M/S. Banik Metal Industries Pvt. Ltd., Kolkata V. ITO, Ward-1(2), Kolkata, Kolkata

ITA 2170/KOL/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3122 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 04-12-2014
• Court: TRIBUNAL
• Department Lawyers: DAVID Z CHAWNGTHU
• Assessee Lawyers: SOUMITRA CHOW DHURY
• Keywords: Depreciation; Condonation of delay; Revenue expenditure
• Section: 43B; 40A(3); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH: K OLKATA [BEFORE SHRI MAHAVIR SINGH, JM] I.T.A NO.2170/KOL/2014 ASSESSMENT YEAR: 2005-06 M/S. BANIK METAL INDUSTRIES PVT. LTD. VS. INCOME- TAX OFFICER, WD-1(2), KOLKATA (PAN: AABCB3936E) ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 01.02.2016 DATE OF PRONOUNCEMENT: 10.02.2016 FOR THE APPELLANT: SHRI SOUMITRA CHOWDHURY, ADVOC ATE FOR THE RESPONDENT: SHRI DAVID Z CHAWNGTHU, ADDL . CIT ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-XIV, KOLKATA VIDE APPEAL NO. 222/CIT(A)-XIV/KOL/11-12 DATED 14.02.2014. ASSESSME NT WAS FRAMED BY ITO, WD-1(2), KOLKATA U/S. 143(3) OF THE INCOME-TAX ACT, 1961 (H EREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2005-06 VIDE HIS ORDER DATED 31.12. 2007. 2. AT THE OUTSET, IT IS SEEN THAT THIS APPEAL BY A SSESSEE IS BARRED BY LIMITATION BY 190 DAYS AND ASSESSEE HAS FILED CONDONATION PETITION STATING THE REASON THAT HIS EARLIER CHARTERED ACCOUNTANT WAS LOOKING AFTER THE TAXATION MATTER AD VISED AGAINST FILING OF APPEAL BUT WHEN THE COMPANY APPROACHED THE PRESENT COUNSEL, ON HIS ADVI CE THE APPEAL WAS IMMEDIATELY FILED WITH DELAY CONDONATION PETITION. ON THE OTHER HAND, THE LD. SR. DR OBJECTED TO CONDONATION OF DELAY BEING A LONG DELAY I.E. OF 190 DAYS. I FIND THAT T HIS APPEAL WAS NOT FILED ON THE WRONG ADVICE OF THE COUNSEL AND AFTER CHANGE IN COUNSEL APPEAL WAS FILED PROPERLY. I FIND THAT THE CAUSE IS REASONABLE AND ACCORDINGLY, I CONDONE THE DELAY AND ADMIT THE APPEAL. 3. THE FIRST ISSUE IN THIS APPEAL OF ASSESSEE IS AG AINST THE ORDER OF CIT(A) CONFIRMING THE ACTION OF AO IN MAKING DISALLOWANCE OF PAYMENT OF E XCISE DUTY U/S. 43B OF THE ACT AMOUNTING TO RS.7,79,887/-. 4. I HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. AT THE OUTSET, IT IS SEEN THAT THIS EXCISE DUTY AMO UNTING TO RS.7,79,887/- WAS PAID THROUGH CENVAT CREDIT REGISTER. THE ASSESSEE HAS PRODUCED T HE COPIES OF TR-6 CHALLAN AND CENVAT CHALLANS IN ITS PAPER BOOK, WHICH PROVES THAT THE E XCISE DUTY COMPRISES OF RS.7,65,203/- AND EDUCATION CESS OF RS.13,345/- ON THIS EXCISE DUTY, WHICH COMES TO RS.7,78,548/-. THE ASSESSEE HAS PAID THIS AMOUNT THROUGH CENVAT REGISTER. ONCE THE CENVAT CREDIT IS AVAILABLE TO THE 2 ITA NO.2170/KOL/2014 BANIK METAL INDUSTRIES P. LTD., AY 2005-06 2 ASSESSEE AND PAID THROUGH TR-6 CHALLAN AND CENVAT C HALLANS, THESE ARE SUSTAINED TO BE PAYMENT MADE WITHIN THE DUE DATES IN TERM OF SECTIO N 43B OF THE ACT. ACCORDINGLY, I AM OF THE VIEW THAT THE AO AS WELL AS CIT(A) HAS ERRED IN MAK ING THIS ADDITION WITHOUT GOING INTO THE FACTS OF THE CASE. ACCORDINGLY, I DELETE THE ADDIT ION AND ALLOW THIS ISSUE OF ASSESSEES APPEAL. 5. THE NEXT ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) CONFIRMING THE ACTION OF THE AO IN MAKING DISALLOWANCE BY INVOKIN G THE PROVISIONS OF SECTION 40A(3) OF THE ACT AMOUNTING TO RS.1,29,580/- BEING INCURRED ON EL ECTRICAL INSTALLATION. 6. I HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. I FIND FROM THE FACTS OF THE CASE THAT THE ASSESSEE H AS INCURRED EXPENDITURE IN PURCHASE OF ELECTRICAL INSTALLATION, EQUIPMENTS AMOUNTING TO RS.6,47,900/- IN CASH. THE AO ACCORDINGLY, ADDED BACK A SUM OF RS.1,29,580/- BY INVOKING THE PROVISIONS OF SECTION 40A(3) OF THE ACT. THE CIT(A) ALSO CONFIRMED THE ACTION OF AO. I FIND FROM THE FACTS OF THE CASE THAT ASSESSEE HAS MADE PAYMENT OF RS.2,20,400/- FOR PURCHASE OF FITTINGS OF VARIOUS E LECTRONIC ITEMS FROM GOSAI ELECTROMAKE INDIA VIDE THEIR BILL NO. 115/2004-05 DATED 28.01.2005 AN D A FURTHER PAYMENT OF RS.4,27,500/- WAS MADE ON ACCOUNT OF PURCHASES OF VARIOUS ELECTRONICS ITEM FROM M/S. ASISH ELECTRICAL INDIA VIDE THEIR BILL NO. 55/25 DATED 25.01.2005. LD. COUNSEL FOR THE ASSESSEE NOW BEFORE ME STATED THAT THESE AMOUNTS ARE CAPITALIZED AND REFLECTED IN SCHE DULE D OF DETAILS OF FIXED ASSETS MAINTAINED AS PER COMPANIES ACT AND ALSO UNDER THE INCOME-TAX ACT. ACCORDING TO ASSESSEE, THESE WERE NEVER CLAIMED AS REVENUE EXPENDITURE RATHER THESE WERE CAPITALIZED AND ARE PART OF BALANCE SHEET BEING FIXED ASSETS. ON QUERY FROM THE BENCH, LD. SR. DR COULD NOT ANSWER THIS AND/OR COULD NOT CONTROVERT THE ARGUMENT OF LD. COUNSEL. AFTER HEARING BOTH THE SIDES AND PERUSING THE MATERIAL AVAILABLE ON RECORD, I FIND THAT THIS AMOU NT AS CANVASSED BY LD. COUNSEL FOR THE ASSESSEE, THESE ARE CAPITALIZED IN THE BALANCE SHEE T AND THESE ARE PART OF DEPRECIATION CHART. ONCE THE ITEMS ARE CAPITALIZED AND EXPENDITURE IS M ADE ON CAPITAL GOODS, NO DISALLOWANCE CAN BE MADE BY INVOKING THE PROVISIONS OF SECTION 40A(3) O F THE ACT. ACCORDINGLY, I DELETE THE ADDITION AND REVERSE THE ORDERS OF THE LOWER AUTHOR ITIES ON THIS ISSUE. 7. THE NEXT ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) CONFIRMING THE ACTION OF THE AO IN MAKING DISALLOWANCE OF RENT EXPENSES OF RS.1,08,000/-. 8. I HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. I FIND THAT THE AO AS WELL AS CIT(A) MADE DISALLOWANC E OF RENT PAID FOR THE REASON THAT ACCORDING TO THEM THE RENT PAID IS ONLY RS.4,000/- FOR THE YE AR ENDING 31.03.2004 BUT FOR THE YEAR ENDING 3 ITA NO.2170/KOL/2014 BANIK METAL INDUSTRIES P. LTD., AY 2005-06 3 31.03.2005 RENT CLAIM WAS RS.1,08,000/-. THE AO AS WELL AS CIT(A) BOTH DISALLOWED THIS RENT OF RS.1,08,000/- BY HOLDING THAT THE ASSESSEE DOES NOT QUALIFY TO PAY THIS MUCH RENT. I HAVE GONE THROUGH THE FACTS AND CIRCUMSTANCES AND FIND THAT T HE ASSESSEE HAS ACTUALLY PAID A SUM OF RS.1,08,000/- DURING THE YEAR ENDING 31.03.2005 AND QUA THIS HE FURNISHED COMPUTERIZED PRINT OUT OF MONTHLY RECEIPT AS RENT FOR FACTORY LAND HOL DING NO. 72/1/2/1, DHARMATOLLA ROAD, GHUSURY, HOWRAH. ONCE THERE IS A PREMISES OCCUPIED BY THE A SSESSEE ON RENT AND HE HAS PAID RENT FOR THE SAME, WITHOUT VERIFICATION, THE AO SHOULD NOT HAVE DISALLOWED. I FIND THAT THIS IS AN ALLOWABLE CLAIM AND HENCE, I DELETE THE ADDITION AND ALLOW TH E CLAIM OF THE ASSESSEE. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10.02.2016. SD/- (MAHAVIR SINGH) JUDICIAL MEMBER DATED : 10TH FEBRUARY, 2016 JD. SR. P.S COPY OF THE ORDER FORWARDED TO: 1. APPELLANT M/S. BANIK METAL INDUSTRIES PVT. LTD., 72/2, DHARMATALA ROAD, GHUSURI, HOWRAH-711107 2. RESPONDENT ITO, WARD-1(2), KOLKATA. 3. CIT(A) , KOLKATA 4. CIT , KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .