Assistant Commissioner of Income-tax, V. Hindustan Antibiotics Ltd., Pune

ITA 1589/PUN/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9532 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 14-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ASHOK KOTHARI
• Keywords: Business expenditure
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI RAJESH KUMAR, AM . / ITA NO . 1589 /P U N/201 4 / ASSESSMENT YEAR : 20 0 9 - 10 ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 9, PUNE . / APPELLANT VS. HINDUSTAN ANTIBIOTICS LTD., BOMBAY PUNE HIGHWAY, PIMPRI, PUNE 411018 PAN : AAACH5155L . / RESPONDENT / APPELLANT BY : S HRI RAJEEV KUMAR / RESPONDENT BY : SHRI ASHOK KOTHARI / DATE OF HEARING : 0 2 .05. 201 7 / DATE OF PRONOUNCEMENT: 03 . 0 5 .201 7 / ORDER PER RAJESH KUMAR, A M : TH E APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - V, PUNE DATED 06 - 05 - 2014 FOR THE ASSESSMENT YEAR 2009 - 10 ARISING OUT OF ASSESSMENT ORDER PASSED U/S. 143(3) OF THE IN COME - TAX ACT , 1961 (IN SHORT THE ACT) . ITA NO . 1589/PUN/2014 2 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE FOR POWER AND FUEL EXPENSES MADE BY THE A.O. FOR B EING NON - RELATED TO BUSINESS, BY HOLDING THAT NO DISALLOWANCE CAN BE MADE IN THE CASE OF THE ASSESSEE - COMPANY SIMPLY BECAUSE THE PERQUISITE VALUE HAS NOT BEEN TAXED IN THE HANDS OF THE EMPLOYEES. 2. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY OF THE ABOVE GROUNDS OF APPEAL. 3. THE LD. AR AT THE OUTSET POINTED OUT THAT THE ISSUE RAISED IN THE PRESENT APPEAL IS SQUARELY COVERED BY THE ORDER OF TRIBUNAL IN ASSESSEES OWN CASE RELATING TO ASSESSMENT YEAR 2008 - 09 IN ITA NO. 539/PN/2016 DATED 12 - 07 - 2016. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY IS CLAIMED RS.428.23 LACS TOWARDS POWER EXPENSES IN THE PROFIT AND LOSS ACCOUNTS WHICH INCLUDED RS.77.90 LACS RELATING TO ELECTRICITY EXPENSES OF RESIDENTIAL PREMISES USED BY THE EMPLOYEE S OF THE COMPANY. ACCORDING TO THE ASSESSING OFFICER , THE SAID EXPENDITURE ON POWER AND FUEL QUA THE RESIDENTIAL COLONY OF THE ASSESSEE COMPANY WAS NOT AN EXPENDITURE DIRECTLY RELATED TO THE BUSINESS ACTIVITY CARRIED ON BY THE ASSESSEE NOR WAS THERE ANYTH ING ON RECORD TO SHOW THE FACILITY PROVIDED TO THE EMPLOYEES WAS TAXED IN THE IR HANDS AS REQUISITES . T HEREFORE, THE SAID EXPENDITURE WAS DISALLOWED AND ADDED TO THE INCOME OF THE ASSESSEE BY THE ASSESSING OFFICER . IN THE APPELLATE PROCEEDINGS THE COMMISS IONER OF INCOME TAX (APPEALS) ALLOWED THE CLAIM OF THE APPEAL OF THE ASSESSEE BY OBSERVING AND HOLDING AS UNDER : 5. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE LEARNED COUNSEL OF THE APPELLANT SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR THE APPELL ANT IN EARLIER YEARS' APPELLATE ORDERS. AFTER VERIFICATION, IT IS SEEN THAT THE ADDITION HAS BEEN DELETED BY THE CLT(A) - III, PUNE IN A.Y. 2003 - 04, 2004 - 05 AND 2005 - 06. FOLLOWING THE ABOVE, THE ADDITION W AS ALSO DELETED IN A.Y. 2006 - 07 BY ITA NO . 1589/PUN/2014 3 THE UNDERSIGNED. S INCE, THE FACTS BEING SAME, THERE IS NO REASON FOR TAKING A DIFFERENT VIEW . ACCORDINGLY, FOLLOWING EARLIER YEARS' APPELLATE ORDERS, THE ASSESSING O FFICER IS DIRECTED TO DELETE THE ADDITION OF RS. 77,90,000/ - . THUS, THE G ROUND IS ALLOWED. 5. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) BEFORE THE TRIBUNAL. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MAT T ER INCLUDING THE IMPUGNED DECISION OF THE CO - ORDINATE BENCH IN ITA NO. 539/PN/2016 (SUPRA). WE FIND THAT IDENTICAL ISSUE OF ALLOWABLILITY OF POWER AND FUEL EXPENSES WAS DECIDED BY THE CO - ORDINATE BENCH IN FAVOUR OF THE ASSESSEE. THE RELEVANT EXTRACT OF THE OPERATIVE PART OF THE FINDINGS ARE REPRODUCED HERE - IN - BELOW : 7. WE FIND THAT SIMILAR ISSUE OF AL LOWABILITY OF POWER AND FUEL EXPENSES AROSE BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE RELATING TO ASSESSMENT YEARS 2002 - 03 TO 2005 - 06 & 2007 - 08 IN ITA NOS.751 TO 753/PN/2008, 367/PN/2009 AND 2433/PN/2012. THE TRIBUNAL VIDE CONSOLIDATED ORDER DATED 10.03.2 016 HAS HELD AS UNDER: - 17. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE FIRST ASPECT OF THE ISSUE IS THE DETERMINATION OF LOSS IN THE HANDS OF ASSESSEE, WHICH IN TURN, HAS BEEN ADJUSTED AGAINST THE BROUGHT FORWARD LOSSES, WHICH AT TH E CLOSE OF THE YEAR ARE ALSO FURTHER AVAILABLE TO THE ASSESSEE FOR ADJUSTMENT. SECONDLY, WE FIND MERIT IN THE CLAIM OF THE ASSESSEE VIS FIND MERIT IN THE CLAIM OF THE ASSESSEE VIS - - VIS THE DEDUCTION ON ACCOUNT OF POWER THE DEDUCTION ON ACCOUNT OF POWER EX PENSES. THE RESIDENTIAL COLONY ESTABLISHED BY THE ASSESSEE COMPANY HAS BEEN PROVIDED TO ITS EMPLOYEES AND IT IS INCUMBENT UPON THE ASSESSEE TO PROVIDE POWER FACILITIES TO THE SAID AREA. ON ONE HAND, THE RESIDENTIAL COLONY COMPRISES FIRST THE RESIDENTIAL AC COMMODATION PROVIDED TO THE EMPLOYEES AND IT IS THE CASE OF ASSESSEE BEFORE US THAT IN CASE ANY EXPENDITURE IS INCURRED VIS - - VIS RESIDENTIAL QUARTERS OF THE EMPLOYEES, THE SAME IS RECOVERED FROM THEM. EVEN IN CASE THE SAME IS NOT RECOVERED FROM THEM, DOES NOT MERIT THE DISALLOWANCE MADE IN THE HANDS OF ASSESSEE. FURTHER, PART OF POWER AND FUEL EXPENSES WERE INCURRED ON PROVIDING LIGHTS TO THE RESIDENTIAL COLONY AND ALSO TO THE COMMON FACILITIES PROVIDED BY THE ASSESSEE TO ITS EMPLOYEES, WHICH WAS THE OBLIG ATION OF THE ASSESSEE COMPANY AND HENCE, EXPENDITURE INCURRED TOWARDS DISCHARGE OF SAID OBLIGATION IS BUSINESS EXPENDITURE OF THE ASSESSEE COMPANY AND IS DULY ALLOWABLE IN THE HANDS OF ASSESSEE. FURTHER, THE EXPENDITURE RELATABLE TO RESIDENTIAL QUARTERS IS NO DOUBT TO BE RECOVERED FROM THE EMPLOYEES OR IS TO BE INCLUDED AS PERK IN THE HANDS OF EMPLOYEES OF THE ASSESSEE COMPANY, BUT MERELY BECAUSE NO SUCH EXERCISE WAS CARRIED ON, DOES NOT MERIT THE DISALLOWANCE OF EXPENDITURE IN THE HANDS OF ASSESSEE. ACCORD INGLY, WE UPHOLD THE ORDER ITA NO . 1589/PUN/2014 4 OF CIT(A) IN THIS REGARD AND DISMISS THE GROUND OF APPEAL RELATING TO POWER AND FUEL EXPENSES RAISED BY THE REVENUE. 8. THE ISSUE ARISING IN THE PRESENT APPEAL IS IDENTICAL TO THE ISSUE BEFORE THE TRIBUNAL AND FOLLOWING THE SAM E PARITY OF REASONING, WE UPHOLD THE ORDER OF CIT(A) AND DISMISS THE GROUND OF APPEAL RAISED BY THE REVENUE. 7. THE FACTS OF THE INSTANT CASE BEFORE US ARE MATERIALLY SAME AS IN ASSESSMENT YEAR 2008 - 09, WE, THEREFORE, RESPECTFULLY FOLLOWING THE SAME PARI TY OF REASONING, UPHOLD THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) BY DISMISSING THE APPEAL OF REVENUE. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD MAY, 2017. SD/ - SD/ - ( SUSHMA CHOWLA ) ( RAJESH KUMAR ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE ; DATED : 3 RD MAY, 201 7 . RK / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - V, PUNE ; 4. / THE CIT - V, PUNE ; 5. , , / DR A , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER, // // TRUE COPY // / ASSISTANT REGISTRAR, , / ITAT, PUNE