Shree Amardeep Rice Mill, Ahmedabad V. The Income tax Officer,Ward-6(1), Ahmedabad

ITA 1425/AHD/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5470 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 04-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K DHANESTA
• Keywords: Depreciation; Revenue expenditure; Capital expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD SMC BENCH (BEFORE SHRI G.D. AGARWAL, VICE-PRESIDENT) ITA.NO.1425/AHD/2010 ASSTT.YEAR : 2006-2007 SHREE AMARDEEP RICE MILL ADRODA ROAD, AT-BAVLA DIST AHMEDABAD 382 220. VS. ITO, WARD-6(1) AHMEDABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI R.K.DHANESTA O R D E R THIS IS ASSESSEES APPEAL AGAINST ORDER OF THE CIT (A)-XXI, AHMEDABAD DATED 23.03.2010. THE ONLY GROUND IN THIS APPEAL B Y THE ASSESSEE IS AGAINST THE DISALLOWANCE OF REPAIRING EXPENSES OF RS.1,00,000/- TREATING THE SAME AS CAPITAL EXPENDITURE. 2. AT THE TIME OF HEARING BEFORE US, NONE APPEARED ON BEHALF OF THE ASSESSEE, THOUGH NOTICE WAS SERVED ON THE ASSESSEE. THEREFORE, I PROCEED TO DISPOSE OF THE APPEAL EX PARTE AFTER HEARING THE LEARNED DR AND CONSIDERING THE MATERIAL AVAILABLE ON RECORD. 3. THE ASSESSEE DERIVES INCOME FROM RUNNING A RICE MILL. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE CLAIMED REPAIR EX PENSES OF RS.2,24,210/-. THE AO COMPARED THE SAME WITH THE PRECEDING TWO YEA RS AND FOUND THAT IN THE PRECEDING TWO YEARS, THE REPAIR EXPENDITURE WAS RS. 1,20,182/- AND RS.1,26,603/-. THUS, HE HELD THAT THERE WAS AN AB NORMAL INCREASE IN THE REPAIR EXPENSES AMOUNTING TO RS.1,00,000/-. HE THEREFORE DISALLOWED THE SUM OF RS.1,00,000/- AS CAPITAL EXPENDITURE AND ALLOWED 25 % DEPRECIATION THEREON. AFTER CONSIDERING THE ARGUMENTS OF THE LEARNED DR A ND THE FACTS OF THE CASE, IN MY OPINION, THERE WAS NO JUSTIFICATION FOR TREATING THE SUM OF RS.1,00,000/- AS ITA.NO.1425/AHD/2010 -2- CAPITAL EXPENDITURE. MERELY BECAUSE THE REPAIR EXP ENDITURE HAS INCREASED FROM RS.1,26,603/-OF LAST YEAR TO RS.2,24,210/- IT CANNO T BE PRESUMED THAT THE CAPITAL EXPENDITURE OF RS.1,00,000/- WAS CLAIMED AS REVENUE EXPENDITURE. THE AO HAS NOT POINTED OUT ANY SPECIFIC ITEMS, WHICH WAS CAPIT AL EXPENDITURE AND TREATED AS REVENUE EXPENDITURE. IN VIEW OF THE ABOVE, I DIREC T THE AO TO ALLOW THE REPAIR EXPENDITURE AS CLAIMED. CONSEQUENTLY, THE DEPRECIA TION ALLOWED ON THE SUM OF RS.1,00,000/- WOULD BE WITHDRAWN. 3. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 30 TH JULY, 2010. SD/- (G.D. AGARWAL) VICE-PRESIDENT PLACE : AHMEDABAD DATE : 30-07-2010 VK* COPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR, ITAT, AHMEDABAD