sec.43B are applicable. Being so, the argument of the ld. AR that interest payable on AED is only compensatory in nature and does not fall within the purview of sec.43B cannot be upheld. Hence, the judgment relied on by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... follows mercantile system of accounting. Sec.145 deals with the method of accounting. It has been radically recast with effect from 1.4.1997, so as to permit only cash or mercantile system of accounting. Further, the Supreme Court in Nalinikant Ambalal Mody v. S.A.I. Narayan Row. CIT 61 ITR 428 has held that sec.145 is mandatory. In view of the clear statutory provision and ratio of the Supreme Court, it may be stated that the assessee can follow only one of the methods of accounting i.e. cash or mercantile system of accounting. Since the assessee is following mercantile system, the disallowance made by the AO is in order. Therefore, no interference is called for on the action of the AO. The other plea of the assessee that it is consistently following the above practice and the same has been accepted by the Department will also not come to its rescue because reliance on rule of consistency alone cannot be the basis for such allowance as held by the Supreme Court in the case of CIT v. Ostwal Agro Mills Ltd. (183 Taxman 241(SC). Further, estoppel will not operate in such a situation and the Department is entitled to judge the accounts of an assessee each year on their merits (Jamne ..... X X X X Extracts X X X X X X X X Extracts X X X X
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