ACIT, Coimbatore V. M/s. Super Spinning Mills Ltd., Coimbatore

ITA 1617/CHNY/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 4483 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 13-07-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 25-07-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: OMKARESHWAR CHIDRA
• Keywords: Revenue expenditure; Set aside
• Section: 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH D CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT M EMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER ..... I.T.A. NO. 1617 / MDS/2008 ASSESSMENT YEAR : 2005-06 THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE 1(2), COIMBATORE. (APPELLANT) V. M/S SUPER SPINNING MILLS LTD. ELGI TOWERS 737 D GREEN FIELDS, PULIAKULAM ROAD COIMBATORE PAN : AADCS 0672 G (RESPONDENT) C.O. NO. 19 / MDS/2009 (IN I.T.A. NO. 1617 / MDS/2008) ) ASSESSMENT YEAR : 2005-06 M/S SUPER SPINNING MILLS LTD. ELGI TOWERS 737 D GREEN FIELDS, PULIAKULAM ROAD COIMBATORE (CROSS OBJECTOR) V. THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE 1(2), COIMBATORE. (RESPONDENT) REVENUE BY : SHRI OMKARESHWAR CHIDRA ASSESSEE BY : SHRI BHARATH I.T.A. NO. 1617/MDS/08 C.O. NO. 19/MDS/08 2 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : THIS APPEAL AND CROSS OBJECTION OF THE REVENUE AND ASSESSEE RESPECTIVELY, ARE DIRECTED AGAINST THE ORD ER OF THE LD. CIT(A)-I, COIMBATORE AND RELATES TO THE ASSESSMENT YEAR 2005-06. 2. GRIEVANCE OF THE REVENUE IS THAT THE LD. CIT(A) HAD, RELYING ON THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF CIT VS. SARAVANA SPINNING MILLS P. LTD., HELD THE EXPENSES INCURRED BY ASSESSEE FOR REPLACEMENT OF MACHINERY RS. 6,72,63,75 7/- AS ALLOWABLE BEING OF REVENUE NATURE. LD. CIT(A) ALSO RELIED ON THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF C IT VS. RAMARAJU SURGICAL COTTON MILLS LTD 294 ITR 328 FOR HOLDING TH E ISSUE IN FAVOUR OF THE ASSESSEE. CROSS OBJECTIONS FILED BY ASSESSE E IS IN SUPPORT OF THE ORDER OF THE LD. CIT(A). I.T.A. NO. 1617/MDS/08 C.O. NO. 19/MDS/08 3 3. ASSESSEE IS A UNIT ENGAGED IN MANUFACTURING OF Y ARN. IT HAD, DURING THE RELEVANT PREVIOUS YEAR, CLAIMED EXPENSES FOR REPLACEMENT OF MACHINERY LIKE COMPACT FOR RING FRAM E, FOGMASTER ATTACHMENT, ETC. ASSESSING OFFICER DISALLOWED THE CLAIM SINCE, ACCORDING TO HIM, IT WAS AN OUTGO OF CAPITAL NATURE . ASSESSEE WAS SUCCESSFUL IN ITS APPEAL BEFORE THE LD. CIT(A). 4. NOW BEFORE US, LD. D.R. SUBMITS THAT THROUGH ITS DECISION IN CIT VS. SRI MANGAYARKARASI MILLS LTD. 315 ITR 114 TH E HON'BLE APEX COURT HAD SETTLED THE LAW ON THE POINT, THOUGH IT W AS NECESSARY TO SEE WHETHER THERE WAS INCREASE IN THE INSTALLED CAP ACITY OF PRODUCTION. 5. PER CONTRA, THE LD. A.R. SUBMITTED THAT THE HON' BLE APEX COURT, IN A SUBSEQUENT DECISION IN CIT VS. HINDUSTA N TEXTILES 2037/MDS/2009 DATED 3.11.2009 HAD SET ASIDE A SIMIL AR ISSUE AND REMITTED IT BACK TO THE JURISDICTIONAL HIGH COURT F OR CONSIDERATION AFRESH BASED ON THE TESTS LAID DOWN BY IT IN THE CA SE OF CIT VS. SARAVANA SPINNING MILLS P. LTD 293 ITR 201 AND CIT V S. RAMARAJU I.T.A. NO. 1617/MDS/08 C.O. NO. 19/MDS/08 4 SURGICAL COTTON MILLS 294 ITR 328 APART FROM SRI MAN GAYARKARASI MILLS LTD.S CASE [SUPRA]. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS. HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T VS. INDRA COTTON MILLS LTD. [TCA 559 OF 2004 DATED 15.12.2009] WITH REGARD TO THE CLAIM AS REVENUE EXPENDITURE OF MACHINERY REPLACEME NT, HAS HELD THAT SUCH QUESTION HAD TO BE CONSIDERED IN VIEW OF THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF RAMARAJU SURGI CAL COTTON MILLS [SUPRA], SARAVANA SPINNING MILLS P. LTD [SUPRA], SR I MANGAYARKARASI MILLS LTD. [SUPRA] AND HINDUSTAN TEXTILES [SUPRA]. WE ARE, THEREFORE, OF THE OPINION THAT THE CLAIM OF THE ASS ESSEE REQUIRES TO BE LOOKED INTO AFRESH, BY THE ASSESSING OFFICER IN VIEW OF THE LAW LAID DOWN BY HON'BLE APEX COURT IN THE VARIOUS DECI SIONS CITED ABOVE. THEREFORE, WE SET ASIDE THE ORDERS OF THE A UTHORITIES BELOW AND REMIT THE MATTER BACK TO THE ASSESSING OFFICER FOR CONSIDERATION AFRESH IN LIGHT OF THE DECISIONS OF THE HON'BLE APE X COURT MENTIONED SUPRA. I.T.A. NO. 1617/MDS/08 C.O. NO. 19/MDS/08 5 7. IN THE RESULT, APPEAL OF THE REVENUE STANDS ALLO WED FOR STATISTICAL PURPOSES WHEREAS THE CROSS OBJECTION OF THE ASSESSEE IS DISMISSED. THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 13.07 .2010. SD/- SD/- (GEORGE MATHAN) (ABRAHAM P . GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 13 TH JULY, 2010. VL COPY TO: (1) ASSESSEE (2) ASSESSING OFFICER (3) CIT(A)-IV, CHENNAI-34 (4) CIT-IX, CHENNAI-34. (5) D.R. (6) GUARD FILE