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TMI Blog2023 (4) TMI 623X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the assessee company. Therefore, the AO has rightly disallowed the electricity expenditure. Assessee has not given any reason to establish that the assessee company shares this expenditure. Hence, we set aside the order passed by the CIT(A) and allow the appeal of the revenue on this ground. Nature of expenses - restricting depreciation on the ponds @15% and treating the expenditure on ponds as revenue expenditure - HELD THAT:- In the instant case, the prawn ponds are tools to the business of the assessee and hence constitute plant . There are specialized machinery for pumping the water, oxygen etc. and various processes for cleaning and treatment of water in the ponds. As such water plays the role of a machine, ponds also consti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uru RL Reddy, Judicial Member : This appeal is filed by the revenue against the order of Commissioner of Income Tax (Appeals) [CIT(A)]-1, Visakhapatnam vide ITA No.534/2014-15/DCT,C-3(1), Vsp/2017-18 dated 03.09.2019 for the Assessment Year (A.Y.) 2011-12 and the cross objections are filed by the assessee in support of the order of the Ld.CIT(A). 2. Brief facts of the case are that the assessee is a company, engaged in growing and selling of prawns, filed it s return of income for the A.Y.2011-12 on 29.03.2011 in electronic format, declaring total income of Rs.68,34,020/-. The return of income was processed by CPC. Later, the case was selected for scrutiny under CASS for examination of the claim of additional depreciation. The ACIT, C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. 8D(1)(b). The assessee has received an amount of Rs.12.59 lakhs as dividend during the year. Therefore, the AO made the disallowance u/s 14A r.w.r.8D @0.5% against the investment of Rs.2.5 crores. The AO also made disallowance of Rs.3,52,753/- in respect of electricity charges paid against the directors of the assessee company which is not related to the business of the assessee. 3. On being aggrieved, the assessee preferred appeal before the CIT(A) and the Ld.CIT(A) has allowed the appeal of the assessee after consideration of the submissions made by the assessee. 4. On being aggrieved, the revenue preferred appeal before the Tribunal and raised the following grounds : 1. The order of the Ld.CIT(A)-1, Visakhapatnam is erroneou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... articular year has not earned any exempt income. 7. The appellant craves leave to add or delete or amend or substitute any ground of appeal before and / or at the time of hearing of appeal. For these and other grounds that may be urged at the time of appeal hearing, it is prayed that the addition made by the AO to be restored. Inspite of receipt of notices, neither the assessee nor his representative was present before the Tribunal to establish it s claim. Therefore, we proceeded to hear the Ld.DR and dispose off the appeal on merits. 5. Ground No.1 and 7 are general in nature which does not require specific adjudication. 6. Ground No.2 is related to disallowance of electricity charges. So far as the issue with regard to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iture. The assessee has not given any reason to establish that the assessee company shares this expenditure. Hence, we set aside the order passed by the Ld.CIT(A) and allow the appeal of the revenue on this ground. 8. Ground No.3 to 5 are related to restricting the claim of depreciation on the ponds @15% and treating the expenditure on ponds as revenue expenditure. It was the submission of the Ld.DR that the Ld.AO has relied on the decision of Hon ble Supreme Court in the case of CIT Vs. Victory Aqua Farms Ltd supra, treated the aqua farms as plant and allowed depreciation @15% which is mentioned under Depreciation Schedule under the heading Machinery and Plant . The Ld.DR further argued that the Ld.CIT(A) has erred in treating the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee are allowed. In the instant case, the prawn ponds are tools to the business of the assessee and hence constitute plant . There are specialized machinery for pumping the water, oxygen etc. and various processes for cleaning and treatment of water in the ponds. As such water plays the role of a machine, ponds also constitute part of the machinery and hence, eligible for depreciation at the rates applicable to the plant and machinery. The AO has rightly allowed depreciation under Depreciation Schedule Plant and Machinery @15%. Hence, we do not find any infirmity in the order passed by the Ld.AO and uphold the order passed by the Ld.AO. Therefore, we set aside the order passed by the Ld.CIT(A) in allowing depreciation @1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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