DCIT, New Delhi V. M/s. Enrich Agro Food Products Ltd., New Delhi

ITA 1267/DEL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52818 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 20-09-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 11-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI K.D. RANJAN ITA NO. 1267/DEL/2011 ASSESSMENT YEAR: 2006-07 DEPUTY COMMISSIONER OF IT, VS. M/S. ENR ICH AGRO FOOD PRODUCTS CIRCLE 11(1), LTD., FLAT NO.B-1643, PKT .I, NEW DELHI. VASANT KUNJ, NEW DELHI. (PAN: AAACE0807C) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI ROHIT GARG, SR.DR RESPONDENT BY: NONE ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF LEARNED CIT(APPEALS) DATED 10.12.2010 PASSED FOR ASSESSMENT YEAR 2006-07. THE SOLITARY GRIEVANCE OF THE REVENUE IS THAT LEARNED C IT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.18,56,000 WHICH WAS ADD ED BY THE ASSESSING OFFICER ON THE GROUND THAT THE PAYMENT MADE BY THE ASSESSEE TO THE HSIDC TOWARDS EXTERNAL DEVELOPMENT CHARGES DESERVES TO BE TREATED AS CAPITAL EXPENDITURE. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS FILED ITS RETURN OF INCOME ON 27.11.2006 DECLARING AN INCOME OF RS.1,48 ,09,790. A NOTICE UNDER SEC. 143(2) OF THE ACT WAS SERVED UPON THE AS SESSEE. ASSESSING OFFICER ON AN ANALYSIS OF THE ACCOUNTS MADE AN ADDITION OF RS.18,56,000. FROM THE 2 PERUSAL OF HIS FINDING, NO REASONS ARE DISCERNIBLE. THE BRIEF DISCUSSION MADE BY HIM IN PARAGRAPH 3 READ AS UNDER: 3. DURING THE YEAR UNDER CONSIDERATION, THE ASSESS EE HAS CLAIMED REPAIR & MAINTENANCE EXPENSES OF RS.24,18,073 WHICH INCLUDES EXTERNAL DEVELOPMENT CHARGES PAID TO M/S. HSIDC OF RS.18,56,000. AS THE AMOUNT PAID TO HSIDC IS OF CAPITAL NATURE, T HE SAME IS NOT ALLOWED AS REVENUE AND ADDED TO THE INCOME OF THE A SSESSEE. PENALTY PROCEEDINGS U/S. 271(1)(C) INITIATED FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 3. BEFORE THE LEARNED CIT(APPEALS), IT WAS CONTENDE D THAT HARYANA STATE INDUSTRIAL CORPORATION LTD. HAS TO MAKE PAYMENT TO HUDA. THESE PLOTS WERE CARVED OUT BY HSIDC. THE PAYMENT WAS MEANT FOR EXTERNAL DEVELOPMENT OF THE AREA. THEREFORE, HSIDC HAD RAISE D A DEMAND UPON THE ASSESSEE WHICH WAS PAID BY IT. THERE IS NO ADDITION IN THE CONSTRUCTED AREA ON THE PLOT OF THE ASSESSEE AND NO DEVELOPMENT HAS BEEN MADE ON THE INTERNAL AREA OF THE PLOTS. LEARNED FIRST APPELLATE AUTHORITY HAS ACCEPTED THE CONTENTION OF THE ASSESSEE AND DELETED THE ADDITION . 4. IN RESPONSE TO THE NOTICE OF HEARING, NO ONE HAS COME PRESENT ON BEHALF OF THE ASSESSEE. AFTER GOING THROUGH THE FI NDINGS OF THE LEARNED CIT(APPEALS), WE DID NOT FIND ANY MERIT IN THE APPE AL OF THE REVENUE, 3 THEREFORE, WE DID NOT EXPLORE THE ALTERNATIVE MODE OF SERVICE OF NOTICE UPON THE ASSESSEE. 5. WITH THE ASSISTANCE OF LEARNED DEPARTMENTAL REPR ESENTATIVE, WE HAVE GONE THROUGH THE RECORD CAREFULLY. WE FIND THAT TH E PAYMENT MADE BY THE ASSESSEE TO THE HSIDC WAS TOWARDS THE EXTERNAL DEVE LOPMENT OF THE TOTAL AREA WHICH WAS CHARGED BY THE HSIDC @ RS. 402 PER S Q. MTR. HAD THIS AMOUNT WAS EARMARKED AT THE TIME OF ALLOTMENT OF TH E PLOT THEN THERE COULD BE A CHANCE OF AN ARGUMENT THAT IT SHOULD BE CAPITA LIZED IN THE COST OF THE PLOT BUT NO SUCH FACTS HAVE BEEN BROUGHT ON RECORD BY THE ASSESSING OFFICER. HE HAS MERELY DISALLOWED IT ON THE GROUND THAT THIS REPAIR AND MAINTENANCE WOULD GIVE ENDURING BENEFIT TO THE ASSESSEE, THEREF ORE, IT IS A CAPITAL EXPENDITURE. CONSIDERING THE FINDING OF THE LEARNED CIT(APPEALS), WE DO NOT FIND ANY ERROR IN IT. HENCE, THIS GROUND OF APP EAL IS REJECTED AND ACCORDINGLY THIS APPEAL OF THE REVENUE IS DISMISSED . 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 14.10.201 1 SD/- SD/- ( K.D. RANJAN ) ( RAJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 14/10/2011 MOHAN LAL 4 COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR