The ACIT,GNR Circle, Gandhinagar V. Gujarat Water Infrastructure Ltd., Gandhinagar

ITA 1507/AHD/2009

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 2244 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 12-01-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 13-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAI RAI
• Assessee Lawyers: PAMIL H SHAH
• Section: 143(3)

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B AHMEDABAD BEFORE S/SHRI BHAVNESH SAINI, JM AND D.C.AGRAWAL, A M ASSTT. CIT, GANDHINAGAR. VS. GUJARAT WATER INFRASTRUCTURE LTD., 1 ST FLOOR, DR. JIVRAJ MEHTA BHAVAN, GANDHINAGAR. (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI SANJAI RAI, SR. D.R. RESPONDENT BY:- SHRI PAMIL H. SHAH, AR O R D E R PER D.C. AGRAWAL, ACCOUNTANT MEMBER . THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A) RAISING FOLLOWING GROUND:- (1) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DEL ETING THE DISALLOWANCE OF ROC FEE OF TS.5,10,000/- MADE OF U/ S 35D OF IT ACT, 1961. 2. AT THE OUTSET THE LD. AR FOR THE ASSESSEE SUBMIT TED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION O F THE TRIBUNAL IN ITA NO.1671/AHD/2008 ASST. YEAR 2005-06 IN THE CASE OF ACIT VS. M/S GUJARAT WATER INFRASTRUCTURE LTD. PRONOUNCED ON 16/ 12/2010, WHEREIN THE TRIBUNAL ALLOWED THE CLAIM AS UNDER :- ITA NO.1507/AHD/2009 ASST. YEAR 2006-07 ITA NO.1507/AHD/2009 ASST. YEAR 2006-07 2 2. GROUND NO.1 (1) THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITION AT RS.5,10,000 DISALLOWED AND CLAIMED AS ROC . 2.1. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING AS SESSMENT ORDER PASSED U/S. 143(3) OF THE I.T. ACT, 1961 DATED 23/ 11/2007 WERE THAT THE ASSESSEE-COMPANY IS ENGAGED TO PREPARE, PROMOTE FINANCE, OPERATE AND MAINTAINING DRINKING WATER SUP PLY SCHEME AND WATER PURIFICATION IN THE STATE OF GUJARAT. IN RES PECT OF THE FIRST GROUND, THE OBSERVATION OF THE ASSESSING OFFICER W AS THAT THE ASSESSEE HAS CLAIMED ROC FEES OF RS.5,10,000/- U/S.35D OF THE I.T.ACT. HOWEVER, AS PER ASSESSING OFFICER, THE FEES WAS PAID TO INCREASE THE CAPITAL OF THE COMPANY, THEREFORE, HELD THAT THE EXPENDITURE WAS CAPITAL IN NATURE . ACCORDINGLY, THE SAID CLAIM WAS DISALLOWED. WHEN THE MATTER WAS CARRIED BEFOR E THE FIRST APPELLATE AUTHORITY, IT WAS HELD AS UNDER:- 2.1. THE MATTER HAS BEEN CONSIDERED. IN VIEW OF T HE FACT THAT THE CLAIM U/S.35D HAS BEEN ADMITTED FOR ASSESS MENT YEAR 2002-03 AND FOR ASSESSMENT YEAR 2003-04 (POST CIT(A)S DIRECTIONS), THERE APPEARS TO BE NO REASON FOR THE SAME BEING NOT ALLOWED FOR THIS YEAR. IN FACT, MO ST OF THE EXPENSES COVERED U/S.35D ARE CAPITAL IN NATURE, WHICH ARE ALLOWED IN THE SHAPE OF DEFERRED REVENUE EXPENSES AND THEREFORE POSSIBLY THE ASSESSING OFFICER HAS NOT AP PRECIATED THE MERIT OF THAT SECTION. THEREFORE, THE APPELLA NTS CLAIM OF RS.5,10,000/- U/S.35D IS ALLOWED. 2.2. ON HEARING THE SUBMISSIONS OF BOTH THE SIDES, WE FI ND NO FALLACY IN THE AFORE REPRODUCED JUDGEMENT OF LEARNED CIT(APPEA LS). HE HAS RIGHTLY EXPRESSED THAT THE EXPENDITURE WHICH ARE CO VERED U/S.35D ARE CAPITAL IN NATURE, HOWEVER, STATUTE HAS ALLOWED THEM THOUGH WITH CERTAIN CONDITIONS AND IN A WAY T HOSE EXPENDITURE WERE ALLOWED AS IF THOSE ARE DEFERRED REVENUE EXPENSES. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE IN THE LIGHT OF THE STATUTORY PROVISION S, WE HEREBY CONFIRM THE VIEW TAKEN BY LEARNED CIT(APPEALS). T HIS GROUND OF THE REVENUE IS DISMISSED. ITA NO.1507/AHD/2009 ASST. YEAR 2006-07 3 SINCE IT IS AN ADMITTED POSITION THAT FACTS IN THE PRESENT CASE AND THE FACTS IN ASST. YEAR 2005-06 ARE THE SAME THERE IS NEITHER CHANGE IN LAW NOR IN CIRCUMSTANCES, THE DECISION OF THE TRIBUNAL SHOULD BE FOLLOWED THIS YEAR AS WELL. 3. THE LD. DR RELIED ON THE ORDER OF AO. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IN OUR CONSIDERED VIEW ONCE THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE , THERE IS NO REASON TO TAKE A CONTRARY VIEW. RESPECTFULLY FOLLOWING THE DE CISION OF THE TRIBUNAL, WE DISMISS THE APPEAL FILED BY THE REVENUE. THE APP EAL OF REVENUE IS DISMISSED. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER WAS PRONOUNCED IN OPEN COURT ON 21.1.11. SD/- SD/- (BHAVNESH SAINI) (D.C. AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD, DATED : 21.1.11. MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD ITA NO.1507/AHD/2009 ASST. YEAR 2006-07 4 1.DATE OF DICTATION 12/1/2011 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 13/1/ 2011 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.. 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..