DCIT, CHENNAI V. M/s. Farida Classic Shoes Pvt. Ltd., CHENNAI

ITA 2280/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7897 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 03-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SAHADEVAN
• Assessee Lawyers: S VIDYAC A
• Keywords: Revenue expenditure
• Section: 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , .. ' #$, & '( BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NO. 2280/MDS/2016 * +* / ASSESSMENT YEAR : 2013-14 DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 2 (1), CHENNAI 600 034. V. M/S.FARIDA CLASSIC SHOES PVT. LTD., NO.151/4, MOUNT POONAMALLEE ROAD, RAMAPURAM, CHENNAI 600 089. PAN : AAACF0451B (-./ APPELLANT) (/0-./ RESPONDENT) ./ ITA NO. 2281/MDS/2016 * +* / ASSESSMENT YEAR : 2013-14 DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 2 (1), CHENNAI 600 034. V. M/S.FARIDA SHOES PVT. LTD., NO.151/4, MOUNT POONAMALLEE ROAD, RAMAPURAM, CHENNAI 600 089. PAN : AAACF0496Q (-./ APPELLANT) (/0-./ RESPONDENT) -. 1 2 / APPELLANT BY : SHRI B. SAHADEVAN, JCIT /0-. 1 2 / RESPONDENTS BY : MS. S. VIDYA, CA ' 1 3& / DATE OF HEARING : 02.11.2016 45+ 1 3& / DATE OF PRONOUNCEMENT : 31.01.2017 2 I.T.A. NOS.2280 & 2281/MDS/16 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: BOTH THE APPEALS OF THE REVENUE ARE DIRECTED AGA INST THE RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)-6, CHENNAI, DATED 31.05.2016 FOR THE ASSESSMENT YEAR 2 013-14. SINCE COMMON ISSUE ARISES FOR CONSIDERATION IN BOTH THE APPEALS, WE HEARD BOTH THE APPEALS TOGETHER AND DISPOSING OF THE SAME BY THIS COMMON ORDER. 2. THE FIRST ISSUE ARISES FOR CONSIDERATION IN BOTH THE APPEALS IS DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SE CTION 14A OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') READ WITH RULE 8D OF INCOME-TAX RULES, 1962. 3. SHRI B. SAHADEVAN, THE LD. DEPARTMENTAL REPRESEN TATIVE, SUBMITTED THAT ON IDENTICAL SITUATION, THIS TRIBUNA L FOR THE ASSESSMENT YEARS 2011-12 AND 2012-13 IN I.T.A. NOS. 2102 & 2103/MDS/2015 ALLOWED AN IDENTICAL CLAIM OF THE ASS ESSEE BY PLACING ITS RELIANCE ON THE EARLIER ORDER OF THIS T RIBUNAL IN ACIT V. M/S BEST & CROMPTON ENGINEERING LTD. IN I.T.A. NO.1 603/MDS/2012 DATED 16.07.2013. THE LD. D.R. FURTHER SUBMITTED T HAT THE REVENUE 3 I.T.A. NOS.2280 & 2281/MDS/16 HAS ALREADY FILED AN APPEAL BEFORE THE HIGH COURT A GAINST THE ORDER OF THIS TRIBUNAL. 4. WE HAVE HEARD MS. S. VIDYA, THE LD. REPRESENTATI VE OF THE ASSESSEE ALSO. ADMITTEDLY, THE ISSUE OF DISALLOWAN CE UNDER SECTION 14A OF THE ACT, ON IDENTICAL CIRCUMSTANCES, WAS CON SIDERED BY THE TRIBUNAL IN THE ASSESSEE'S OWN CASE FOR ASSESSMENT YEARS 2011-12 AND 2012.13. AN IDENTICAL DISALLOWANCE WAS DELETED BY THIS TRIBUNAL BY CONFIRMING THE ORDER OF THE CIT(APPEALS ). IT IS NOT IN DISPUTE THAT THE FACTS ARE IDENTICAL TO THAT OF ASS ESSMENT YEARS 2011-12 AND 2012-13. THEREFORE, THIS TRIBUNAL DO N OT FIND ANY REASON TO TAKE A DIFFERENT VIEW. BY FOLLOWING THE ORDER OF THIS TRIBUNAL FOR ASSESSMENT YEARS 2011-12 AND 2012-13 I N THE ASSESSEE'S OWN CASE FOR THE REASONS STATED THEREIN, THE ORDER OF THE CIT(APPEALS) IS CONFIRMED. 5. THE NEXT ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO DISALLOWANCE OF EXPENDITURE ON IMPAIRMENT OF MOLDS. 6. SHRI B. SAHADEVAN, THE LD. DEPARTMENTAL REPRESEN TATIVE, SUBMITTED THAT THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS DEBITED AN AMOUNT OF ` 42,89,391/- ON ACCOUNT OF IMPAIRMENT OF 4 I.T.A. NOS.2280 & 2281/MDS/16 MOLDS. ACCORDING TO THE LD. D.R., MOLDS ARE USED F OR MANUFACTURE OF SHOES, THEREFORE, IT HAS TO BE CONSIDERED AS PLA NT AND MACHINERY. ANY WRITE OFF OR LOSS ON SALE OF MOULDS IS ON CAPIT AL ACCOUNT, THEREFORE, IT CANNOT BE ALLOWED AS REVENUE EXPENDIT URE. THE ASSESSEE BROUGHT TO THE NOTICE OF THE ASSESSING OFF ICER THE ORDER OF THIS TRIBUNAL IN M/S FARIDA LEATHERWARE PVT. LTD. I N I.T.A. NO.2304/MDS/2013. HOWEVER, THE ASSESSING OFFICER F OUND THAT AN APPEAL HAS ALREADY BEEN FILED BEFORE THE HIGH COURT AND THE SAME IS PENDING. 7. ON THE CONTRARY, MS. S. VIDYA, THE LD. REPRESENT ATIVE FOR THE ASSESSEE, SUBMITTED THAT ON IDENTICAL SET OF FACTS, THIS TRIBUNAL IN M/S FARIDA LEATHERWARE PVT. LTD. (SUPRA) FOUND THAT THE EXPENDITURE INCURRED ON THE IMPAIRMENT OF MOLDS HAS TO BE ALLOW ED AS REVENUE EXPENDITURE. THE CIT(APPEALS), IN FACT, PLACED HIS RELIANCE ON THE ORDER OF THIS TRIBUNAL. THE LD. REPRESENTATIVE FUR THER SUBMITTED THAT MERE PENDANCY OF APPEAL BEFORE THE HIGH COURT CANNO T BE A REASON TO TAKE A DIFFERENT VIEW. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE EXPENDITURE ON IMPAIRMENT OF MOLDS WAS CONSIDERED B Y THIS TRIBUNAL 5 I.T.A. NOS.2280 & 2281/MDS/16 IN M/S FARIDA LEATHERWARE PVT. LTD. (SUPRA). THIS T RIBUNAL FOUND THAT IT HAS TO BE ALLOWED AS REVENUE EXPENDITURE. SINCE FACTS ARE IDENTICAL, THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT THE CIT(APPEALS) HAS RIGHTLY PLACED HIS RELIANCE ON THE ORDER OF THIS TRIBUNAL IN M/S FARIDA LEATHERWARE PVT. LTD. (SUPRA ) AND ALLOWED THE CLAIM OF THE ASSESSEE. THEREFORE, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUT HORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 9. IN THE RESULT, BOTH THE APPEALS FILED BY THE REV ENUE ARE DISMISSED. ORDER PRONOUNCED ON 31 ST JANUARY, 2017 AT CHENNAI. SD/- SD/- ( . . ' #$ ) ( . . . ) (D.S. SUNDER SINGH) (N.R.S. GANESAN) & / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 7 /DATED, THE 31 ST JANUARY, 2017 KRI. 1 /3#8 98+3 /COPY TO: 1. -. /APPELLANT 2. /0-. /RESPONDENT 3. ' :3 () /CIT(A) 4. ' :3 /CIT 5. 8; /3 /DR 6. * < /GF.