M/s International Fresh Products India Ltd., Chandigarh V. DCIT, Chandigarh

ITA 1132/CHANDI/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57632 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 07-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAI SHREE SHARMA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE, VICE PRESIDENT AND SHRI D.K.SRIVASTAVA, ACCOUNTANT MEMBER ITA NO. 1132/CHD/2010 ASSESSMENT YEAR: 2007-08 M/S INTERNATIONAL FRESH PRODUCTS INDIA LTD, VS THE DCIT, CHANDIGARH CIRCLE 1(1), CHANDIGARH PAN NO. AAAC15036D (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SMT. JAISHREE SHARMA DATE OF HEARING : 02.02.2012 DATE OF PRONOUNCEMENT : 02.02.2012 ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A), CHANDIGARH DATED 9.7.2010 RELATING TO ASSES SMENT YEAR 2007-08. 2. THE ONLY GROUND RAISED BY THE ASSESSEE IN THIS A PPEAL READS AS UNDER:- THAT THE LD. CIT(A) HAS FAILED TO APPRECIATE THE FA CTS AND CIRCUMSTANCES OF THE CASE AND HAS THEREBY ERRED IN UPHOLDING THE DISALLOWANCE OF EXPENSES AT RS. 1,89, 080/- INCURRED ON ACCOUNT OF RUNNING AND MAINTENANCE OF B OILER. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS A PROVIDER OF COLD STORAGE AND WAREHOUSE SERVICES, SUPPLIER OF HSD AND ALSO DOING FISH 2 FARMING. ON PERUSAL OF THE ACCOUNTS OF THE ASSESSE E, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD DEBITED EXPENSES AMOU NTING TO RS. 1,89,080/- ON ACCOUNT OF RUNNING AND MAINTENANCE OF BOILERS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED THAT THE BOILER WAS INSTALLED FOR THE CARTON MANUFACTURING UNIT AND WAS USED FOR CARTON MANUFACTURING. CARTON MANUFACTURING WAS CARRIED OUT BY M/S PUNJAB METALLIC LTD FOR THE ENTIRE YEAR AND THE BOILER WAS USED FOR THE MANUFAC TURING OF CORRUGATED BOXES. AS PER DETAILS OF EQUIPMENT OF THE PACKAGIN G / CARTON MANUFACTURING UNIT, THE BOILER CHIMNIES ARE PART OF PLANT AND MAC HINERY OF PACKAGING UNIT. THE ASSESSING OFFICER OPINED THAT THE AMOUNT OF RS. 1,89,080/- WAS EXPENSES OF THE ASSESSEE WHICH WERE REQUIRED TO BE TRANSFERR ED TO M/S PUNJAB METALLIC LTD. HE THEREFORE, DISALLOWED THE AMOUNT OF RS. 1,8 9,080/- AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. ON APPEAL, THE CIT(A) UPHELD THE ORDER OF THE ASSESSING OFFICER FOR THE REASONS STATED IN PARA 13 OF THE IMPUGNED ORDER AND THE ASSESSEE IS IN APPEAL BEFORE THIS TRI BUNAL. 4. WE HAVE HEARD THE LD. DR AT LENGTH AND HAVE ALSO PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS OBSERVED THAT THE ASSESSEE WAS NOT PRESENT IN THE COURT ON THE DATE OF HEARING. ON A PERUSAL OF SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE CIT(A), IT IS CLEAR THAT THE DISPUTED AMOUNT HAS WRONGLY BEEN BOOKED UNDER HE HEAD BOILER RUNNI NG AND MAINTENANCE ACCOUNT. IT WAS EXPLAINED BY THE ASSESSEE BEFORE THE CIT(A) THAT RS. 1,26,320/- AND RS. 62,780/- PERTAINS TO DIESEL CONS UMED IN GENERATOR DURING THE MONTH OF AUGUST AND OCTOBER, 2006. WE FIND THA T THE ASSESSEE HAS FURNISHED COPIES OF THE STATEMENT AND VOUCHERS FOR THE PERIOD UNDER CONSIDERATION. NO DOUBT THESE DOCUMENTS WERE ALSO AVAILABLE BEFORE THE 3 LOWER AUTHORITIES. IT IS CLAIMED BY THE ASSESSEE B EFORE THE LOWER AUTHORITIES THAT DIESEL WAS USED IN THE GENERATOR FOR THE COLD STORAGE AND EXPENDITURE WAS CLAIMED RIGHTLY AND HENCE ALLOWABLE THOUGH IT STAND S DEBITED UNDER A WRONG HEAD. CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCE S OF THE PRESENT CASE, WE ARE OF THE VIEW THAT THE LOWER AUTHORITIES HAVE NOT CORRECTLY APPRECIATED THE SUBMISSIONS OF THE ASSESSEE AND, THEREFORE, THERE W AS NO JUSTIFICATION IN MAKING THE DISALLOWANCE OF EXPENSES OF RS. 1,89,080 /-. IN OUR VIEW, THE AMOUNT IN QUESTION HAS RIGHTLY BEEN INCURRED BY THE ASSESSEE FOR THE PURPOSES OF BUSINESS AND, THEREFORE, DISALLOWANCE OF RS. 1,8 9,080/- DESERVES TO BE DELETED. ACCORDINGLY, WE DELETE THE DISALLOWANCE O F RS. 1,89,080/-. 5. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 2 ND DAY OF FEBRUARY, 2012 SD/- SD/- (D.K.SRIVASTAVA) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED : 2 ND FEBRUARY, 2012 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR TRUE COPY BY ORDER ASSISTANT REGISTRAR