M/s. Vishnusankar Mills Ltd., Rajapalayam V. DCIT, Virudhunagar

CO 75/CHNY/2004

• Counselvise Citation: [2010] 122 COUNSELVISE.COM (IT) 5068 (ITAT-CHENNAI)
• Duration Of Justice: 6 year(s) 5 month(s) 11 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 03-09-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 30-08-2010
• Assessment Year: 1998-1999
• Appeal Filed On: 23-03-2004
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B SRINIVAS
• Assessee Lawyers: V JAGADISAN
• Keywords: Revenue expenditure
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C CHENNAI (BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER) ..... C.O. NO. 75 / MDS/2004 (IN I.T.A. NO. 1563/MDS/2003) ASSESSMENT YEAR : 1998-99 THE DY. COMMISSIONER OF INCOME TAX, CIRCLE I, VIRUDHUNAGAR. (CROSS OBJECTOR) V. M/S VISHNUSANKAR MILLS LTD., POST BOX NO.109, PAC RAMASAMY RAJA SALAI, RAJAPALAYAM. (RESPONDENT) CROSS OBJECTOR BY : SHRI V. J AGADISAN RESPONDENT BY : SHRI B. SRINIVAS O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : THIS CROSS OBJECTION FILED BY THE DEPARTMENT IS IN SUPPORT OF THE ORDER OF THE CIT(APPEALS) ON THE FOLLOWING ISSU ES DECIDED AGAINST THE ASSESSEE BY THE LATTER. (I) ADDITION MADE BY THE ASSESSING OFFICER BY DISALLOWING CLAIM FOR ALLOWANCE ON R.S.B. DRAW FRAME AND SPEED FRAMES, CONSIDERING THEM AS CAPITAL OUTGO, SINCE THESE ASSETS GAVE ENDURING BENEFIT TO THE ASSESSEE WAS JUSTIFIED. C.O. NO. 75/MDS/04 2 (II) FOR WORKING OUT DEDUCTION UNDER SECTION 80HHC ASSESSING OFFICER WAS JUSTIFIED FOR INCLUDING IN TURNOVER THE SALE OF COTTON WASTE, SALE OF WIND MIL L POWER, SALES TAX AND EXCISE DUTY COLLECTIONS. 2. WE FIND THAT THE ASSESSEE HAD FILED APPEAL AGAIN ST ORDER OF THE CIT(APPEALS) VIDE I.T.A. NO. 1563/MDS/2003. IN THI S APPEAL, IT WAS HELD BY THIS TRIBUNAL IN ITS ORDER DATED 19 TH JULY, 2004 THAT THE MACHINERY LIKE SPEED FRAME AND DRAW FRAMES COULD ON LY BE CONSIDERED AS REPLACEMENT OF PARTS AND HAD TO BE TR EATED AS CURRENT REPAIRS. THUS CLAIM OF THE ASSESSEE WAS ALLOWED A S REVENUE EXPENDITURE AT PARA 9 OF ITS ORDER. 3. WITH REGARD TO ISSUE OF INCLUSION OF SALE OF COT TON WASTE, SALE OF WINDMILL POWER ETC., IN THE TURNOVER FOR THE PURPOS E OF WORKING OUT DEDUCTION UNDER SECTION 80HHC OF THE ACT, IT WAS HE LD BY THE TRIBUNAL AT PARA 15 OF THE ORDER THAT SUCH AMOUNT RECEIVED W OULD NOT FORM PART OF TOTAL TURNOVER OF THE ASSESSEE. 4. THUS IN ASSESSEES APPEAL THIS TRIBUNAL HAS DECI DED BOTH THE ISSUES IN ITS FAVOUR. HENCE, THE CROSS OBJECTION R AISED BY THE REVENUE HAVE TO BE DISMISSED. C.O. NO. 75/MDS/04 3 5. IN THE RESULT, THE CROSS OBJECTION FILED BY THE REVENUE STANDS DISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON 03.09.2010 . SD/- SD/- (HARI OM MARATHA) (ABRAH AM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 3 RD SEPTEMBER, 2010. KRI. COPY TO: CROSS OBJECTOR/RESPONDENT/CIT(A)/CIT/D.R./ GUARD FILE