A.K.Patel & Co.,(Constn.) Pvt.Ltd., Surat V. The ACIT.,Circle-1(1)(1), Surat

ITA 259/SRT/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7779 (ITAT-SURAT)
• Duration Of Justice: 3 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 22-11-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B
• Keywords: Capital expenditure
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRIPAWAN SINGH, JM &DR. A.L.SAINI, AM ./ ITA NO.259/SRT/2017 ( / ASSESSMENT YEAR: (2013-14) (VIRTUAL COURT HEARING) A.K.PATEL & CO. (CONSTRUCTION) PVT. LTD., 401-2, B WING, PRESIDENT PLAZA, NR. MAHAVIR C.T. SCAN CENTRE, NANPURA, SURAT 395001. VS. ACIT, CIRCLE-1(1)(1), AAYKAR BHAWAN, SURAT. ./ ./PAN/GIR NO.: AACCA 8128 Q (ASSESSEE) (RESPONDENT) ASSESSEE BY : SHRI KAMLESH BHATT, C.A RESPONDENT BY : SHRI B. PANDA, SR.DR / DATE OF HEARING : 28/05/2021 / DATE OF PRONOUNCEMENT : 23/08/2021 / O R D E R PER DR. A. L. SAINI, ACCOUNTANT MEMBER: CAPTIONED APPEAL FILED BY THE ASSESSEE, PERTAINING TO THE ASSESSMENT YEAR 2013-14, IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX(APPEALS)-1, SURAT DATED 11.09.2017 IN APPEAL NO. CAS/1/803/2015-16, WHICH IN TURN ARISES OUT OF AN ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 22.02.2016. GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS FOLLOWS:- 1. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE DELETED THE ADDITION OF RS.56,440/- ON ACCOUNT OF THE ALLEGED INTEREST ACCRUED MADE BY THE LD. A.O AND HENCE YOUR PETITIONER PRAYS THAT THE SAME BE DELETED. 2. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE DELETED THE DISALLOWANCE OF RS.1,86,784 OUT OF ROC EXPENSES AND HENCE YOUR PETITIONER PRAYS THAT THE SAME BE DELETED. 3. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE DELETED THE ADDITION OF RS.78,780/- FOR THE ALLEGED FAILURE TO ACCOUNT FOR AND HENCE YOUR PETITIONER PRAYS THAT THE SAME BE DELETED. PAGE | 2 ITA NO.259/SRT/2017 FOR A.Y. 13-14 A.K.PATEL & CO. 2. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE INFORMS THE BENCH THAT ASSESSEE DOES NOT WANT TO PRESS GROUND NO.3 RAISED BY IT THEREFORE, WE DISMISS THE GROUND NO.3, AS NOT PRESSED. 3. NOW WE SHALL TAKE GROUND NO.1 RAISED BY THE ASSESSEE WHICH RELATES TO ADDITION OF RS.56,440/- ON ACCOUNT OF ALLEGED INTEREST ACCRUED. 4. BRIEF FACTS QUA THE ISSUE ARE THAT DURING THE ASSESSMENT PROCEEDINGS ON PERUSAL OF THE TAX AUDIT REPORT, ASSESSING OFFICER NOTED THAT ASSESSEE-COMPANY HAD MADE INVESTMENT IN GOVERNMENT SECURITIES TO THE TUNE OF RS.7,05,500/- LAKH AND INVESTMENT IN SARDAR SAROVAR NIGAM LTD. BOND OF RS.20,22,795/-. HOWEVER, IT WAS OBSERVED BY THE ASSESSING OFFICER THAT INTEREST ACCRUED ON SUCH INVESTMENT HAS NOT ACCOUNTED FOR IN THE BOOKS OF THE ASSESSEE-COMPANY. THEREFORE, ASSESSING OFFICER HAS TAKEN THE NORMAL INTEREST EARNED ON FIXED DEPOSIT IN NATIONALIZED BANK AND CHARGED INTEREST @ 8% PER ANNUM AND ACCORDINGLY THE ASSESSING OFFICER MADE THE ADDITION OF RS.56,440/-. 5. ON APPEAL, THE LD. CIT(A) HAS CONFIRMED THE ACTION OF THE ASSESSING OFFICER. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. 6. LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSION MADE BEFORE THE AUTHORITIES BELOW. 7. ON THE OTHER HAND, LD. SR. DR FOR THE REVENUE RELIED ON THE ORDER PASSED BY THE ASSESSING OFFICER. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE NOTE THAT THIS GROUND PERTAINS TO ADDITION MADE BY THE ASSESSING OFFICER IN RESPECT OF UNDISCLOSED INTEREST ON NSC OF RS.56,440/-. WE NOTE THAT ASSESSEE DID NOT FURNISH DETAILS DURING THE ASSESSMENT PROCEEDINGS AS WELL AS APPELLATE PROCEEDINGS BEFORE LD. CIT(A). THE INTEREST ON NSC HAS ACCRUED AND PAGE | 3 ITA NO.259/SRT/2017 FOR A.Y. 13-14 A.K.PATEL & CO. THAT INTEREST HAS NOT BEEN DISCLOSED BY THE ASSESSEE IN ITS RETURN OF INCOME. THEREFORE, LD. CIT(A) HAS RIGHTLY UPHELD THE ADDITION TO THE TUNE OF RS.56,440/- MADE BY ASSESSING OFFICER. WE HAVE GONE THROUGH THE ORDER OF LD. CIT(A) AND OBSERVED THAT THERE IS NO INFIRMITY IN THE ORDER OF THE LD. CIT(A), HENCE, FINDINGS OF THE LD. CIT(A) ARE APPROVED AND UPHELD. 9. NEXT GROUND NO.2 RELATES TO ADDITION OF RS.1,86,784/- MADE ON ACCOUNT OF ROC EXPENSES. 10. BRIEF FACTS QUA THE ISSUE ARE THAT DURING THE ASSESSMENT PROCEEDINGS ASSESSING OFFICER NOTED THAT ASSESSEE HAS DEBITED ROC EXPENSES AND REGISTRATION FEE EXPENSES. THE ASSESSING OFFICER HAS TREATED THE ROC EXPENSES AS A CAPITAL EXPENDITURE WHICH GIVES ENDURING BENEFIT TO THE ASSESSEE. THEREFORE THE AMOUNT OF RS.1,86,784/- WAS DISALLOWED BY THE ASSESSING OFFICER TREATING AS CAPITAL EXPENDITURE. 11. ON APPEAL, THE LD. CIT(A) CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. AGGRIEVED BY THE ORDER OF LD. CIT(A) ASSESSEE IS IN FURTHER APPEAL BEFORE US. 12. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. LD. COUNSEL SUBMITS BEFORE US THAT PAYMENT MADE TO ROC WAS NOT FOR INCREASING IN AUTHORIZED CAPITAL BUT WAS PAID TO FILE INTIMATION OF SATISFACTION OF VARIOUS CHARGES REGISTERED ON ASSETS AND THIS IS REQUIRED WHEN THE ASSETS ARE PURCHASED THROUGH FINANCING FOR WHICH FINANCIAL INSTITUTIONS WHO ARE FINANCING THE PURCHASE AND THIS REQUIREMENT IS AS PER THE COMPANIES ACT. ON PERUSAL OF THE DETAILS WE NOTE THAT EXPENSES INCURRED PERTAIN TO LONG TERM CAPITAL BENEFIT WHICH INCLUDES PURCHASES OF ASSETS AND THE REGISTRATION RENEWAL, THEREFORE WE CONFIRM THE ORDER OF LD. CIT(A). PAGE | 4 ITA NO.259/SRT/2017 FOR A.Y. 13-14 A.K.PATEL & CO. 13. IN THE RESULT, APPEAL OF THE ASSESSEE (ITA NO.259/SRT/2017 FOR ASSESSMENT YEAR 2013-14) IS DISMISSED. ORDER IS PRONOUNCED 23/08/2021 BY PLACING RESULT ON THE NOTICE BOARD AS PER RULE 34(5) OF THE INCOME TAX (APPELLATE TRIBUNAL) RULE 1963. SD/- SD/- (PAWAN SINGH) (DR. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER SURAT/ / DATE: 23/08/2021 / DKP OUTSOURCING SR.P.S COPY OF THE ORDER FORWARDED TO 1. THE ASSESSEE 2. THE RESPONDENT 3. THE CIT(A) 4. PR.CIT 5. DR/AR, ITAT, SURAT 6. GUARD FILE BY ORDER // TRUE COPY // ASSISTANT REGISTRAR/SR. PS/PS ITAT, SURAT