DCIT, C-1(1), Chandigarh V. M/s Asia Resorts Limited, Chandigarh

ITA 250/CHANDI/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7797 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 08-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHABNDRAKANTA
• Assessee Lawyers: PARVEEN KAPOOR
• Keywords: Capital asset; Depreciation; Earning of tax free income; Revenue expenditure; Capital expenditure; Rule 8D
• Section: 271(1)(c); 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH A CHANDIGARH !, ' # , $ % & ' ( , )* # BEFORE: SMT. DIVA SINGH, JM & SMT.ANNAPURNA GUPTA, AM ./ ITA NO. 250/CHD/2019 ASSESSMENT YEAR : 2015-16 THE DCIT, CIRCLE 1 (1), CHANDIGARH. VS M/S ASIA RESORTS LIMITED, SCO 143-144, SECTOR 8-C, CHANDIGARH. PAN / TAN NO. : AAABCA5300M APPELLANT RESPONDENT REVENUE BY : SMT. CHABNDRAKANTA, SR.DR !' ASSESSEE BY : SHRI PARVEEN KAPOOR # $'% DATE OF HEARING : 11.07.2019 &'()'% D ATE OF PRONOUNCEMENT : 19.07.2019 )-/ ORDER PER DIVA SINGH THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE W HEREIN THE CORRECTNESS OF THE ORDER DATED 18.12.2018 OF CI T(A)-1, CHANDIGARH PERTAINING TO 2015-16 ASSESSMENT YEAR IS ASSAILED ON THE FOLLOWING GROUNDS : (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN NOT UPHOLDING DISALLOWANCE OF RS. 25,66,355/- U/S 14A O F THE INCOME TAX ACT ON THE GROUND THAT DISALLOWANCE MADE CANNOT EXCEED EXE MPT INCOME WITHOUT APPRECIATING THE FACT THAT THERE IS NO SUCH RESTRIC TION STIPULATED EITHER IN SECTION 14A OF THE INCOME TAX ACT OR RULE 8D OF THE INCOME TAX RULE. (II) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD. CIT(A) HAS ERRED IN NOT UPHOLDING DISALLOWANCE OF RS. 25,66,355/- U/S 14A O F THE INCOME TAX ACT ON THE GROUND THAT DISALLOWANCE MADE CANNOT EXCEED EXE MPT INCOME WITHOUT APPRECIATING THE FACT THAT APPLICABILITY OF SECTION 14A OR RULE 8D DOES NOT DEPEND ON EARNING OF INCOME AS HELD BY SUPREME COUR T IN THE CASE OF CIT VS. RAJENDER PRASAD MOODY (1978), 115 ITR 519. (III) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD. CIT(A) HAS ERRED IN NOT UPHOLDING DISALLOWANCE OF RS. 25,66,355/- U/S 14A O F THE INCOME TAX ACT ON THE ITA 250/CHD/2019 A.Y. 2015-16 PAGE 2 OF 7 GROUND THAT DISALLOWANCE MADE CANNOT EXCEED EXEMPT INCOME WITHOUT APPRECIATING THE FACT THAT THERE IS NO SUCH RESTRIC TION IN SECTION 14A OR IN RULE 8D AN FURTHER CLARIFIED BY CBDT CIRCULAR NO. 5 OF 2 014. (IV) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD. CIT(A) HAS ERRED IN IGNORING THE LEGISLATIVE INTENT EXPRESSED IN CBDT'S CIRCULAR NO. 5/2014 DATED 11.02.2014, WHICH EXPLICITLY STATES THAT EXPENSES R ELATABLE TO EARNING OF EXEMPT INCOME HAVE TO BE CONSIDERED FOR DISALLOWANCE IRRES PECTIVE OF THE FACT WHETHER ANY SUCH INCOME HAS BEEN EARNED DURING THE F.Y. OR NOT AS CONFIRMED BY APEX COURT IN MAXOPP INVESTMENT LTD. VS. CIT, 91 TAXMAN.COM 154(SC). (V) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD. CIT(A) HAS ERRED IN HOLDING THAT DISALLOWANCE U/S 14A CANNOT BE MADE WH ERE THERE IS NO EXEMPT INCOME, WHEN SUPREME COURT HAS UPHELD THE PRINCIPLE S OF APPORTIONMENT AND DEPARTMENT IS IN SLP ON THE SAME ISSUE IN THE CASES OF MODERATE LEASING AND CAPITAL SERVICES PVT. LTD. IN ITA NO. 102 OF 2018, A.Y. 2009-10 AND MATRIX CELLULLAR SERVICE (P) LTD. IN ITA NO. 484 OF 2017 A ND NILGIRI INFRASTRUCTURE DEVELOPMENT LTD. IN ITA NO. 135 OF 2016 AND INSTANT HOLDING LTD. IN ITA NO. 2168 OF 2011 AND SLP HAS ALSO BEEN APPROVED AGAINST THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S VARDHM AN CHEMTECH PRIVATE LTD. IN ITA NO. 322/2016. (VI) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW AND FACT IN FOLLOWING THE DECISION OF HON'BLE HIGH COURTS WHOSE FACTS WERE DISTINGUISHABLE FROM THE ASSESSEE, IGNORING THE PRI NCIPAL OF APPORTIONMENT REGARDLESS OF EXEMPT INCOME LAID DOWN BY HON HIE SU PREME COURT DECISION IN CIT VS. WALFORT SHARE AND STOCK BROKERS P LTD., 326 ITR 1(SC), AND UPHELD BY THE HON HIE SUPREME COURT IN 91 TAXMAN.COM 154(SC) . (VII) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 25,66,355/- U/S 14A DE TERMINED BY THE AO UNDER RULE 8D R.W.S.L4A TO APPORTION INTEREST EXPENDITURE INCU RRED TO INVEST IN SHARES AND EQUITY INSTRUMENT IN VIEW OF THE FACT THAT NO SEPAR ATE ACCOUNTS ARE MAINTAINED BY THE ASSESSEE IN RELATION TO INVESTMENTS WHOSE INCOM E IS EXEMPT FROM TAX, AND HAS LARGE BORROWED FUNDS IGNORING APEX COURT DECISION I N 91 TAXMAN.COM 154(SC). (VIII) ON THE FACTS AND CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) HAS ERRED IN LAW AND FACT IN FOLLOWING THE DECISION OF HON HIE HIGH COURT IN LAKHANI MARKETING DECIDED FOLLOWING DECISIONS IN THE CASE O F HERO CYCLES LTD., 323 ITR 204 AND CIT VS. WINSOME TEXTILE INDUSTRIES LTD., 31 9 ITR 204 WHOSE FACTS ARE DISTINGUISHABLE FROM THE ASSESSEE, IGNORING THE PRI NCIPAL OF APPORTIONMENT LAID DOWN BY HON'BLE SUPREME COURT DECISION IN CIT VS. W ALFORT SHARE AND STOCK BROKERS P LTD.,: 326 ITR 1(SC), WHICH HAS BEEN CONF IRMED IN 91 TAXMAN.COM 154(SC) AND THUS LEGISLATION RELYING ON WINSOME TEX TILES INDUSTRIES LTD. STANDS SUPERCEDED. (IX) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF CAPITAL IZATION OF ROPEWAY EXPENSES WHEN THE SAME WERE OF CAPITAL NATURE AND GIVING END URING BENEFIT TO THE ASSESSEE. 2. THE LD. AR INVITING ATTENTION TO SIMILAR APPEAL FILED BY THE REVENUE IN 2012-13 AND 2013-14 ASSESSMENT YEARS SUB MITTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY VIRTUE OF ITA 250/CHD/2019 A.Y. 2015-16 PAGE 3 OF 7 THE ORDER DATED 02.01.2018 IN ITA 1029 & 1030/CHD/2 017 WHEREIN SIMILAR DEPARTMENTAL APPEALS FOR 2012-13 AN D 2013-14 ASSESSMENT YEARS WERE DISMISSED. 3. THE LD. DR ON GOING THROUGH THE ORDER AGREED THA T THERE IS NO CHANGE IN FACTS, CIRCUMSTANCES OR POSITION OF LA W. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS SEEN THAT THE FIRST ISSUE ADDRESSED BY THE DEPARTMENT VIDE GROUND NO. (I) TO (VIII) HAS BEEN ADDRESSED BY THE CIT(A) IN PARA 7 WHEREIN RELY ING UPON THE VIEW TAKEN IN THE EARLIER YEARS VIDE ORDER DATED 09 .03.2017, THE ADDITION MADE BY WAY OF DISALLOWANCE WAS DELETED. RELEVANT FINDING IS REPRODUCED : 7.2 HELD: I HAVE PERUSED THE ORDER OF THE ASSESSING OFFICER A ND EXAMINED THE REPLY OF THE ASSESSEE. THIS ISSUE ON IDENTICAL FACTS HAS BEEN DE CIDED BY MY PREDECESSOR IN FAVOUR OF THE APPELLANT IN APPEAL NO. 10537/16-17, AY 2014-15 DATED 09.01.2018 . RELEVANT PORTION OF THE ORDER ARE AS UNDER: '7. GROUND OF APPEAL NO. 3:THE ASSESSING OFFICER DI SALLOWED RS. 30,23,156/- U/S 14A R.W.R. 8D OF THE INCOME TAX RULE, 1962. IT MAY BE NOTED THAT APPELLANT HAS NOT EARNED ANY EXEMPT INCOME DURING THE YEAR. IN VI EW OF THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE OF M/S LAKHAN I MARKETING INC. (226 TAXMAN 45) AND THE HON'BLE ITAT, CHANDIGARH IN THE CASE OF M/S SWAMI AUTOMOBILES PVT. LTD. IN ITA NO. 74/CHD/2015 QUOTED BY THE APPELLANT , THE ADDITION IS DELETED. THIS GROUND OF APPEAL IS ALLOWED.' 7.3. I AM IN AGREEMENT WITH THE FINDINGS OF THE LD. CIT (A)-1, CHANDIGARH. THE REFORE, BY RESPECTFULLY FOLLOWING THE SAID ORDER ADDITION MADE BY THE AO IS DELETED AND THE GROUND OF APPEAL NO .3 IS ALLOWED . 5. ON A PERUSAL OF THE ORDER OF THE CO-ORDINATE BEN CH RELIED UPON, WE FIND THAT THE ISSUE IS NO LONGER RES-INTEG RA WHICH FACT HAS BEEN NOTED BY THE CO-ORDINATE BENCH IN THE AFOR ESAID ORDER. FOR READY REFERENCE RELEVANT EXTRACT OF THE FINDING IS REPRODUCED HEREUNDER : ITA 250/CHD/2019 A.Y. 2015-16 PAGE 4 OF 7 2. THE FACTS RELATABLE TO THE 1 ST ISSUE AGITATED BY THE REVENUE ADDRESSED IN GROUND NUMBERS 1 AND 2 ARE FOUND ADDRESSED IN THE ASSESSME NT ORDER IN PARA 6 TO PARA 6.3 AND IN THE IMPUGNED ORDER IN PARA 9. A PERUSAL OF THE SAME SHO WS THAT THE ASSESSEE WAS REQUIRED TO EXPLAIN AS TO WHY DISALLOWANCE UNDER SECTION 14A RE AD WITH RULE 8 SHOULD NOT BE MADE IN VIEW OF THE FACT THAT THE ASSESSEE HAD INVESTMENTS AS ON 01.04.2011 AMOUNTING TO RS. 8,50,54,710/-. THE ASSESSEE IN RESPONSE TO THE SAME BEFORE THE AO PLACED RELIANCE UPON THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF LAKHANI MA RKETING. THE CIT(A) GRANTED RELIEF TAKING INTO CONSIDERATION THE FACT THAT THE ASSESSEE IN TH E YEAR UNDER CONSIDERATION HAD NOT EARNED ANY EXEMPT INCOME AND RELYING UPON THE AFORESAID DE CISION OF THE JURISDICTIONAL HIGH COURT AS REPORTED IN 226 TAXMANN 45 AND ORDER OF THE CHANDIG ARH BENCH IN THE CASE OF MRS SWAMI AUTOMOBILES PRIVATE LIMITED IN ITA 74/CHD/2015. THE LD. SR.DR RELIES UPON THE ASSESSMENT ORDER AND THE AUTHORISED REPRESENTATIVE OF THE ASSE SSEE RELIES UPON THE IMPUGNED ORDER. WE NOTE THAT AS FAR AS THE PRESENT ISSUE IS CONCERNED, IT IS NO LONGER RES INTEGRA AS CONSISTENTLY THE JURISDICTIONAL HIGH COURT IN THE CASE OF LAKHANI MA RKETING AND THE DELHI HIGH COURT IN THE CASE OF CHEMINVEST AND HOLCIM HAS SET THE POSITION AT REST ON THE VERY SAME ISSUE. RELYING ON THE SAID DECISION, WE HOLD THAT NO INTERFERENCE IN THE ORDER IS WARRANTED EITHER ON FACTS OF ON LAW. 6. ACCORDINGLY, ON THE FIRST ISSUE, THE APPEAL OF T HE REVENUE FAILS. 7. ON THE NEXT ISSUE, IT IS SEEN THAT THE CIT(A) CO NSIDERING SIMILAR DISALLOWANCE MADE IN THE EARLIER YEARS RELI ES UPON THE VIEW TAKEN AT THE FIRST APPELLATE STAGE IN 2013-14 ASSESSMENT YEAR AND DELETES THE ADDITION. THE RELEVANT DISCUS SION IS AVAILABLE IN PARAS 8 TO 8.3 OF THE CIT(A)S ORDER A ND IS REPRODUCED HEREUNDER FOR THE SAKE OF COMPLETENESS : 8. GROUNDS OF APPEAL NO. 4: THE APPELLANT HAS CHALL ENGED THAT AO HAS ERRED IN MAKING ADDITION ON ACCOUNT OF CAPITALIZATION OF EXPENSES T O THE TUNE OF RS.4,77,242/- DESPITE THE FACT THAT THE SAME REPRESENTS PURCHASE OF CABLE BEING RE VENUE IN NATURE, WHICH IS CHANGED WHEN EVER FOUND TO BE DEFECTIVE AND HAS NO ENDURING BENE FIT. THE ISSUE IS COWERED BY THE ORDER OF THE HONORABLE CIT(A), CHANDIGARH-I FOR THE AY 2013- 14. THE AO HAS MADE THE FOLLOWING OBSERWATIONS:- '6. CAPITALISATION OF REPAIR AND MAINTENANCE EXP ENSES:- 6.1 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, WHILE TEST CHECKING THE BOOKS OF ACCOUNTS, IT WAS SEEN THAT THE ASSESSEE HA D DEBITED AN AMOUNT OF RS.5,61,461/- ON 30.10.2014 UNDER THE HEAD 'REPAIR & MAINTENANCE OF PLANT & MACHINERY'. THE COUNSEL OF THE ASSESSEE WAS ASKED T O PRODUCE BILLSA/OUCHERS OF THESE EXPENSES AND ALSO TO EXPLAIN THE NATURE OF TH ESE EXPENSES. ON PERUSAL OF THESE BILLS IT IS SEEN THAT THESE EXPENSES WERE OF CAPITAL NATURE ON ACCOUNT OF PURCHASE OF CABLE. ACCORDINGLY, VIDE ORDER SHEET EN TRY DATED 23.03.2017, THE COUNSEL OF THE ASSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY THE EXPENSES OF RS. 5,61,461/- DEBITED UNDER THE HEAD 'REPAIR & MAINTEN ANCE' BE NOT CAPITALIZED. IN RESPONSE, COUNSEL FILED REPLY DATED 17.04.2017 WHIC H IS AS UNDER: ITA 250/CHD/2019 A.Y. 2015-16 PAGE 5 OF 7 'THE ASSESSEE COMPANY IS DERIVING ROPEWAY INCOME AN D THE MAIN CONNECTING CABLE IN ROPEWAY SYSTEM IS CHANGED EVERY YEAR IN WHICH THE R OPEWAY SYSTEM IS COMPLETELY SHUT DOWN. KEEPING IN VIEW THE SHORT LIFE OF THE CA BLE, THE EXPENDITURE RELATING TO PURCHASE OF CABLE HAS BEEN CHARGED TO REVENUE. THE PURCHASE OF CABLE IS NEITHER AN ASSET NOT ITS PURCHASE HAS ANY ENDURING BENEFIT KEE PING IN VIEW OF ITS EVERY YEARS REPLACEMENT.' 6.2 THE CONTENTION OF ASSESSEE IS NOT FOUND TO BE SATIS FACTORY. THIS EXPENDITURE IS OF CAPITAL NATURE AS THE ASSESSEE WILL DRAW ENDURIN G BENEFITS FROM IT IN THE YEARS TO COME. THE ASSESSEE CANNOT CLAIM THIS EXPENDITURE AS REVENUE EXPENDITURE IN ONE GO. MERE STATING THAT THE LIFE SPAN OF A MACHINERY OR P ART OF .A PLANT IS LESS THAN ONE YEAR DOES NOT MEAN THAN IT IS A REVENUE EXPENDITURE. IN OTHER TERMS, THE ASSESSEE IS TRYING TO CLAIM DEPRECIATION @ 100% ON PLANT & MACHINERY, WHICH HAS LIFE SPAN OF LESS THAN ONE YEAR, WHEREAS IT IS DEPRECIABLE @ 15%. 6.3 IN CIT V. MADRAS AUTO SERVICE (P) LTD. (1998) 233 I TR 468 (SC), THE HON'BLE APEX COURT SUMMARIZED THE GENERAL PRINCIPLES APPLIC ABLE IN DETERMINING WHETHER A PARTICULAR EXPENDITURE IS CAPITAL OR REVENUE EXPEND ITURE AS FOLLOWS '(I) OUTLAY IS DEEMED TO BE CAPITAL WHEN IT IS MADE FOR THE INITIATION OF A BUSINESS, FOR EXTENSION OF A BUSINESS, OR FOR A SUBSTANTIAL REPLA CEMENT OF EQUIPMENT. (2) EXPENDITURE MAY BE TREATED AS PROPERLY ATTRIBUTABLE TO CAPITAL WHEN IT IS MADE NOT ONLY ONCE AND FOR ALL, BUT WITH A VIEW TO BRING ING INTO EXISTENCE AN ASSET OR AN ADVANTAGE FOR THE ENDURING BENEFIT OF A TRADE... IF WHAT IS GOT RID OF BY A LUMP SUM- PAYMENT IS AN ANNUAL BUSINESS EXPENSE CHARGEABLE AG AINST REVENUE, THE LUMP SUM PAYMENT SHOULD EQUALLY BE REGARDED AS A BUSINESS EX PENSE, BUT IF THE LUMP SUM PAYMENT BRINGS IN A CAPITAL ASSET, THEN THAT PUTS T HE BUSINESS ON ANOTHER FOOTING ALTOGETHER. (3) WHETHER FOR THE PURPOSE OF THE EXPENDITURE, ANY CAP ITAL WAS WITHDRAWN, OR, IN OTHER WORDS, WHETHER THE OBJECT OF INCURRING THE EX PENDITURE WAS TO EMPLOY WHAT WAS TAKEN IN AS CAPITAL OF THE BUSINESS. AGAIN, IT IS T O BE SEEN WHETHER THE EXPENDITURE INCURRED- WAS PART OF THE FIXED CAPITAL OF THE BUSI NESS OR PART OF ITS CIRCULATING CAPITAL.' 6.4 FROM THE ABOVE IT IS CLEAR, IF EXPENDITURE IS M ADE FOR BRINGING INTO EXISTENCE AN ASSET OR AN ADVANTAGE FOR THE ENDURING BENEFIT OF A BUSINESS, THE EXPENDITURE NEEDS TO BE TREATED AS CAPITAL EXPENDITURE. THEREFORE FOR AM OUNT OF RS. 4,77,242/- IS DISALLOWED AND CAPITALIZED AFTER ALLOWING DEPRECATI ON @15%. ACCORDINGLY AFTER ALLOWING DEPRECATION @15% ON THE PURCHASE OF CABLE, THE TOTAL DISALLOWANCE IS RS. 4 ,77 ,242 / - (RS. 5,61,461 - RS. 5,61,461 X 15%) WHICH IS ADDED BACK TO THE INCOME OF THE ASSESSEE. I AM SATISFIED THAT THE CASE OF THE A SSESSEE IS FIT FOR INITIATING PENALTY U/S 271(1)(C) FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 8.1 PER CONTRA: IN APPEAL, THE LD. AR HAS SUBM ITTED THAT THE SAID EXPENDITURE IS REVENUE IN NATURE. THE ASSESSEE COMPANY IS DERIVING ROPEWAY INCOME AND THE MAIN CONNECTING CABLE IN ROPEWAY SYSTEM IS CHANGED EVERY YEAR IN WHICH THE ROPEWAY SYSTEM IS COMPLETELY SHUT DOWN. KEEPING IN VIEW THE SHORT LIFE OF THE CABLE, THE EXPENDITURE RELATING TO PURCHASE OF CABLE HAS BEEN CHARGED TO REVENUE. THE PURCHASE OF CABLE IS N EITHER AN ASSET NOT ITS PURCHASE HAS ANY ENDURING BENEFIT KEEPING IN VIEW OF ITS EVERY YEARS REPLACEMENT. 8.2 HELD: I HAVE PERUSED THE ORDER OF THE ASSES SING OFFICER AND EXAMINED THE REPLY OF THE ASSESSEE. THIS ISSUE ON IDENTICAL FACTS HAS BEEN DECIDED BY MY PREDECESSOR IN FAVOUR OF THE APPELLANT IN APPEAL NO. 10537/16-17, AY 2014-15 DATED 09.01.2018 . RELEVANT PORTION OF THE ORDER ARE AS UNDER: ITA 250/CHD/2019 A.Y. 2015-16 PAGE 6 OF 7 '8.2 I HAVE EXAMINED THE ISSUE AT LENGTH. SINCE THE CABLE OF ROPEWAY IS REPLACED EVERY YEAR, IT WOULD BE A REVENUE EXPENSE AND CANNOT BE CAPITAL IZED. THE ADDITION IS THEREFORE DELETED. GROUND OF APPEAL NO. 4 IS ALLOWED 8.3 I AM IN AGREEMENT WITH THE FINDINGS OF THE LD. CIT(A)-I CHANDIGARH. THEREFORE, BY RESPECTFULLY FOLLOWING THE SAID ORDER ADDITION MADE BY THE AO IS DELETED AND THE GROUND OF APPEAL NO. 4 IS ALLOWED. 8. ON A PERUSAL OF THE ASSESSMENT ORDER, IT IS SEEN THAT IDENTICAL REASONING AS CONSIDERED BY THE CIT(A) AND THE ITAT IN THE EARLIER YEARS HAS BEEN THE BASIS FOR REJECTION OF ASSESSEE'S CLAIM IN THE YEAR UNDER CONSIDERATION AS IS EVIDENC ED FROM PARAS 6 TO 6.4 OF THE ASSESSMENT ORDER. ACCORDINGLY, REL YING UPON THE VIEW TAKEN BY THE CO-ORDINATE BENCH IN THE IMMEDIAT ELY PRECEDING YEARS AS CONSIDERED IN PARA 5 AND 5.1, TH E DEPARTMENTAL APPEALS FAILS ON THE SECOND ISSUE ALSO ADDRESSED IN GROUND NO. (VIII). FOR THE SAKE OF COMPLETENESS, RE LEVANT FINDING FROM THE ORDER OF THE ITAT IS EXTRACTED HEREUNDER : 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE AO CONSIDERING THE MAINTENANCE EXP ENSES INCURRED ON PURCHASE OF CABLE, ICE CUBE MACHINE AND RESCUE MISSION HELD THA T IT WAS A CAPITAL EXPENDITURE. THE ASSESSEE RELYING ON SUBMISSIONS ADVANCED RECORDED B Y THE CIT(A) IN PARA 10.1 OF HIS ORDER PRAYED FOR RELIEF. SINCE THE FACTS RELATABLE TO THIS ASPECT HAVE BEEN ELABORATELY ADDRESSED BY THE ASSESSEE IN THE SUBMISSIONS EXTRAC TED, THE SAME ARE REPRODUCED HEREUNDER FOR READY REFERENCE : 10.1 IN APPEAL THE LD. COUNSEL FOR THE APPELLANT AR GUED THAT THE MAIN CABLE OF ROPEWAY SYSTEM WAS CHANGED EVERY YEAR THER EFORE NO ENDURING BENEFIT WAS ENJOYED BY THE APPELLANT. THE APPELLANT REPRE SENTATION IS REPRODUCED AS UNDER:- 'THE SAID DISALLOWANCE HAS BEEN MADE BY THE LEARNED A.O. ON PRESUMPTIVE/ ESTIMATE BASIS WITHOUT ANY COGENT MATERIAL ON RECOR D. THE ASSESSEE COMPANY IS DERIVING ROPEWAY INCOME AND THE MAIN CONNECTING CAB LE IN ROPEWAY SYSTEM IS CHANGED EVERY YEAR IN WHICH THE ROPEWAY SYSTEM IS C OMPLETELY SHUT DOWN. KEEPING IN VIEW THE SHORT LIFE OF THE CABLE, THE EXPENDITURE RELATING TO PURCHASE OF CABLE WAS CHARGED TO REVENUE. THE CONTE NTION OF THE LEARNED A.O. THAT THE EXPENDITURE IS MADE FOR BRINGING INTO EXISTENCE AN ASSET OR AN ADVANTAGE FOR THE ENDURING BENEFIT OF A BUSINESS IS COMPLETELY WRONG BECAUSE NEITHER THE PURCHASE OF CABLE IS AN ASSET NOR ITS P URCHASE HAS ANY ENDURING BENEFIT KEEPING IN VIEW OF ITS EVERY YEARS REPLACEM ENT. HENCE THE DISALLOWANCE DESERVED TO BE DELETED. THE FACT OF EVERY YEARS REP LACEMENT IS ALSO SUBSTANTIATED BY THE FACT THAT THE ADDITION ON THE SAME WAS ALSO MADE IN ITA 250/CHD/2019 A.Y. 2015-16 PAGE 7 OF 7 PREVIOUS ASSESSMENT ORDER AND THE ISSUE WAS ALSO RA ISED IN APPELLATE PROCEEDINGS AND THE SAME IS NOT DISPUTED BY THE LEA RNED A.O. SIMILARLY THE ICE CUBE MACHINE AND RESCUE SYSTEM ALSO HAS A VERY SHOR T LIFE SPAN KEEPING IN VIEW OF ITS USAGE IN A COMMERCIAL MANNER.' 5.1 WE FIND THAT CONSIDERING THE SAID SUBMISSION, T HE CIT(A) HAS CONCLUDED THAT THE EXPENDITURE IN REGARD TO THE REPLACEMENT IS A REVEN UE EXPENSE, SINCE ON THE OTHER 2 ASSETS I.E. ICE CUBE MACHINE AND RESCUE SYSTEM, NO ARGUMENTS WERE FOUND ADVANCED, THE SAME WERE HELD TO BE CAPITAL IN NATURE. ON CONSIDER ING THE AFORESAID CONCLUSION ON THE FACTS AS HAVE BEEN BROUGHT OUT ABOVE IN THE EARLIER PART OF THIS ORDER, WE FIND NO GOOD REASON TO VARY THE CONCLUSION ARRIVED AT AS THE REP LACEMENT OF ROPEWAYS IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE PRESENT CASE CONSIDE RING THE SHORT LIFE OF THE CABLE IS DEFINITELY A REVENUE EXPENDITURE. THE OTHER ISSUES ARE NOT BEFORE US. ACCORDINGLY, THE CONCLUSION OF THE CIT(A) THEREON IS ALSO UPHELD. 9. SAID ORDER WAS PRONOUNCED IN THE OPEN COURT AT T HE TIME OF HEARING ITSELF. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH JULY,2019. SD/- SD/- ( $ % & ' ( ) ( ! ) (ANNAPURNA GUPTA) (DIVA SINGH) )* #/ ACCOUNTANT MEMBER ' #/ JUDICIAL MEMBER % $ '+ ',- .-' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. # /' / CIT 4. # /' ( )/ THE CIT(A) 5. -01 '2 , % 2 , 34516 / DR, ITAT, CHANDIGARH 6. 15 7$ / GUARD FILE '+ # / BY ORDER, 8 / ASSISTANT REGISTRAR