Punit Construction Company vs The Commissioner of Income Tax-25 and Others

This appeal of the assessee impugnes the order passed by the Income Tax Appellate Tribunal dated 15th February, 2013.

Mr. Toprani appearing on behalf of the assessee submits that the questions of law at pages 9 and 10 of the paper-book are substantial in nature. The Tribunal should not have interfered with the factual conclusion in the order of other First Appellate Authority. That was justified because the Commissioner relied upon a site inspection to conclude that the windmill project was commissioned on 31st March, 2006 at village Tisangi, District Sangli. If this fact was verified and ascertained by the Commissioner of Income Tax (Appeals), then, his order should not have been interfered with. That was not perverse. The Tribunal has interfered with it merely because it holds another view. This course was impermissible in law.

Upon a perusal of the order passed by the Assessing Officer and the Tribunal, we are unable to agree with Mr. Toprani. The Assessing Officer had before him a return of income declaring total loss of Rs. 30,51,480/-. That return of income was filed on 27th October, 2006. The assessment year was 2006-07. This return was duly processed and the case was selected for scrutiny. The requisite notices were issued and served on the assessee. The assessee''s Chartered Accountant and duly authorised represented him. The assessee projected that it is a firm carrying on business of construction of building and land development. It depicted certain construction activity during the course of the assessment year. These are some residential projects. We are not concerned with them in the present case. We are only concerned with the claim of depreciation on the windmill. The assessee claimed 50% depreciation on this windmill project and by urging that it was commissioned within and before the relevant date. To verify the genuineness and veracity of this project, the assessee was called upon to file complete details. These details were placed and they demonstrate that the windmill project is completed by M/s. Suzlon Energy Limited and M/s. Suzlon Infrastructure Limited collectively on turnkey basis. The assessee had placed separate purchase orders on both parties on 17th February, 2006 and for windmill project at Nandurbar / Dhalgaon site in Maharashtra. The project was completed on 30th March, 2006 and handed over to the assessee on the same date. The summons was issued to these two companies to provide copies of purchase order, books of account and related documents relevant to the project. They responded and on perusal of their replies, the Assessing Officer found that the site is in Nandurbar District of the State of Maharashtra. The transport bills reveal that the windmill components were transported to Dhalgaon site village Kuntlapur via Kuchiiphata, District Sangli. The Assessing Officer has compiled the transport delivery site and invoice notices and then concluded that there are serious discrepancies and which revealed that the claim was not genuine. The assessee''s reply that previously the windmill site was at Dhalgaon, District Nandurbar but it was then installed at Tisangi village, District Sangli. It is stated that Dhalgaon was only a proposed site. However, the Assessing Officer found that there were no components and which were transported to Tisangi site. The entire reasoning in paragraph 4 at pages 4 and 5 of the Assessing Officer''s order would reveal that the satisfaction recorded by him was that the new windmill was not installed at the village site in District Sangli and, therefore, he disallowed this 50% claim of depreciation.

The Commissioner may have undertaken an exercise and as alleged by Mr. Toprani but what the Tribunal found from the Commissioner''s conclusion that the certificates which were relied upon by the Commissioner and purportedly of site inspection do not remove the essential discrepancy nor does it take care of the fact that the windmill was commissioned on 31st March, 2006. The certificate issued by Maharashtra State Electricity Distribution Company Limited was relied upon. However, the Tribunal found that the hair-splitting by the Commissioner was uncalled for. If the project was indeed commissioned then it was not necessary for the assessee to have approached another authority and stated to be a statutory authority. The certificate issued by the statutory authority was also doubted because the same was issued at the instance and on the application of the assessee dated 28th March, 2006. The evidence with regard to heavy windmill components being transported from Nandurbar District and particularly village Dhalgaon to village Tisangi in Sangli District was not produced. That is a finding of fact which has been recorded by the Tribunal and relying on the documents which were on record. It also records that it is surprising that a project of this magnitude was commissioned and within a short span as noted in paragraph 10 of the Tribunal''s order. The certificate issued by the other entity M/s. Suzlon (pertinently this was a joint-venture project) indicate that the material supplied to the assessee against the invoice number set out in the Tribunal''s order at paragraph 10 dated 27th March, 2006 was dispatched from their works at Puducherry. In such circumstances, it was physically impossible for the consignment to cover a distance of 800 kilometers and reach a site which was earlier proposed in Nandurbar District and later on in Sangli District. Therefore, the perversity in the Commissioner''s order enabled the Tribunal to interfere with the findings and uphold that of the Assessing Officer. We do not see any substantial question of law emerging from an exercise of this nature undertaken by the Tribunal.

This is not a case where any expert opinion was produced or relied upon and that expert was not made available for cross-examination. We do not see how, therefore, a reliance on the judgment of the Hon''ble Supreme Court in M/s. Saraswati Industrial Syndicate Ltd. Vs. The Commissioner of Income Tax, Haryana, Rohtak, AIR 1999 SC 1218 : (1999) 237 ITR 1 : (1999) 2 JT 108 : (1999) 2 SCALE 15 : (1999) 3 SCC 141 : (1999) 1 SCR 974 : (1999) 103 TAXMAN 395 : (1999) AIRSCW 884 : (1999) 3 Supreme 15 would assist the assessee. That judgment is clearly distinguishable on facts.

As a result of the above discussion, we do not find any merit in this appeal. It is dismissed. No order as to costs.