ACIT, Pune V. Automotive Stamping and Assemblies Ltd, Pune

ITA 1802/PUN/2012

• Counselvise Citation: 180224514 RSA 2012
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 10-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHARAN
• Assessee Lawyers: ANUJ DESHMUKH
• Keywords: Depreciation; Revenue expenditure; Capital expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE: SHRI G. S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO. 1802 /PN/201 2 ASSESSMENT YEAR : 2008 - 09 ASST. COMMISSIONER OF INCOME TAX, C IRCLE - 8, PUNE VS. AUTOMOTIVE STAMPING AND ASSEMBLIES LTD., G - 71/2, MIDC BHOSARI, PUNE (APPELLANT) (RESPONDENT) PAN NO. AAACJ2116M APPELLANT BY: SHRI B.Y. CHARAN RESPONDENT BY: SHRI ANUJ DESHMUKH DATE OF HEARING : 15 - 10 - 2013 DATE OF PRONOUNCEM ENT : 28 - 10 - 2013 ORDER P ER R.S. PADVEKAR , JM : - IN THIS APPEAL, THE REVENUE HAS CHALLENGED THE IMPUGNED ORDER OF THE LD. CIT(A) - V, PUNE DATED 19 - 06 - 2012 FOR THE A.Y. 2008 - 09. THE REVENUE HAS TAKEN THE FOLLOWING GROUND: 1. WHETHER ON THE FACTS AND CIRCUM STANCES OF THE CASE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN ALLOWING RS.21,00,118/ - INCURRED FOR REPAIRS AND MAINTENANCE AS REVENUE EXPENDITURE WITHOUT ANALYZING THE NATURE OF THE EXPENDITURE INCURRED, ITEMWISE AS DONE IN THE PRECEDING ASSESSMENT YEAR. 2. THE SHORT ISSUE IN CONTROVERSY IS WHETHER THE EXPENDITURE INCURRED TOWARDS REPA IRS AND MAINTENANCE IS A REVENUE EXPENDITURE. THE BRIEFLY STATED FACTS ARE AS UNDER. THE ASSESSEE COMPANY IS ENGAGED IN THE MANUFACTURING OF A RANGE OF SHEET METAL COMPONENTS , ASSEMBLIES AND SUB - ASSEMBLIES. THE SHEET METAL COMPONENTS CONSTITUTE THE SKIN AND SKELETON OF AUTOMOBILES. SHEET METAL IS ALSO USED IN THE UNDERBODY OF THE VEHICLES, IN SILENCERS, EXHAUST SYSTEMS, FUEL TANK AND IN WINDOW PANELS, BRACKETS AND SUPPORTING PANELS. THE ASSESSEE IS HAVING THREE 2 ITA NO. 1802/PN/2012, AUTOMOTIVE STAMPING AND ASSEMBLIES LTD., PUNE MANUFACTURING PLANTS, TWO IN PUNE AND ONE IN GUJRAT. THE ASSESSEES CASE FOR THE A.Y. 2008 - 09 WAS SELECTED FOR SCRUTINY . I N RESPECT OF THE ISSUE BEFORE US T HE ASSESSING OFFICER HAS NOTED THAT THE ASSESSEE HAS DEBITE D AN AMOUNT OF RS.4,20,37,847/ - UNDER THE HEAD REPAIRS AND MAINTENANCE TO PLANT AND MACHINERY. THE ASSESSEE STATED BEFORE THE ASSESSING OFFICER THAT THE EXPENDITURE TO THE EXTENT OF RS.38,407,289/ - WAS SUCH, WHERE THE BILLS WERE EACH FOR LESS THAN RS.1,5 0,000/ - AND WERE MAINLY IN THE NATURE OF BOLTS, ANNUAL MAINTENANCE CHARGES OF VARIOUS MACHINES, MOTOR WINDING, CALIBRATION CHARGES, ETC. THE ASSESSING OFFICER TREATED THE EXPENDITURE TO THE EXTENT OF RS.21,00,118/ - AS CAPITAL EXPENDITURE AND MADE ADDITIO N TO THE INCOME OF THE ASSESSEE BUT ALLOWED THE DEPRECIATION 15%. THE DETAILS OF THE EXPENDITURE ARE GIVEN IN THE ASSESSMENT ORDER IN PARA NO. 6.2: DATE OF INCURRING OF EXPENDITURE DAYS COMPLETED PARTICULARS OF EXPENDITURE AMOUNT (RS.) RATE OF D EPRECIATION AMOUNT OF DEPRECIATION 9 - APR - 07 MORE THAN 180 DAYS 50 SQ MM X 4 CORE COPPER FLEXIBLE CABLE 164,212.00 15% 24,631.80 30 - JUN - 07 MORE THAN 180 DAYS EXTERNAL MACHANICAL WORK 159,666.66 15% 23,950.00 12 - MAY - 07 MORE THAN 180 DAYS E XTERNAL MACHANICAL WORK 159,666.66 15% 23,950 .00 26 - MAY - 07 MORE THAN 180 DAYS EXTERNAL MACHANICAL WORK 159,666.66 15% 23,950.00 8 - FEB - 08 LESS THAN 180 DAYS LABOUR CHARGES FOR FAB. & MODIFICATION 167,812.50 7.5% 12,585.04 9 - MAR - 08 LESS T HAN 180 DAYS ,, LABOUR CHARGES FOR FAB. & MODIFICATION 167,500.00 7.5% 12,562.50 LO - JUL - 07 MORE THAN 180 DAYS MS PLATE 1640 X 1910 X 60 MM 176,594.45 15% 26,489.17 15 - MAY - 07 MORE THAN 180 DAYS SPOT WELDING GUN - 38KVA - NASH MAKE - X TYPE 49 5,000.00 15% 74,250.00 23 - DEC - 07 LESS THAN 180 DAYS BUSH PRESSING SPM FOR RTB 450,000.00 7.5% 33,750.00 3. THE ASSESSEE CARRIED THE ISSUE BEFORE THE LD. CIT(A) AND THE LD. CIT(A) ACCEPTED THE CONTENTION OF THE ASSESSEE THAT THE SAID EXPENDITURE IS A REVENUE EXPENDITURE AND CANNOT BE TREATED AS A CAPITAL EXPENDITURE. NOW THE REVENUE IS IN APPEAL BEFORE US. 3 ITA NO. 1802/PN/2012, AUTOMOTIVE STAMPING AND ASSEMBLIES LTD., PUNE 4. WE HAVE HEARD THE PARTIES AND ALSO ANXIOUSLY EXPLAINED THE DETAILS OF THE EXPENDITURE WHICH IS TREATED AS A CAPITAL EXPENDITURE BY THE ASSESSING OFFICER. WE FIND THAT THE EXPENDITURE IS INCURRED OF COMPONENTS LIKE CABLES, PLATES, BUSH ETC. AND FOR REPAIR AND MAINTENANCE OF EXISTING MACHINERY. THE DETAILS GIVEN BY THE ASSESSING OFFICER SUGGEST S THAT THE SAID EXPENDITURE CANNOT BE TREATED AS A CAPITAL EXPENDITURE AS IT IS IN NATURE OF RECURRING EXPENDITURE . WE FAIL TO UNDERSTAND HOW THE ASSESSING OFFICER TREATED ABOVE EXPENDITURE AS A CAPITAL EXPENDITURE. WE FIND NO FAULT IN THE ORDER OF THE LD. CIT(A) TREATING THE SAID EXPENDITURE AS A REVENUE EXPENDITURE. ACCORDINGLY, GROUND TAKEN BY THE REVENUE IS DISMISSED. 5. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 28 - 10 - 2013 SD/ - SD/ - ( G.S. PANNU ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUD ICIAL MEMBER RK /PS PUNE , DATED : 28 TH OCTOBER, 20 1 3 COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT(A) - V, PUNE 4 THE CIT - V, PUNE 5 THE DR, ITAT, B BENCH, PUNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE