EVERGREEN ENGINEERING COMPANY P. LTD, MUMBAI V. ACIT (OSD) 8(1), MUMBAI

ITA 1185/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92435 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 20-04-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 11-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LOVE KUMAR
• Keywords: Depreciation; Revenue expenditure; Capital expenditure

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE S/SHRI B.R.BASKARAN (AM) AND AMIT SHUKLA, (JM) . . , , ./ I.T.A. NO. 1185 / MUM/20 1 3 ( / ASSESSMENT YEAR : 20 0 9 - 10 ) EVERGREEN ENGINEERING COMPANY PVT LTD., 35/B, MAHAL INDUSTRIAL ESTATE , MAHAKALI CAVES ROAD, ANDHERI(E), MUMBAI - 400093 / VS. ASSTT. COMMISSIONER OF INCOME TAX (OSD) - 8(1), AAYAKAR B HAVAN, M K ROAD, MUMBAI - 400020 ( / APPELLANT ) .. ( / RESPONDENT ) ./ ./PAN/GIR NO. : AAACE2 499 L / A SSESSEES BY SHRI PARESH SHAPARIA / RE VENUE BY SHRI LOVE KUMAR / DATE OF HEARING : 20.4. 201 5 / DATE OF PRONOUNCEMENT : 24. 4 . 201 5 / O R D E R PER B.R. BASKARAN (AM) THE SOLITARY ISSUE URGED IN THE APPEAL FILED BY THE ASSESSEE IS WHETHER T HE LD CIT(A) WAS JUSTIFIED IN UPHOLDING THE ADDITION OF REPAIRS AND MAINTENANCE EXPENSES OF RS.19,12,723/ - BY TREATING THE SAME AS CAPITAL EXPENDITURE. 2. WE HEARD THE PARTIES AND PERUSED THE RECORD. THE LD A.R INVITED OUR ATTENTION TO PAGE NO.6 OF THE P APER BOOK AND SUBMITTED THAT THE EXPENDITURE OF RS.19,12,723/ - WAS INCURRED ONLY TO REPAIR AND MAINTAIN THE ITA NO. 1185 / MUM/ 201 3 2 EXISTING BUILDINGS. THE NATURE OF EXPENSES INCURRED BY THE ASSESSEE ARE GIVEN IN PAGE NO.6 AS UNDER: - EVERGREEN ENGINEERING CO. PVT. LTD. PAN: AAACE2499L ASSESSMENT YEAR: 2009 - 10 DETAILS OF BUILDING REPAIRS & MAINTENANCE PAYMENTS TO M/S PRABHU CONSTRUCTIONS SR.NO. DATE BILL NO. PARTICULARS RS. RS. I II 16/04/2008 16/04/2008 24/05/2008 15/09/2008 29/10/2008 04/05/2008 03/09/2008 6 7 5 14 26 9 12 FACTOR Y BUILDING (UNIT - I) AT ANDHERI (EAST) (21389 SQ. FT) PLOT NO.B - 35, MAHAL INDUSTRIAL ESTATE, MAHAKALI CAVES ROAD, GUNDAVLI, ANDHERI (EAST), MUMBAI - 400093 (YR 1971 - 72) REPAIRS & REPLACEMENT O F COTA FLOORING & POLISHING OF 1742.50 SQ FT WORK OF TERRACE WATER PROOFING 3041.56 SQ FT. TILES FLOORING, POLISHING, STRUCTURE WITH CONCRETE, BRICKS MASONARY PLASTER, REPLACEMENT OF SINTEX TANK OF CANTEEN TERRACE ETC. POLISHING STAIR CASE, MASOSARY, COTA FLOORING, WHITE WASH, PAINTING ETC REPAIR & REPLACEMENT FOR WELDING DEPARTMENT, TERRACE, DEMOLISHING & CONCRETE WORK 700 SQ FT, PLASTERING 15681 SQ FT, COTA FLOORING 1556 SQ FT, REPLACEMENT OF TILES 197.04 SQ FT ETC. FACTORY BUILDING (UNIT - II) AT RANGE OFFICE. VASAI (E) (PLOT AREA 8135 SQ FT - BUILT UP AREA 3468.27 SQ FT) PLOT NO. 3, SETH ATMARAM SHAH ROAD, NEAR RANGE OFFICE, VILLAGE - GOKHIWARE, TALUKA - VASAI, DIST. - THANE (YR 1997 - 98) REPLACEMENT OF FLOORING 2200 SQ FT & PLASTERING 43 SQ FT.C ONCRETING REPLACEMENT OF PVC NALA PIPES, TAL PATRI, PLUMBING FITTING, DAMBER FILLING, SHUTTER REPAIRING RCC DEMOLISHING, BRICKS 143,869 387,546 105,595 139,760 156,667 188,234 50,086 933,437 ITA NO. 1185 / MUM/ 201 3 3 III 20/06/2008 04/09/2008 1/12/2008 1/12/2008 28/01/2009 05/03/2009 10 13 27 28 38 [ 44 MASONARY, PLASTERING, PARTITIONS, WELDING FACTORY BUILDING (UNIT - V) AT CHINCHPADA, VASAI (E)(28328.20 SQ FT) PLOT NO. 9, 10, 16 & 17, CHINCHPADA, VILLAGE - GOKHIWARE, TALUKA - VASAI, DIST. - THANE (YR 2004 - 05) DEMOLISHING, CONCRETE FINISH, TILES FLOORING, WHITE WASH,ETC DEMOLISHING CONCRETE, WALL DEMOLISHING, RUBBER REMOVING, SOIL EXCAVATION, CASTING, TILING , PLUMBING FITTING, PAINTING ETC FABRICATION WORK: REPLACING OLD CHANNELS PLATE REMOVED AND ON OLD STRUCTURE CHEQUERED PLATE FIXING, WELDING, GROUTING ETC . PAINTING & CIVIL WORK - SANDTEX PAINTING RUNNING SQ FT 18596.32, OIL PAINT 470.82 SQ FT, PLASTERING, PLAST ER CHIPPING, FLOOR REPAIRING , WHITE WASH ETC. PLASTERING, CONCRETE, PLUMBING, PAINTING SANDTEX, WHITE WASH, PAINTING MAIN GATE, OIL PAINT ETC TOTAL 110,348 67,491 96,045 125,761 226,351 114,971 348,667 630,619 1,912,723 3. A PERUSAL OF THE ABOVE SAID EXPENDITURE WOULD SHOW THAT THERE IS MERIT IN THE SUBM ISSIONS OF THE ASSESSEE. THOUGH THE LD D.R STRONGLY DEFENDED THE ORDER OF LD CIT(A), YET WE ARE CONVINCED THAT THE ASSESSEE HAS INCURRED THE IMPUGNED EXPENSES ON REPAIR AND MAINTENANCE OF THE EXISTING BUILDING BY REPLACING FLOORING AND CARRYING OUT OTHER WORKS. ACCORDINGLY, WE ARE OF THE VIEW THAT THE IMPUGNED EXPENDITURE CANNOT BE IN THE NATURE OF CAPITAL EXPENDITURE IN THE ABSENCE OF CREATION OF ANY NEW ASSET OF ENDURING NATURE. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) AND DIRECT THE ASSESSING OFFICER TO ALLOW THE IMPUGNED EXPENDITURE AS ITA NO. 1185 / MUM/ 201 3 4 REVENUE EXPENDITURE. CONSEQUENT ADJUSTMENT SHALL ALSO BE MADE WITH REGARD TO THE DEPRECIATION ALLOWED BY THE ASSESSEE. 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. THE AB OVE ORDER WAS P RONOUNCED IN THE OPEN COURT ON 24TH APR , 2015 . 24TH APR , 2015 SD SD ( / AMIT SHUKLA ) ( . . / B.R. BASKARAN) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI: 24TH APR ,2015 . . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) , /ITAT, MUMBAI