Iljin Automotive Private Limited, Kancheepuram V. ACIT Company Circle 2(3), CHENNAI

ITA 1219/CHNY/2018

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5312 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 09-04-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: CLEMENT RAMESH KUMARADDL
• Assessee Lawyers: M N RANGAMANI
• Keywords: Depreciation; Revenue expenditure

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , , $ BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER /. I.T.A. NO. 1219/CHNY/2018 / ASSESSMENT YEAR : 2005-06 ILJIN AUTOMOTIVE PRIVATE LIMITED, PLOT NO. B1 & B2, SIPCOT, INDUSTRIAL PARK, IRUNGATTUKOTTAI, SRIPERUMBUDUR, KANCHIPURAM, 602 105. [PAN: AAACI 2641E] VS. ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE 2(3), CHENNAI - 600 034. ( / APPELLANT) ( %&' /RESPONDENT ) ASSESSEE BY : SHRI. M N RANGAMANI, CA REVENUE BY : SHRI CLEMENT RAMESH KUMAR, A DDL. CIT 0 /DATE OF HEARING : 23.10.2018 0 /DATE OF PRONOUNCEMENT : 23.10.2018 / O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER : THE ASSESSEE FILED THIS APPEAL AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-13, CHENNAI IN ITA NO. 65/CIT(A)-13/2005-06 DATED 10.11.2017 FOR ASSESSMEN T YEAR 2005-06. :-2-: ITA NO. 1219/CHNY/2018 2. THE AR SUBMITTED THAT M/S. ILJIN AUTOMOTIVE PVT. LTD., THE ASSESSEE, IS ENGAGED IN THE MANUFACTURE OF AUTOMOBI LE COMPONENTS, ADMITTED TOTAL INCOME OF RS. 8,24,20,664/- FOR ASSE SSMENT YEAR 2005- 06. IN THE COMPUTATION MADE, THE ASSESSEE FAILED T O CLAIM CERTAIN REVENUE EXPENDITURE WHICH WERE TREATED AS CAPITAL E XPENDITURE IN THE BOOKS OF ACCOUNTS. AT THE TIME OF SCRUTINY ASSESSM ENT BY A LETTER DATED 11.12.2008, THE ASSESSEE SUBMITTED THAT IT HA S CAPITALIZED EXPENSES AT RS. 35,97,477/- COMPRISING REPAIRS AND MAINTENANCE, ERECTION OF WATER LINE, FACTORY IMPROVEMENT, PAINTI NG OF SHOP FLOOR. SINCE, THEY WERE OF REVENUE EXPENDITURE, IT REQUEST ED TO ALLOW SUCH EXPENDITURE AFTER WITHDRAWING THE DEPRECIATION CLAI MED BY THE ASSESSEE ON THEM. HOWEVER, IN THE ASSESSMENT ORDER , THE AO HAS NOT DEALT THIS ASPECT AT ALL. HENCE, IT FILED AN APPEA L BEFORE THE LD. CIT(A). THE LD. CIT(A) DISMISSED THE APPEAL, AS THIS ASPECT WAS NOT MENTIONED IN THE ASSESSMENT ORDER. 3. AGGRIEVED AGAINST THAT ORDER, THE ASSESSEE FILED THIS APPEAL PLEADING, INTER ALIA, THAT THE LD. CIT(A) DID NOT C ONSIDER THE MERIT OF THE CONTENTION OF THE ASSESSEE THAT THE APPELLATE A UTHORITY HAS POWER TO CONSIDER THE MATTER IGNORED AND NOT CONSIDERED B Y THE AO AND ALSO THE LEGAL POSITION THAT THE APPELLATE AUTHORITY HAS POWER TO CONSIDER ON :-3-: ITA NO. 1219/CHNY/2018 MERIT NEW GROUNDS OF APPEAL. IN SPITE OF THE FACTS THAT THE ASSESSEE HAS BROUGHT TO THE NOTICE OF THE LD. CIT(A), THE DE CISIONS OF VARIOUS HONBLE COURTS AND ITATS ETC., THE LD. CIT(A) ERRED IN NOT APPRECIATING THE FACTS & LAW AND HENCE THE APPEAL MAY BE ALLOWED . PER CONTRA, THE LD. DR SUPPORTED THE ORDERS OF THE LOWER AUTHORITIE S. 4. WE HEARD THE RIVAL SUBMISSIONS. THOUGH, IT IS A FACT THAT THE ASSESSEE HAS NOT CLAIMED THE IMPUGNED EXPENDITURE A S REVENUE EXPENDITURE IN THE COMPUTATION OF INCOME, HOWEVER, DURING THE COURSE OF ASSESSMENT IT HAS BROUGHT SUCH FACTS TO THE NOTI CE OF THE ASSESSING OFFICER AND PLEADED TO ALLOW THE CLAIM AFTER WITHDR AWING THE PROPORTIONATE DEPRECIATION ON SUCH CAPITALISED EXPE NDITURE. IT IS SETTLED THAT THE PURPOSE OF ASSESSMENT PROCEEDINGS BEFORE THE TAXING AUTHORITIES IS TO ASSESSEE CORRECTLY THE TAX LIABIL ITY OF AN ASSESSEE IN ACCORDANCE WITH LAW. COURTS HAVE HELD THAT TO ACHI EVE THIS OBJECTIVE, THERE IS NO REASON WHY A NEW GROUNDS OF APPEAL SHOU LD NOT BE ALLOWED TO BE RAISED BEFORE THE APPELLATE AUTHORITIES ETC. SINCE, THE FACTS ON THE BASIS OF WHICH THE ISSUES RAISED ARE ON RECORD AT THE ASSESSMENT PROCEEDINGS ITSELF, FOLLOWING THE DECISION OF THE S UPREME COURT IN THE CASE OF GOETZE (INDIA) LTD. VS CIT (2006) 284 ITR 3 23 (SC), WE DEEM IT FIT TO REMIT THIS ISSUE TO THE AO FOR A FRESH EX AMINATION. THE AO IS :-4-: ITA NO. 1219/CHNY/2018 AT FULL LIBERTY TO EXAMINE THE CLAIM AND DECIDE THE ISSUES IN ACCORDANCE WITH LAW. TO THIS EXTENT, THE APPEAL IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, THE ASSESSEES APPEAL IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD OCTOBER, 2018 AT CHENNAI. SD/- ( ) (GEORGE MATHAN) ! /JUDICIAL MEMBER SD/- ( ) (S. JAYARAMAN) ! /ACCOUNTANT MEMBER /CHENNAI, 5 /DATED: 23 RD OCTOBER, 2018 JPV 0%7898 /COPY TO: 1. ' / APPELLANT 2. %&' /RESPONDENT 3. ; ) ( /CIT(A) 4. ; /CIT 5. 8% /DR 6. /GF :-5-: ITA NO. 1219/CHNY/2018