Innoventive Industries Ltd(Erstwhile Arihant Domestic Appliances ltd.), Pune V. Dy. CIT, Circle-1(1), Pune

ITA 1393/PUN/2010

• Counselvise Citation: 139324514 RSA 2010
• Duration Of Justice: 1 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 30-11-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRS NEERA MALHOTRA
• Keywords: Revenue expenditure
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI I C SUDHIR, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO. 1393/PN/2010 (ASSESSMENT YEAR: 2006-07) INNOVATIVE INDUSTRIES LTD., .. APPELLANT (ERSTWHILE ARIHANT DOMESTIC APPLIANCES LTD.) GAT NO 1261, SANASWADI, PUNE NAGAR ROAD, PUNE 411 VS. ASSTT.COMMISSIONER OF INCOME-TAX, .. RESPONDENT CIR., SATARA APPELLANT BY : SHRI C H NANIWADEKAR RESPONDENT BY : MRS NEERA MALHOTRA DATE OF HEARING : 23.01.2012 DATE OF PRONOUNCEMENT : 30.01.2012 ORDER PER G.S. PANNU, A.M .: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, PUNE DATED 28. 1.2010 WHICH, IN TURN, HAS ARISEN FROM ORDER DATED 28.1.2010 PASSED BY THE ASSESSI NG OFFICER, UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT TH E ACT), PERTAINING TO THE ASSESSMENT YEAR 2006-07. 2. GROUND NO.1 RAISED BY THE ASSESSEE IS AS FOLLOWS: (A) THE LD CIT(A) ERRED ON FACTS AND IN LAW IN UPHOL DING DISALLOWANCE OF RS 41,71,693/- BEING DEFERRED REVENUE EXPENDITURE IN NATURE OF LOAN PROCESSING CHARGES & FEES FOR CONDUCTING TOT AL PRODUCTIVE MAINTENANCE (TPM) ON THE GROUND AND BY OBSERVING THAT THE AID CLAIM WAS NOT MADE IN THE ORIGINAL RETURN. 3. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBM ITTED THAT SIMILAR ISSUE WAS SUBJECT-MATTER OF APPEAL IN ASSESSEES CASE FOR EAR LIER ASSESSMENT YEARS AND OUR CO-ORDINATE BENCHES OF THE TRIBUNAL VIDE FOLLOWING ORDER HAVE HELD THAT ASSESSEE IS ENTITLED FOR CLAIM OF DEDUCTION OF ENTIRE SUM AND NOT 16 TH OF THE SAME. (I) ITA NO 1082/PN/2008 FOR ASSESSMENT YEAR 2005-06, VIDE ORDER DATED 23.2.2010; AND, (II) ITA NO 474/PN/2008 FOR ASSESSMENT YEAR 2004-05, V IDE ORDER DATED 5.2.2010 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE DID NOT DISPUTE THE ABOVE FACTUAL ASPECT OF THE MATTER. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THE ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE DECISIONS OF OUR CO-ORDINATE BENCH (SUPRA). THEREFOR E, FOLLOWING THE PARITY OF REASONING GIVEN IN THE ORDERS (SUPRA), WE SET ASIDE THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) AND DIRECT THE ASSESSI NG OFFICER TO ALLOW THE CLAIM OF THE ASSESSEE AMOUNTING TO RS 41,71,69 3/-. ASSESSEE SUCCEEDS ON THIS GROUND OF APPEAL. 6. THE NEXT GROUND IS AS FOLLOWS: THE LD CIT (A) ERRED ON FACTS AND IN LAW IN UPHOLDI NG AD HOC DISALLOWANCE OF RS 38,630/- OUT OF STAFF WELFARE EXPENSE S BEING 5% OF STAFF WELFARE EXPENSES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFI CER NOTICED THAT ASSESSEE HAD CLAIMED TOTAL EXPENDITURE OF RS 7,72,6 17/- UNDER VARIOUS HEADS, WHICH ALSO CONSISTED OF OTHER EXPENSES AMOUNTING TO RS 94,687/- FOR WHICH NO DETAILS WERE FURNISHED. THE ASSESSING OFFICER ACCOR DINGLY MADE A DISALLOWANCE OF RS 77,261/- BEING 10% OF THE TOTAL CLAI M. IN APPEAL, THE COMMISSIONER OF INCOME-TAX (APPEALS) RESTRICTED SUCH DISAL LOWANCE TO 5% THEREBY GRANTING A FURTHER RELIEF OF RS 38,631/-. AG AINST THE SUSTENANCE OF THE ADDITION, ASSESSEE IS IN FURTHER APPEAL BEFORE US. 7. AFTER CONSIDERING THE SUBMISSIONS OF BOTH SIDES, WE FIND THAT SIMILAR DISALLOWANCE HAD COME UP FOR CONSIDERATION BEFORE OUR CO- ORDINATE BENCH IN ASSESSEES CASE FOR EARLIER ASSESSMENT YEARS AND THE TRIBUNAL V IDE ORDERS DATED 23.2.2010 (SUPRA) AND DATED 5.2.2010 (SUPRA) HA S HELD THAT DISALLOWANCE OF RS 25,000/- WOULD MEET THE ENDS OF JUSTI CE. ON THE PARITY OF REASONING, WE UPHOLD DISALLOWANCE TO THE EXTENT OF RS 2 5,000/- ON THIS ACCOUNT AND DELETE THE REST OF THE ADDITION. ASSESSEE SUCCEED S PARTLY ON THIS GROUND. 8. THE NEXT GRIEVANCE IS REGARDING DISALLOWANCE OF RS 39 ,876/- OUT OF LOCAL CONVEYANCE AND RS 80.904/- OUT OF TRAVELLING EXPENSES. I T APPEARS FROM THE ORDERS OF THE AUTHORITIES BELOW THAT OUT OF ASSESSEES CLA IM OF LOCAL CONVEYANCE EXPENSES AMOUNTING TO RS 15,95,084/-, THE A SSESSING OFFICER MADE AD HOC DISALLOWANCE OF RS 79,754/- BEING 5% OF SUC H EXPENSES. IN APPEAL, THE COMMISSIONER OF INCOME-TAX (APPEALS) RESTRI CTED THE DISALLOWANCE TO RS 38,630/-. SIMILARLY, ASSESSEE CLAIMED TRAVELLING EX PENSES OF RS 32,26,193/- OUT OF WHICH ASSESSING OFFICER DISALLOWED RS 1 ,61,809/-. HERE ALSO, THE COMMISSIONER OF INCOME-TAX (APPEALS) RESTRICTED THE DISALLOWANCE TO RS 80,904/-. 9. AFTER CONSIDERING THE SUBMISSIONS OF BOTH SIDES, WE FIND THAT SIMILAR DISALLOWANCES HAD COME UP FOR CONSIDERATION BEFORE OUR CO- ORDINATE BENCH IN ASSESSEES CASE FOR EARLIER ASSESSMENT YEARS AND THE TRIBUNAL V IDE ORDERS DATED 23.2.2010 (SUPRA) AND DATED 5.2.2010 (SUPRA) HA S HELD THAT DISALLOWANCE OF RS 25,000/- WOULD MEET THE ENDS OF JUSTI CE. ON THE PARITY OF REASONING, WE UPHOLD DISALLOWANCE TO THE EXTENT OF RS 2 5,000/- EACH UNDER THE HEAD LOCAL CONVEYANCE EXPENSES AND TRAVELLING EXPENSES, THUS UPHOLDING TOTAL ADDITION OF RS 50,000/- OUT OF RS 1,20,780/- SUST AINED BY THE COMMISSIONER OF INCOME-TAX (APPEALS). ASSESSEE SUCCEEDS PART LY ON THIS GROUND. DECISION PRONOUNCED IN THE OPEN COURT ON 30 TH DAY OF JANUARY, 2012. SD/- SD/- (I C SUDHIR) (G.S . PANNU) JUDICIAL MEMBER ACCOUNTANT MEMB ER PUNE, DATED 30 TH JANUARY, 2012 B COPY TO:- 1) INNOVATIVE INDUSTRIES LTD. PUNE 2) DCIT CIR. 1(1) PUNE 3) THE CIT (A)-I PUNE 4 THE CIT-I PUNE 5) DR, B BENCH, I.T.A.T., PUNE. 6) GUARD FILE TRUE COPY BY ORDER SR. PS, ITAT PUNE