Cholamandalam Distribution Services Limited, CHENNAI V. ACIT, CHENNAI

ITA 1417/CHNY/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81114 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 31-07-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 22-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GURU BHASHYAM
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Opportunity of being heard; Revenue expenditure; Capital expenditure

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . !' , # $% $& BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENTAND SHRI V. DURGA RAO, JUDICIAL MEMBER $ ./ ITA NO. 1417/MDS/2014 # ' '' / ASSESSMENT YEAR : 2009-10 M/S CHOLAMANDALAM DISTRIBUTION SERVICES LIMITED, NO.1, NSC BOSE ROAD, CHENNAI - 600 001. PAN : AABCC 4868 J V. THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE I(4), CHENNAI - 600 034. ()*/ APPELLANT) (,-)*/ RESPONDENT) )* . $ / APPELLANT BY : SHRI R. VIJAYARAGHAVAN, ADVOCATE ,-)* . $ / RESPONDENT BY : SHRI GURU BHASHYAM, JCIT $ . /0 / DATE OF HEARING : 31 ST JULY, 2014 12' . /0 / DATE OF PRONOUNCEMENT: 18 TH AUGUST, 2014 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I , CHENNAI, DATED 25.02.2014 RELEVANT TO THE ASSESSMENT YEAR 20 09-10. 2 I.T.A. NO. 1417/MDS/2014 2. IN THIS CASE, THE ASSESSEE HAS INCURRED CERTAIN EXPENSES SUCH AS WOODEN PARTITIONS, FALSE CEILING AND OTHER INTERIOR WORKS BY WAY OF RENOVATION AND DEVELOPMENT IN THE LEASED PRE MISES. THE A.O. AS WELL AS CIT(APPEALS) HAVE HELD THAT IT IS A CAPITAL EXPENDITURE. THE CASE OF THE ASSESSEE IS THAT IT I S A REVENUE EXPENDITURE. 3. AT THE TIME OF HEARING BOTH THE PARTIES SUBMITTE D THAT UNDER VERY SAME FACTS AND CIRCUMSTANCES, FOR THE ASSESSME NT YEAR 2008- 09, THE TRIBUNAL HAS REMITTED THE ISSUE BACK TO THE FILE OF THE A.O. TO EXAMINE THE ISSUE AFRESH AND SUBMITTED THAT THIS AP PEAL ALSO BE REMITTED BACK TO THE A.O. 4. WE HAVE HEARD BOTH SIDES AND PERUSED THE RECORDS AND ORDERS OF THE AUTHORITIES BELOW. THE ONLY ISSUE IN VOLVED IN THIS APPEAL IS WHETHER THE EXPENDITURE INCURRED BY THE A SSESSEE IS CAPITAL OR REVENUE IN NATURE. UNDER SIMILAR SET OF FACTS, FOR EARLIER ASSESSMENT YEAR, THE TRIBUNAL HAS REMITTED THE MATT ER BACK TO THE FILE OF THE A.O. TO CONSIDER THE ISSUE AFRESH. REL EVANT PORTION OF THE ORDER OF THE TRIBUNAL IN I.T.A. NO. 540/MDS/2013 DA TED 7 TH MARCH, 2014, FOR ASSESSMENT YEAR 2008-09, IS EXTRACTED HER EUNDER:- 3 I.T.A. NO. 1417/MDS/2014 7. WE HAVE HEARD BOTH PARTIES AND GONE THROUGH THE CASE FILE. IT IS EVIDENT TO US THAT THE ASSESS ING OFFICER AS WELL AS CIT(A) ARE UNANIMOUSLY HELD THAT THE EXPENDITURE INCURRED IN QUESTION OF ` 4,23,33,265/- IS CAPITAL IN NATURE AS IT HAS BROUGHT NEW ASSETS INTO EXISTENCE. HOWEVER, WE FIND THAT NEITHER IN THE CO URSE OF SCRUTINY NOR IN LOWER APPELLATE PROCEEDINGS, I TEM- WISE BREAKUP OF THE EXPENSES HAS BEEN DISCUSSED IN DETAIL VIS--VIS THE RELEVANT CASE LAW. WE REITERA TE THAT WHETHER AN EXPENDITURE IS CAPITAL OR REVENU E DEPENDS UPON THE RELEVANT ITEMS VIS--VIS THEIR EXAMINATION IN THE APPROPRIATE CONTEXT WHICH IS UNDISPUTEDLY MISSING IN THE INSTANT CASE. THEREFOR E, WITHOUT GOING INTO THE RELEVANT CASE LAW AND IN VIE W OF THE FACT THAT ITEM-WISE EXPENDITURE INCURRED BY THE ASSESSEE HAS NOWHERE BEEN TAKEN INTO CONSIDERATION BY THE LOWER AUTHORITIES, WE DO NOT GO INTO DEPTH O F THE JUDICIAL VERDICTS AND REMIT THE ISSUE BACK TO THE F ILE OF ASSESSING OFFICER FOR TAKING A DECISION AFRESH AFTE R ALLOWING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE LEAVE IT OPEN TO BOTH PARTIES TO RELY ON ANY OTHER CASE LAW AS WELL; IF ANY. THE RELEVANT GROUND IS ACCEPTED FOR STATISTICAL PURPOSES. 4. KEEPING IN VIEW OF THE DECISION OF THE CO-ORDINA TE BENCH OF THIS TRIBUNAL IN THE ASSESSEE'S OWN CASE UNDER SIMI LAR FACTS AND CIRCUMSTANCES, WE REMIT THE ISSUE BACK TO THE FILE OF THE A.O. TO EXAMINE THE ISSUE AFRESH IN ACCORDANCE WITH LAW. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 4 I.T.A. NO. 1417/MDS/2014 ORDER PRONOUNCED ON MONDAY, THE 18 TH OF AUGUST, 2014 AT CHENNAI. SD/- SD/- ( . . . ) ( . !' ) (DR. O.K.NARAYANAN) (V. DURGA RAO) /VICE-PRESIDENT # $% /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 18 TH AUGUST, 2014. KRI. 5 . ,#/67 87'/ /COPY TO: 1. )* /APPELLANT 2. ,-)* /RESPONDENT 3. 9/ () /CIT(A)-I, CHENNAI 4. 9/ /CIT-I, CHENNAI 5. 7:! ,#/# /DR 6. !' ; /GF.