Sri Shanmugavel Mills (P) Ltd., Tiruppur V. Addl. CIT, Tiruppur

ITA 1328/CHNY/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86241 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 20-01-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 11-06-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RU GEORGE IRS
• Assessee Lawyers: T BANUSEKAR
• Keywords: Revenue expenditure

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI .. , , BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ./ I.T.A. NO.1328/MDS/2013 ( ! / ASSESSMENT YEAR : 2006-2007) SRI SHANMUGAVEL MILLS (P) LTD, NO.207/86, MANGALAM ROD, KARUVAMPALAYAM, TIRUPUR 641 604. [PAN :AADCS 8200N] ( /APPELLANT) VS. THE ADDITIONAL COMMISSIONER OF INCOME TAX, TIRUPUR. ( /RESPONDENT) ' # $ / APPELLANT BY : SHRI. T. BANUSEKAR, C.A., %&' # $ / RESPONDENT BY : SMT. RUBY GEORGE, IRS, CIT. ' ( # )* /DATE OF HEARING : 20.01.2015. +,! # )* /DATE OF PRONOUNCEMENT : 20.01.2015. / O R D E R PER B.R. BASKARAN, ACCOUNTANT MEMBER THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 28.03.2013 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- II, COIMBATORE AND IT RELATES TO THE ASSESSMENT YEA R 2006-2007. THE I.T.A.NO.1328 /MDS/2013 . :- 2 -: ASSESSEE IS AGGRIEVED BY THE DECISION OF LEARNED C OMMISSIONER OF INCOME TAX (APPEALS) IN DISALLOWING THE EXPENDITURE INCURRED TOWARDS MODERNIZATION AND REPLACEMENT OF GADGETS AS REVENUE EXPENDITURE. 2. THE LEARNED COUNSEL APPEARING FOR THE ASSESSEE SUBM ITTED THAT IDENTICAL DISALLOWANCES MADE IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2007-2008 CAME UP BEFORE THE CO-ORD INATE BENCH OF THE TRIBUNAL AND THE TRIBUNAL, VIDE ITS ORDER DATED 11 TH JULY, 2013 PASSED IN ITA NO.572/MDS/2012 HAS SET ASIDE THE MAT TER TO THE FILE OF THE ASSESSING OFFICER WITH CERTAIN DIRECTIONS. THE LEARNED COUNSEL FURTHER SUBMITTED THAT THE TRIBUNAL HAD PASSED A C OMBINED ORDER AGAINST THE APPEAL FILED BY THE ASSESSEE AS WELL AS M/S. ADISANKARA SPINNING MILLS P. LTD. THE REVENUE HAS PREFERRED AN APPEAL AGAINST THE COMMON ORDER DATED 11 TH JULY, 2013 OF THE TRIBUNAL REFERRED ABOVE BEFORE THE HONBLE MADRAS HIGH COURT. THE HONBLE HIGH COURT HAS CONFIRMED THE ORDER OF THE TRIBUNAL IN REMITTING BA CK THE MATTER TO THE ASSESSING OFFICER TO ASCERTAIN THE FACTS IN RESPECT OF REPLACED MACHINERY IE., AUTO-CONER, COMBER AND LAP FORMER ET C., THE LEARNED AUTHORISED REPRESENTATIVE PRAYED THAT THE ISSUE CON TESTED IN THE PRESENT APPEAL MAY BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER. I.T.A.NO.1328 /MDS/2013 . :- 3 -: 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE DID NOT DIS AGREE WITH THE FACT SUBMITTED BY THE LEARNED AUTHORISED REPRES ENTATIVE. 4. WE HAVE GONE THROUGH THE ORDER DATED 11 TH JULY, 2013 PASSED BY THE TRIBUNAL IN THE ASSESSEES OWN CASE. WE NOT ICED THAT THE TRIBUNAL HAS RESTORED AN IDENTICAL ISSUE TO THE FIL E OF THE ASSESSING OFFICER WITH THE FOLLOWING DIRECTIONS 8. HOWEVER, ON GOING THROUGH THE ASSESSMENT ORDERS IN BOTH THESE CASES, WE FIND THAT THE ASSESSING OFFICER HAS GIVEN A FINDING THAT THE ASSESSEE HAS FURNISHED THE LIST OF MACHINE RY AS PART OF THE AUDIT REPORT IN FORM 3CD AND SUCH MACHINERY COMPRIS ES OF AUTO- CONER, COMBER AND LAP FORMER. SIMILARLY, THE COMMIS SIONER OF INCOME TAX (APPEALS) ALSO HAS GIVEN A FINDING THAT THE ASS ESSEE HAS PURCHASED NEW MACHINERIES SUCH AS AUTO-CONER, COM BER AND LAP FORMER. BUT THE ASSESSEES SUBMISSION WAS THAT IT H AD REPLACED CONVENTIONAL DRAFTING SYSTEM WITH NEW TECHNOLOGY CA LLED COMPACT SPINNING AND THIS DRAFTING SYSTEM IS SITUATED IN T HE RING FRAMES. IT WAS THE CONTENTION THAT THIS COMPACT SYSTEM IS A SINGLE PIECE GADGET AND THIS IS FIXED TO EACH SPINDLE. THEREFORE, THE ASSES SING OFFICER HAS TO ASCERTAIN AS TO WHAT IS THE MACHINERY THAT WAS REPL ACED BY THE ASSESSEE WHETHER IT WAS AUTO-CONER, COMBER AND LAP FORMER OR THE COMPACT SPINNING CONSISTING OF GADGETS FITTED TO EA CH SPINDLE WITHIN THE RING FRAMES. WE DIRECT THE ASSESSING OFFICER TO ASCERTAIN THESE FACTS AND ALLOW THE CLAIM OF THE ASSESSEE, IF THE A SSESSEE HAS INTRODUCED COMPACT SPINNING CONSISTING OF GADGETS F ITTED TO SPINDLES WITHIN THE RING FRAMES IN LINE WITH THE DECISION OF THIS TRIBUNAL IN THE CASE OF M/S. PRABHU SPINNING MILLS PVT. LTD.(SUPRA ). 5. ACCORDINGLY, WE SET ASIDE THE ORDER PASSE D BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ON THE ISSUE C ONTESTED BEFORE US AND RESTORE THE MATTER BACK TO THE FILE OF THE A SSESSING OFFICER WITH I.T.A.NO.1328 /MDS/2013 . :- 4 -: THE SIMILAR DIRECTIONS GIVEN BY THE TRIBUNAL IN ASS ESSEES OWN CASE FOR ASSESSMENT YEAR 2007-2008. 6. IN THE RESULT, THE APPEAL FILED BY THE A SSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 20TH DAY OF JANUARY, 20 15, AT CHENNAI. SD/- ( ) (VIKAS AWASTHY) /JUDICIAL MEMBER SD/- ( .. ) (B.R. BASKARAN) # / ACCOUNTANT MEMBER 1 /DATED:20.01.2015. K.V 2 # %)3 4!) /COPY TO: 1. '/ APPELLANT 2. %&' / RESPONDENT 3. ' 5) ( )/CIT(A) 4. ' 5) /CIT 5. 67 %) 8 /DR 6. 79 :( /GF.