Nemak Aluminium Castings India Pvt Ltd., Chengalput V. ACIT, CHENNAI

ITA 1001/CHNY/2015

• Counselvise Citation: 100121714 RSA 2015
• Duration Of Justice: 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 23-06-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 05-05-2015
• Court: TRIBUNAL
• Department Lawyers: N RENGARAJ
• Keywords: Depreciation; Business expenditure
• Section: 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI . . . , . ! , ' # $ [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ] ./ I.T.A.NO.1001/MDS/2015 / ASSESSMENT YEAR : 2011-12 M/S NEMAK ALUMINIUM CASTINGS INDIA PVT. LTD FORD SUPPLIER PARK-II MELROSAPURAM PO CHITAMANNUR VILLAGE, CHENGALPET CHENNAI 603 204 VS. THE ASSTT. COMMISSIONER OF INCOME-TAX COMPANY CIRCLE IV(4) CHENNAI [PAN AADCN 3286 B ] ( %& / APPELLANT) ( '(%& /RESPONDENT) / APPELLANT BY : SHRI PHILIP GEORGE, ADVOCATE /RESPONDENT BY : SHRI N. RENGARAJ, CIT / DATE OF HEARING : 23 - 0 6 - 2015 ! / DATE OF PRONOUNCEMENT : 03 - 0 7 - 2015 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE ADMINISTRATIVE COMMISSIONER PASSED U/S 263 OF THE ACT FOR ASSESSMENT YEAR 2011-12. ITA NO.1001/15 :- 2 -: 2. SHRI PHILIP GEORGE, LD. COUNSEL FOR THE ASSESSEE SU BMITTED THAT THE ASSESSEE CLAIMED ADMINISTRATIVE EXPENSES TO THE EXTENT OF ` 2,54,10,240/-, FINANCIAL EXPENSES OF ` 1,19,500/- AND DEPRECIATION TO THE EXTENT OF ` 7,38,457/- IN THE PROFIT & LOSS ACCOUNT. IN THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER ALLOW ED THE CLAIM OF THE ASSESSEE. HOWEVER, BY LETTERS DATED 15.12.2014 AND 19.12.2014, THE ASSESSEE VOLUNTARILY ADMITTED THAT THE PREOPERATIVE EXPENDITURE HAS TO BE DISALLOWED. THE ASSESSEE HAS ALSO INFORMED THE ASSESSING OFFICER THAT INTEREST INCOME HAS TO BE ASSESSED UNDER THE H EAD INCOME FROM OTHER SOURCES. HOWEVER, THE ADMINISTRATIVE COMMIS SIONER FOUND THAT THE ORDER OF THE ASSESSING OFFICER WAS ERRONEOUS AN D PREJUDICIAL TO THE INTEREST OF THE REVENUE. ACCORDING TO THE LD. COUN SEL, SINCE THE PROJECT IS UNDER CONSTRUCTION, THE EXPENDITURE CANN OT BE ALLOWED AS BUSINESS EXPENDITURE THEREFORE, IT HAS TO BE DISALL OWED. THE LD. COUNSEL SUBMITTED THAT EVEN THOUGH THE ASSESSEE HA S NO GRIEVANCE AGAINST THE ORDER OF THE COMMISSIONER, THE FACT REM AINS THAT THE ASSESSEES ADMISSION BY LETTERS DATED 15.12.2014 A ND 19.12.2014 WAS TOTALLY IGNORED BY THE COMMISSIONER WHILE DIRECTING THE ASSESSING OFFICER TO PASS AN APPROPRIATE ORDER DENOVO UNDER THE PROVISIONS OF THE INCOME-TAX ACT. 3. WE HEARD SHRI N. RENGARAJ, LD. DEPARTMENTAL REPRESE NTATIVE ALSO. ITA NO.1001/15 :- 3 -: 4. ADMITTEDLY, THE ASSESSEE CLAIMED PREOPERATIVE EXPE NDITURE AS BUSINESS EXPENDITURE. THE ASSESSING OFFICER WIT HOUT ANY DISCUSSION ALLOWED THE CLAIM OF THE ASSESSEE. HOWEVER, BEFOR E INITIATING PROCEEDINGS U/S 263 OF THE ACT BY ISSUING SHOW CA USE NOTICE DATED 18.2.2015, THE ASSESSEE BY WAY OF LETTERS DATED 15 .12.2014 AND 19.12.2014 INFORMED THE ASSESSING OFFICER THAT THE PREOPERATIVE EXPENDITURE HAS TO BE DISALLOWED AND THE INTEREST I NCOME HAS ALSO TO BE ASSESSED UNDER THE HEAD INCOME FROM OTHER SOURC ES. THE COMMISSIONER FOUND THAT THE ASSESSING OFFICER FAILE D TO CONSIDER THE PREOPERATIVE EXPENSES, THEREFORE, HE DIRECTED THE A SSESSING OFFICER TO PASS APPROPRIATE ORDER AFTER GIVING AN OPPORTUNITY OF HEARING TO THE ASSESSEE. THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT THE PREOPERATIVE EXPENDITURE HAS BEEN WRONGLY ALLOWED BY THE ASSESSING OFFICER WHICH IS CAUSING PREJUDICE TO THE INTEREST OF THE REVENUE. MOREOVER, IT IS AN ERRONEOUS ORDER. THEREFORE, THE ADMINISTRATIVE COMMISSIONER HAS RIGHTLY EXERCISED HIS JURISDICTION U/S 263. THIS TRIBUNAL DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE ADMINISTRATIVE COMMISSIONER. ACCORDINGLY, THE SAME IS CONFIRMED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS D ISMISSED. ITA NO.1001/15 :- 4 -: ORDER PRONOUNCED IN THE OPEN COURT ON 03 RD OF JULY, 2015, AT CHENNAI. SD/- SD/- ( . ! ) (A. MOHAN ALANKAMONY) ' / ACCOUNTANT MEMBER ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER #$ / CHENNAI %& / DATED: 03 RD JULY, 2015 RD &' ()*) / COPY TO: 1 . / APPELLANT 4. + / CIT 2. / RESPONDENT 5. ),- . / DR 3. +/' / CIT(A) 6. -01 / GF