M/s. Surbhi Milkfood & Beverage Ltd., Ahmedabad V. The ACIT., Circle-8, Ahmedabad

ITA 1159/AHD/2006

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 8607 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 10-03-2010
• Assessment Year: 2002-2003
• Appeal Filed On: 08-05-2006
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: GOVIND SINGHAL
• Assessee Lawyers: J P SHAH
• Keywords: Depreciation; Additional evidence; Unabsorbed depreciation; Capital expenditure; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI, JM AND A. N. PAHUJA, AM) ITA NO.1159/AHD/2006 A. Y.: 2002-03 M/S. SURBHI MILKFOOD & BEVERAGES LTD., F-1, RUSHVINA FLATS, NR. SHREYAS RLY. CROSSING, AMBAWADI, AHMEDABAD PA NO. AAECS 8430 R VS THE A. C. I. T., CIRCLE-8, AHMEDABAD (APPELLANT) (RESPONDENT) DEPTT. BY SHRI GOVIND SINGHAL, DR ASSESSEE BY SHRI J. P. SHAH, AR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-XIV, AHMEDABAD DATE D 16-02-2006 FOR ASSESSMENT YEAR 2002-03. 2. THE LEARNED COUNSEL FOR THE ASSESSEE DID NOT PRE SS GROUND NOS. 1 AND 5 OF THE APPEAL. THE SAME ARE ACCORDINGLY DISMI SSED AS NOT PRESSED. 3. GROUND NOS. 2 TO 4 OF THE APPEAL READ AS UNDER: 2. THE C.I..T. (APPEALS) ERRED IN UPHOLDING THE DISALLOWANCE OF DEPRECIATION CLAIMED ON ELECTRIC INSTALLATION OF RS.1,31,037/- 3. THE C. I. T. (APPEALS) FURTHER ERRED IN DISALLOW ING THE CLAIM OF DEPRECIATION ON BOTTLES AND CRATES. 4. THE C. I. T. (APPEALS) ERRED IN NOT APPRECIATING THE ALTERNATIVE CLAIM OF TH4E ASSESSEE THAT BOTTLES A ND CRATES ARE USED TO STORE LIQUID MATERIAL WHICH IS S OLD AND IT WOULD BE IMPOSSIBLE TO SELL THE PRODUCT WITH OUT THE BOTTLES AND CRATES BEING AVAILABLE. HENCE, WHEN THE ITA NO.1159/AHD/2007 M/S. SURBHI MILKFOOD & BEVERAGES LTD. 2 SALES ARE ACCEPTED THE PURCHASES OF BOTTLES AND CRA TES SHOULD HAVE BEEN ACCEPTED. 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE AO H AS OBSERVED THAT AS PER NOTE IN THE ACCOUNTS UNDER SCHEDULE 17, THE AUD ITOR MENTIONED THAT AS THE COMPANY HAS TRANSFERRED GEB DEPOSIT OF RS.5, 24,150/- TO ELECTRIC INSTALLATION EXPENSES IN THE CURRENT YEAR, THEREFOR E, THE AO HELD THAT ANY GEB DEPOSIT IS NOT ENTITLED FOR CLAIM OF DEPRECIATI ON WHICH IS THE DEPOSIT WITH THE GEB. DEPRECIATION WAS ACCORDINGLY DISALLOW ED IN A SUM OF RS.1,31,037/-. THE ASSESSEE SUBMITTED THAT THIS EXP ENDITURE WAS INCURRED ON ELECTRIC INSTALLATION AND IT WAS NOT GE B DEPOSIT. HOWEVER, BY MISTAKE THIS WAS ENTERED IN THE BOOKS AS GEB DEPOSI T. IT WAS, THEREFORE, SUBMITTED THAT DEPRECIATION IS ALLOWABLE. THE LEARN ED CIT(A) REJECTED THE CLAIM OF THE ASSESSEE BECAUSE NO EVIDENCE WAS FILED THAT THIS EXPENDITURE WAS FOR THE PURPOSE OF INSTRUMENT AND ELECTRICAL IN STALLATION AND DOES NOT PERTAIN TO GEB DEPOSIT ACCOUNT. AS REGARDS DISA LLOWING THE CLAIM OF DEPRECIATION ON CAPITAL EXPENDITURE FOR PURCHASE OF BOTTLES AND CRATES, LEARNED CIT(A) NOTED THAT THE PURCHASE OF THE SAME GLASS BOTTLES AND CRATES ARE NOT GENUINE. THEREFORE, DEPRECIATION SHA LL HAVE TO BE DISALLOWED. APPEAL OF THE ASSESSEE ON BOTH GROUND N OS. 2 AND 3 WERE ACCORDINGLY REJECTED. 4. THE LEARNED COUNSEL FOR THE ASSESSEE FILED APPLI CATION FOR ADMISSION OF THE ADDITIONAL EVIDENCES AND IT WAS EX PLAINED THAT THE SAME ADDITIONAL DOCUMENTS WERE NOT AVAILABLE EARLIER BEC AUSE OF THE CLOSURE OF THE ASSESSEE COMPANY. THE LEARNED COUNSEL FOR THE A SSESSEE REFERRED TO THE DESCRIPTION OF THE DOCUMENTS AS UNDER: ITA NO.1159/AHD/2007 M/S. SURBHI MILKFOOD & BEVERAGES LTD. 3 SR. NO. DESCRIPTION OF DOCUMENTS 1. LEDGER ACCOUNT OF G. E. B. LINE DEPOSIT FROM 1-4 -2000 TO 31-2-2002 2. APPLICATION AND RECEIPT NO.26520 OF GEB FOR INIT IAL CONNECTION CHARGES FOR GETTING INDUSTRIAL POWER FRO M GEB. 3. LETTER OF PAYMENT OF RS.3,96,870/- PAID FOR SERV ICE CONNECTION CHARGES FOR SUPPLY OF HT POWER. 4. BILL OF GEB FOR AUGUST 2001 AND FEBRUARY-02 5. MANUAL STOCK REGISTER SHOWING RECEIPT OF CRATES AND BOTTLES 6. COMPARATIVE CHART SHOWING PRODUCTION AND SALE IN TERMS OF QUANTITY AND VALUE 7. PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31-3-20 02 8. ANNEXURE-H OF TAX AUDIT REPORT FOR A. Y. 2001-02 AND 2002-03 9. DETAILS OF UNABSORBED DEPRECIATION & BUSINESS LO SS LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ABOVE DOCUMENTS ARE RELEVANT FOR DISPOSAL OF THE APPEAL AND GOES TO THE ROOT OF THE MATTER. HE HAS, THEREFORE, PRAYED THAT THE SAME MAY BE ADMI TTED FOR CONSIDERATION AND MATTER MAY BE RESTORED TO THE FIL E OF THE AO FOR CONSIDERATION IN ACCORDANCE WITH LAW. ON THE OTHER HAND, THE LEARNED DR SUBMITTED THAT THE SAME ADDITIONAL DOCUMENTS COULD NOT BE FILED BEFORE THE TRIBUNAL. THE DOCUMENTS CAN BE FILED ONLY IF TH E TRIBUNAL SO DESIRES. HE HAS RELIED UPON THE DECISION OF THE HONBLE M. P . HIGH COURT IN THE CASE OF CIT VS BABULAL NIM 47 ITR 846 IN WHICH IT WAS HELD THAT THE ADMISSIBILITY OF ADDITIONAL EVIDENCE UNDER RULE 29 OF THE APPELLATE TRIBUNAL RULES DEPENDS UPON WHETHER OR NOT THE TRIBUNAL REQU IRES THE EVIDENCE TO ENABLE IT TO PASS ORDERS OR FOR ANY OTHER SUBSTANTI AL CAUSE, OR IF THE INCOME-AX OFFICE HAS DECIDED THE CASE WITHOUT GIVIN G A SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO ADDUCE EVIDENCE ON P OINTS SPECIFIED BY HIM OR NOT SPECIFIED BY HIM. THE RULE DOES NOT ENABLE T HE ASSESSEE OR THE DEPARTMENT TO TENDER FRESH EVIDENCE TO SUPPORT A NE W POINT OR TO MAKE OUT A NEW CASE. ITA NO.1159/AHD/2007 M/S. SURBHI MILKFOOD & BEVERAGES LTD. 4 5. ON CONSIDERATION OF THE RIVAL SUBMISSIONS WE ARE OF THE VIEW THAT THE ASSESSEE HAS MADE OUT A CASE FOR ADMISSION OF T HE ADDITIONAL EVIDENCE. RULE 29 OF THE AT RULES PROVIDES AS UNDER : 29. THE PARTIES TO THE APPEAL SHALL NOT BE ENTITLED T O PRODUCE ADDITIONAL EVIDENCE EITHER ORAL OR DOCUMENTARY BEFO RE THE TRIBUNAL, BUT IF THE TRIBUNAL REQUIRES ANY DOCUMENTS TO BE PR ODUCED OR ANY WITNESS TO BE EXAMINED OR ANY AFFIDAVIT TO BE FILED TO ENABLE IT TO PASS ORDERS OR FOR ANY OTHER SUBSTANTIAL CAUSE, OR, IF THE INCOME-TAX AUTHORITIES HAVE DECIDED THE CASE WITHOUT GIVING SU FFICIENT OPPORTUNITY TO THE ASSESSEE TO ADDUCE EVIDENCE EITH ER ON POINTS SPECIFIED BY THEM OR NOT SPECIFIED BY THEM, THE TRI BUNAL, FOR REASONS TO BE RECORDED, MAY ALLOW SUCH DOCUMENT TO BE PRODU CED OR WITNESS TO BE EXAMINED OR AFFIDAVIT TO BE FILED OR MAY ALLO W SUCH EVIDENCE TO BE ADDUCED. THE ADDITIONAL DOCUMENTS FILED BEFORE US AS NOTED A BOVE PRIMA FACIE SUPPORTED THE CASE OF THE ASSESSEE. THEREFORE, FOR SUBSTANTIAL CAUSE OF JUSTICE AND IN DOING JUSTICE BETWEEN THE PARTIES, I T WOULD BE NECESSARY TO ADMIT THE ABOVE ADDITIONAL EVIDENCES FOR CONSIDERAT ION. THE CLAIM OF THE ASSESSEE WAS REJECTED ON THE ABOVE ISSUE BECAUSE TH E ASSESSEE FAILED TO ADDUCE SUFFICIENT EVIDENCE IN SUPPORT OF THE CONTEN TION. HOWEVER, NOW THE ASSESSEE HAS BEEN ABLE TO PRODUCE THE RELEVANT MATERIALS WHICH WOULD THROW LIGHT ON THE ABOVE GROUNDS OF APPEAL. B Y ADMITTING THESE EVIDENCES ASSESSEE WOULD NOT MAKE NEW CASE. THEREFO RE, INSTEAD OF REJECTING THE CLAIM OF THE ASSESSEE AT THE STAGE OF SECOND APPEAL, IT WOULD BE DESIRABLE TO ADMIT THE ADDITIONAL EVIDENCE FOR T HE PURPOSE OF CONSIDERATION. SINCE THE ABOVE ADDITIONAL EVIDENCES GO TO THE ROOT OF THE MATTER, WE, THEREFORE, ADMIT THIS ABOVE ADDITIONAL EVIDENCES FOR CONSIDERATION. THE REQUEST OF THE ASSESSEE FOR ADMI SSION OF THE ADDITIONAL EVIDENCE IS ACCORDINGLY ALLOWED. 6. SINCE THE ADDITIONAL EVIDENCES ARE ADMITTED AT T HIS STAGE, THEREFORE, INSTEAD OF DECIDING GROUND NOS. 2 TO 4 OF THE APPEA L, WE FEEL IT PROPER THAT THE MATTER MAY BE REMANDED TO THE FILE OF THE AO FO R RE-CONSIDERATION IN ITA NO.1159/AHD/2007 M/S. SURBHI MILKFOOD & BEVERAGES LTD. 5 VIEW OF THE ADDITIONAL EVIDENCES SO ADMITTED ABOVE. WE ACCORDINGLY, SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND RESTO RE THIS ISSUE TO THE FILE OF THE AO WITH DIRECTION TO RE-DECIDE THE ABOVE ISS UES IN THE LIGHT OF THE ADDITIONAL EVIDENCES SO ADMITTED ABOVE BY THE TRIBU NAL. THE AO SHALL RE- DECIDE THE ISSUES BY GIVING REASONABLE SUFFICIENT O PPORTUNITY OF BEING HEARD TO THE ASSESSEE. 7. AS A RESULT, APPEAL OF THE ASSESSEE IS ALLOWED F OR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 12-03-2010. SD/- SD/- (A. N. PAHUJA) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 12-03-2010 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD