M/s. Pure Chemical Products (P) Ltd., CHENNAI V. ACIT, Trichy

ITA 226/CHNY/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77332 (ITAT-CHENNAI)
• Duration Of Justice: 44 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2014
• Appeal Filed By: Assessee
• Assessment Year: misc
• Appeal Filed On: 01-01-1970
• Court: TRIBUNAL
• Assessee Lawyers: S SRIDHAR
• Keywords: Depreciation

Judgement Text

, , IN THE INCOME-TAX APPELLATE TRIBUNAL A BENCH, CH ENNAI . , . !' !' !' !' , # # # # $ $ $ $ BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI V. DURGA RAO, JUDICIAL MEMBER ./ I.T.A.NO.226/MDS/2013 # ' %' / ASSESSMENT YEAR :2006-07 M/S. PURE CHEMICAL PRODUCTS (P) LTD., 30/1, COLONY MAIN ROAD, CRAWFORD, TIRUCHIRAPALLI. [PAN: AAACP6641H] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE IV, TRICHY. ( &' &' &' &' /APPELLANT ) ( ()&' ()&' ()&' ()&' / RESPONDENT ) &' * + / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE ()&' * + / RESPONDENT BY : SHRI SHAJI P. JACOB, ADDL. CIT * , / DATE OF HEARING : 29.04.2014 -% * , /DATE OF PRONOUNCEMENT : 06.06.2014 . . . . / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), TIRUCHIRA PALLI, DATED 19.11.2012 RELEVANT TO THE ASSESSMENT YEAR 2006-07. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE C OMPANY IS A MANUFACTURER OF CHEMICALS, LOCATED AT EDAMALAIPATTI PUDUR, TRICHY. THE ASSESSEE HAD CLAIMED EXPENSES OF ` . 3,99,137/-. IT WAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT THESE EXPENSES WERE INCURRED FOR THE PURPOSE OF I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.226 226226 226/M/ /M/ /M/ /M/1 11 13 33 3 2 TRAVELLING, WATCHMAN SALARY, REFRESHMENTS, ETC. FOR THE MAINTENANCE OF PROPOSED PLANT AT PUDUKOTTAI. THE ASSESSING OFFICER HAS NOT CONVINCED WITH THE EXPLANATION GIVEN BY THE ASSESSEE AND OBSERVED THAT THERE IS NO PLANT EXISTING IN PUDUKOTTAI DURING THE YEAR UNDER CONSID ERATION. 3. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFOR E THE LD. CIT(APPEALS). THE LD. CIT(APPEALS), BY CONSIDERING THE EXPLANATION OF THE ASSESSEE, DIRECTED THE ASSESSING OFFICER TO ALLOW A N AMOUNT OF ` .1.00 LAKHS APART FROM WHAT THE ASSESSING OFFICER HAS ALLOWED O F ` .79,591/-. 4. ON BEING AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 5. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE EXPENSES INCURRED BY THE ASSESSEE FOR THE PURPOSE OF MAINTEN ANCE OF LAND AND PLANT AND HENCE, THE ENTIRE EXPENSES INCURRED SUCH AS TRA VEL EXPENSES, ETC. HAS TO BE ALLOWED RELATING TO THE PLANT AT PUDUKOTTAI. 6. ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THA T THE PLANT ITSELF IS NOT IN EXISTENCE DURING THE YEAR UNDER CONSIDERATION AN D THE EXPENDITURE CLAIMED BY THE ASSESSEE SHOULD NOT BE ALLOWED. 7. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE LD. CI T(APPEALS), AFTER CONSIDERING THE DETAILED SUBMISSIONS OF THE ASSESSE E ALLOWED AN AMOUNT OF ` .1.00 LAKHS ON THE GROUND THAT THERE IS EVERY POSSI BILITY THAT THE ASSESSEE COMPANY HAS INCURRED SOME EXPENDITURE TO MAINTAIN L AND AND PLANT AT I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.226 226226 226/M/ /M/ /M/ /M/1 11 13 33 3 3 PUDUKOTTAI AND ALSO SOME SALARY AND TRAVELLING EXP ENDITURE, WHICH CANNOT BE DENIED TOTALLY AND DIRECTED THE ASSESSING OFFICE R TO MODIFY THE ADDITIONS MADE . THE RELEVANT PORTION OF THE ORDER OF THE LD. CIT(APPEALS) IS EXTRACTED HEREUNDER: 4. ON VERIFYING THE GROUNDS OF APPEAL, SUBMISSION S MADE, BY THE AUTHORISED REPRESENTATIVE OF THE APPELLANT AS WELL THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS ALREADY ALLOWED THE CLAIM OF DEPRECIATION AS APPLICABLE TO THE APPELLANT ON PLANT AND MACHINERY LOCATED IN TRICHY AND ALSO SOME ADMINISTRATIVE EXPENSES TO THE EXTENT OF ` . 79,591 OUT OF THE TOTAL ADMINISTRATIVE EXPENSES CLAIMED AT ` . 4,78,728. THE ASSESSING OFFICER HAS ARRIVED AT MISCELLANEOUS EXPENSES RELATING TO PUDUK OTTAI PLANT EXPENSES AT ` . 3,99,137 AND THE SAME WAS DISALLOWED AS THE APPELLA NT HAS NOT BEEN ABLE TO SUBSTANTIATE THE CLAIM OF MISCELLANEOUS EXPENDITURE SPENT FOR PUDUKOTTAI PLANT EXPENSES EVEN UNDER SALARY, MAINTENANCE, TRAV ELLING EXPENSES NO SUPPORTIVE VOUCHERS OR LEDGER ACCOUNTS FROM THE BOO KS OF THE APPELLANT HAVE BEEN PRODUCED TO SUBSTANTIATE THE MISCELLANEOUS EXP ENSES CLAIMED IN THE NAME AND STYLE OF' PUDUKOTTAI PLANT EXPENSES AS NO EVIDENCE HAS BEEN PRODUCED EITHER BEFORE THE ASSESSING OFFICER NOR BE FORE THE UNDERSIGNED TO PROVE THE GENUINENESS OF THE EXPENDITURE MET UNDER THE HEADS SALARY MAINTENANCE, TRAVELLING EXPENSES. IN THE ABSENCE OF ANY CONCRETE PROOF IN THE HANDS OF THE APPELLANT, THE EXPENDITURE CLAIMED BY THE APPELLANT UNDER THE MISCELLANEOUS HEAD CANNOT BE ALLOWED IN TOTO. HOWEV ER, KEEPING IN VIEW OF THE EXPLANATION FILED BY THE AUTHORISED REPRESENTAT IVE OF THE APPELLANT THAT THE APPELLANT COMPANY HAD A LEASED PLANT AT VIRALIM ALAI ROAD INITIALLY AND SUBSEQUENTLY SHIFTED TO ITS OWN PLANT TO PUDUKOTTAI SIPCOT COMPLEX, THERE IS EVERY POSSIBILITY THAT APPELLANT COMPANY REQUIRED T O SPEND SOME EXPENDITURE UNDER THE MAINTENANCE OF LAND AND NEW PLANT AT PUDU KOTTAI AND ALSO SOME SALARY AND TRAVELLING EXPENDITURE, WHICH CANNOT BE DENIED TOTALLY. KEEPING IN VIEW OF THE CLAIM OF THE APPELLANT MADE UNDER MISCE LLANEOUS EXPENDITURE, A ROUND SUM AMOUNT OF ` . L,00,000 MAY BE ALLOWED FOR THE EXPENSES LIKELY TO BE MET UNDER SALARY, MAINTENANCE AND TRAVELLING EXPENS ES FOR THE YEAR UNDER CONSIDERATION. THEREFORE THE ASSESSING OFFICER IS D IRECTED TO ALLOW AN AMOUNT OF ` . 1,00,000 APART FROM WHAT HE HAS ALREADY ALLOWED AT ` . 79,591. THUS OUT OF THE ADDITION OF ` . 3,99,137 MADE BY THE ASSESSING OFFICER, ` . 2,99,137 IS CONFIRMED. THE ASSESSING OFFICER IS DIRECTED TO ACC ORDINGLY MODIFY THE ADDITION MADE AND CALCULATE THE TAX AND INTEREST AS APPLICABLE. 8. THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE EITHE R BEFORE THE ASSESSING OFFICER OR BEFORE THE LD. CIT(APPEALS) OR EVEN BEFORE THE TRIBUNAL I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.226 226226 226/M/ /M/ /M/ /M/1 11 13 33 3 4 TOWARDS INCURRING EXPENDITURE UNDER THE HEAD SALARY MAINTENANCE, TRAVELLING EXPENSES, ETC. AS CLAIMED BY THE ASSESSEE. HOWEVER, SINCE THERE IS EVERY POSSIBILITY THAT THE ASSESSEE COMPANY WOULD HAVE IN CURRED SOME EXPENDITURE UNDER THE MAINTENANCE OF LAND FOR THE N EW PLANT AT PUDUKOTTAI AND ALSO SOME SALARY AND TRAVELLING EXPENDITURE, ET C., WHICH CANNOT BE DENIED. THEREFORE, THE LD. CIT(APPEALS) HAS RIGHTLY DIRECTED THE ASSESSING OFFICER TO ALLOW AN AMOUNT OF ` .1.00 LAKHS APART FROM WHAT THE ASSESSING OFFICER HAS ALREADY ALLOWED AT ` .79,591/- AND MODIFY THE ADDITION MADE AND CALCULATE THE TAX AND INTEREST AS APPLICABLE. THERE FORE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER PASSED BY THE LD . CIT(APPEALS), WHICH IS CONFIRMED AND DISMISS THE GROUNDS RAISED BY THE ASS ESSEE. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 6 TH OF JUNE, 2014 AT CHENNAI. SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (V. DURGA RAO) JUDICIAL MEMBER CHENNAI, DATED, THE 06.06.2014 VM/- . * (#,/0 10%, /COPY TO: 1. &' / APPELLANT, 2. ()&' / RESPONDENT, 3. 2 ( ) /CIT(A), 4. 2 /CIT, 5. 03! (#,# /DR & 6. !4' 5 /GF.