Dy. Commissioner of Income Tax , Circle-16(1), Hyderabad V. Nagarjuna Agrichem Limited, Hyderabad

ITA 1082/Hyd/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4702 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 25-05-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D J P ANAND
• Assessee Lawyers: C S SUBRAMANYAM
• Keywords: Depreciation; Capital expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A ', HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN , ACCOUNTANT MEMBER ITA NO. 1 08 2 / HYD/201 8 ASSESSMENT YEAR: 20 1 3 - 1 4 DY . COMMISSIONER OF INCOME - TAX, CIRCLE 16 ( 1 ), HYDERABAD VS. NAGARJUNE AGRICHEM LTD., HYDERABAD. PAN A A ACN 6932H APPELLANT RESPONDENT REVENUE BY: S HRI D.J.P. ANAND ASSESSEE BY: SHRI C.S. SUBRAMANYAM DATE OF HEARING: 1 5 / 1 0 / 201 8 DATE OF PRONOUNCEMENT: 26 / 1 0 /201 8 O R D E R PER S. RIFAUR RAHMAN , AM: T H IS APPEAL IS FILED BY THE REVENUE AGAINST ORDER OF C IT (A) - 4 , HYDERABAD , DATED 0 7 / 0 3 /201 8 FOR AY 20 1 3 - 14 WHEREIN THE REVENUE HAS RAISED THE FOLLOWING GROUND OF APPEAL: ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, THE CIT(A) ERRED IN DIRECTING THE AO TO ALLOW DEDUCTION U/S 35(1)(IV) OF RS. 5,82,24,950/ - OUT OF THE EXPENDITURE INELIGIBLE FOR DEDUCT ION U/S 35(2AB). 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FILED ITS RETURN OF INCOME FOR THE AY 2013 - 14 DECLARING TOTAL LOSS OF RS. 23,66,36,242/ - . SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AND STATUTORY NOTICES WERE ISSUED TO THE ASSESSEE. I N RESPONSE TO THE NOTICES, THE AR OF THE ASSESSEE FILED THE REQUIRED INFORMATION. AFTER GOING THROUGH THE INFORMATION, THE AO COMPLETED THE ASSESSMENT BY MAKING ADDITIONS OF RS. 9,32,85,950/ - TOWARDS DISALLOWANCE OF EXCESS DEDUCTION U/S I.T.A. NO. 108 2 /HYD/201 8 NAGARJUNA AGRICHEM LTD, HYD. 2 35(2AB), RS. 33,49, 540/ - TOWARDS DISALLOWANCE OF DEPRECIATION AND ASSESSED THE TOTAL LOSS AT RS. 14,01,00,752/ - . 3. AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). 4. BEFORE THE CIT(A), THE ASSESSEE FILED AN ADDITIONAL GROUND WITH REGARD TO THE ELIGIBLE DEDUCTION U/S 35(1)(IV). IN THIS CONNECTION, THE ASSESSEE SUBMITTED THAT AS PER SECTION 35(1)(IV), THE CAPITAL EXPENDITURE INCURRED FOR SCIENTIFIC RESEARCH TO BE ALLOWED. IT WAS SUBMITTED THAT SINCE U/S 35(2AB) ONLY RS. 3,49,61,000/ - OUT OF RS. 9,31,85,950/ - WAS ALLOWED, THEREFORE, THE BALANCE AMOUNT OF RS. 5,82,24,950/ - TO BE ALLOWED U/S 35(1)(IV) OF THE ACT. 5. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE CIT(A) FOLLOWING THE DECISION OF THE ITAT, HYDERABAD IN THE CASE OF COR OMANDEL INTERNAL LTD IN ITA NO. 101/HYD/2012, DATED 28/08/2014 DIRECTED THE AO TO ALLOW RS. 5,82,24,950/ - U/S 35(1)(IV) OF THE ACT. 6. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE IS IN APPEAL BEFORE US. 7. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. ON PERUSAL OF RECORD, WE FIND THAT NO AUTHORITY HAS VERIFIED THE EXPENDITURE CLAIMED BY THE ASSESSEE U/S 35(1)(IV). THEREFORE, WE SET ASIDE THE ORDER OF CIT(A) AND REMIT THE MATTER TO THE FILE OF AO WITH A DIRECTION TO EXAMINE THE ASSESSEES CLAIM OF EXPENDITURE U/S 35(1)(IV) AND ADJUDICATE THE SAME IN ACCORDANCE WITH LAW AFTER PROVIDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. THUS, THE I.T.A. NO. 108 2 /HYD/201 8 NAGARJUNA AGRICHEM LTD, HYD. 3 GROUND RAISED BY THE REVENUE IS ALLOWED FO R STATISTICAL PURPOSE. 8 . IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 26 TH OCTOBER , 2018. SD/ - ( P. MADHAVI DEVI ) JUDICIAL MEMBER SD/ - ( S. RIFAUR RAHMAN ) ACCOUNTANT MEMBER HYDERABAD, DATED 26 TH OCTOBER , 2018 KV COPY FORWARDED TO: 1. D CIT, CIRCLE 16 ( 1 ), ROOM NO. 121, 1 ST FLOOR, , B BLOCK, IT TOWERS, AC GUARDS, MASAB TANK, HYD . 2 . M/S NAGARJUNA AGRICHEM LTD., PLOT NO. 12 - A, C BLOCK, LAKSHMI TOWERS, NAGARJUNA HILLS, PUNJAGUTTA, HYD 82. 3 . CIT (A) - 4 HYDERABAD 4. PR. CIT - 4 , HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE