Kalyani Carpenter Special Steels Ltd., V. Assistant Commissioner of Income-tax,

ITA 132/PUN/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93646 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 07-04-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 20-01-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Keywords: Capital expenditure
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE: SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO. 132 /PN/201 4 ASSESSMENT YEAR : 20 09 - 10 KALYANI CARPENTER SPECIAL STEELS LTD., 72 76, MUNDHWA, PUNE VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 11(1), PUNE (APPELLANT) (RESPONDENT) PAN NO. AABCK1779L REVENUE BY: SHRI B.C. MALAKAR ASSESSEE BY: SHRI NIKHIL PATHAK DATE OF HEARING : 07-04-2015 DATE OF PR ONOUNCEMENT : 10-04-2015 ORDER PER VIKAS AWASTHY, JM:- THE APPEAL HAS BEEN FILED BY THE ASSESSEE IMPUGNING THE O RDER OF COMMISSIONER OF INCOME TAX (APPEALS)-I, PUNE DATED 21-10- 2013 FOR THE ASSESSMENT YEAR 2009-10. THE ASSESSEE IN ITS APPEAL HA S ASSAILED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING DISALLOWANCE U/S. 40(A)(IA) OF THE INCOME TAX ACT, 1961 (HERE INAFTER REFERRED TO AS THE ACT) AND EXPENDITURE INCURRED ON R EPLACEMENT OF ROLLING MILL ROLLS BY TREATING THE SAME AS CAPITAL EXPENDITURE. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE : THE ASSESSEE IS ENGAGED IN MANUFACTURING OF STEEL. THE ASSESS EE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009-10 ON 28 -10-2009 DECLARING BUSINESS LOSS OF RS.16,18,92,098/-. THE CASE OF TH E ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE U/S. 143(2) WAS ISSUED TO THE ASSESSEE ON 24-08-2010. DURING THE COURSE OF SCRUTINY ASSESSMENT, THE 2 ITA NO. 132/PN/2014, A.Y. 2009-10 ASSESSING OFFICER MADE CERTAIN ADDITIONS/DISALLOWANCES AND PA SSED THE ASSESSMENT ORDER ON 08-12-2011. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFER RED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). TH E COMMISSIONER OF INCOME TAX (APPEALS) WHILE PARTLY ALLOWING THE APPEAL OF ASSESSEE SUSTAINED THE ADDITIONS WITH RESPECT TO DISALLO WANCE MADE U/S. 40(A)(IA) AND DISALLOWANCE OF EXPENDITURE INCURRED ON REP LACEMENT OF ROLLING MILL ROLLS. THE ASSESSEE HAS NOW COME IN SECOND A PPEAL BEFORE THE TRIBUNAL ASSAILING THE FINDINGS OF THE FIRST APPELLATE AUTH ORITY ON BOTH THE ISSUES. 3. SHRI NIKHIL PATHAK APPEARING ON BEHALF OF THE ASSESSEE S UBMITTED THAT THE FIRST ISSUE IN APPEAL WITH RESPECT TO DISALLOWANCE U/S. 40(A)(IA) OF THE ACT, IS SQUARELY COVERED BY THE DECISION OF HON'BLE C ALCUTTA HIGH COURT IN THE CASE OF CIT VS. S.K. TEKRIWAL REPORTED IN 3 61 ITR 432 (CAL.). HOWEVER, WITH RESPECT TO SECOND ISSUE, THE LD. AUTHORIZED REPRESENTATIVE (AR) FAIRLY ADMITTED THAT THE ISSUE HAS BEEN DECIDED AGAINS T THE ASSESSEE BY THE TRIBUNAL IN ITA NO. 621/PN/2012 FOR THE ASSESSMEN T YEAR 2008-09 DECIDED ON 21-03-2014. 4. ON THE OTHER HAND SHRI B.C. MALAKAR REPRESENTING THE DEPARTMENT VEHEMENTLY SUPPORTED THE FINDINGS OF THE COMMISSIONER OF INCOME TAX (APPEALS) IN SUSTAINING THE DISALLOWANCE MADE U/S. 40(A)(IA) OF THE ACT. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF BOTH THE SIDES AND HAVE PERUSED THE ORDERS OF THE AUT HORITIES BELOW. THE FIRST ISSUE IN APPEAL IS AGAINST THE DISALLOWANCE OF EXPENDITU RE RS.5,89,424/- U/S. 40(A)(IA) OF THE ACT FOR SHORT DEDUCTION OF T AX U/S. 194C AND 194H OF THE ACT. THE HON'BLE CALCUTTA HIGH CO URT IN THE CASE OF CIT VS. S.K. TEKRIWAL (SUPRA) HAS HELD THAT WHERE TAX HA S BEEN DEDUCTED AT SOURCE AND THERE IS A SHORT FALL IN DEDUCTIO N OF TAX, 3 ITA NO. 132/PN/2014, A.Y. 2009-10 DISALLOWANCE U/S. 40(A)(IA) OF THE ACT CANNOT BE MADE. IN LIGHT OF THE DECISION OF THE HON'BLE CALCUTTA HIGH COURT AND THE FACTS OF THE CASE, THIS GROUND OF APPEAL OF ASSESSEE IS ALLOWED. 6. THE SECOND GROUND OF APPEAL RELATES TO DISALLOWANCE OF EXPENDITURE INCURRED ON REPLACEMENT OF ROLLING MILL ROLLS. THE LD. AR HAS PLACED ON RECORD THE COPY OF THE ORDER OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE ITA NO. 621/PN/2012 FOR ASSESSMEN T YEAR 2008-09 DECIDED ON 21-03-2014 WHEREIN THE ISSUE HAS BEEN DECIDE D AGAINST THE ASSESSEE. WE OBSERVE THAT IN EARLIER ASSESSMENT YEARS AS WELL, THE EXPENDITURE HAS BEEN HELD TO BE CAPITAL IN NATURE. RESP ECTFULLY FOLLOWING THE SAME, WE DISMISS THIS GROUND OF APPEAL OF THE ASSESSEE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSE IS PARTLY ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 10 TH DAY OF APRIL, 2015 AT PUNE SD/- SD/- (R.K. PANDA) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 10 TH APRIL, 2015 RK/PS COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT(A) - I , PUNE 4 THE CIT - I, PUNE 5 6 THE DR, ITAT, B BENCH, PUNE. GUARD FILE. //TRUE COPY// BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, PUNE