SCHOTT GLASS INDIA P. LTD, MUMBAI V. ITO WD 8(3)(1), MUMBAI

ITA 2876/MUM/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56170 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 08-12-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 05-05-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR B SENTHIL KUMAR
• Keywords: Depreciation; Wholly owned subsidiary; Commercial expediency

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER, A ND SHRI V. DURGA RAO, JUDICIAL MEMBER ITA NO. 8550/MUM./2004 (ASSESSMENT YEAR : 2001-02 ) SCHOTT GLASS INDIA PVT. LTD. DYNASTY, A-WING, 303 & 304 SANGAM THEATRE, ANDHERI- KURLA ROAD, ANDHERI (E) MUMBAI 400 059 PAN AADCS8583L .. APPELLANT V/S DY. COMMISSIONER OF INCOME TAX RANGE-8(3), MUMBAI .... RESPONDENT ITA NO. 8891/MUM./2004 (ASSESSMENT YEAR : 2001-02 ) DY. COMMISSIONER OF INCOME TAX RANGE-8(3), MUMBAI .. APPELLANT V/S SCHOTT GLASS INDIA PVT. LTD. DYNASTY, A-WING, 303 & 304 SANGAM THEATRE, ANDHERI- KURLA ROAD, ANDHERI (E) MUMBAI 400 059 PAN AADCS8583L .... RESPONDENT SCHOTT GLASS INDIA PVT. LTD. ITA NO.8550/M/2004 ITA NO.8891/M/2004 ITA NO.1256/M/2008 ITA NO.2876/M/2009 2 ITA NO. 1256/MUM./2008 (ASSESSMENT YEAR : 2003-04 ) SCHOTT GLASS INDIA PVT. LTD. DYNASTY, A-WING, 303 & 304 SANGAM THEATRE, ANDHERI- KURLA ROAD, ANDHERI (E) MUMBAI 400 059 PAN AADCS8583L .. APPELLANT V/S DY. COMMISSIONER OF INCOME TAX RANGE-8(3), MUMBAI .... RESPONDENT ITA NO. 2876/MUM./2009 (ASSESSMENT YEAR : 2005-06 ) SCHOTT GLASS INDIA PVT. LTD. DYNASTY, A-WING, 303 & 304 SANGAM THEATRE, ANDHERI- KURLA ROAD, ANDHERI (E) MUMBAI 400 059 PAN AADCS8583L .. APPELLANT V/S INCOME TAX OFFICER WARD-8(3)(1), MUMBAI .... RESPONDENT ASSESSEE BY : MR. KANCHAN KAUSHAL A/W MR. DHANESH BAFNA AND MR. ALIASGAR RAMPURWALA REVENUE BY : DR. B. SENTHIL KUMAR DATE OF HEARING 08.12.2011 DATE OF ORDER 23.12.2011 SCHOTT GLASS INDIA PVT. LTD. ITA NO.8550/M/2004 ITA NO.8891/M/2004 ITA NO.1256/M/2008 ITA NO.2876/M/2009 3 O R D E R PER J. SUDHAKAR REDDY, A.M. CROSS APPEALS IN ITA NO.8550/MUM./2004 AND ITA NO. 8891/MUM./ 2004, ARE DIRECTED AGAINST THE IMPUGNED ORDER DATED 24 TH SEPTEMBER 2004, PASSED BY THE COMMISSIONER (APPEALS)-XXIX, MUMBAI, FOR ASSESSMENT YEAR 2001-02. THE ASSESSEE HAS ALSO FILED APPEAL FOR ASS ESSMENT YEAR 2003-04, WHICH IS DIRECTED AGAINST THE IMPUGNED ORDER DATED 7 TH DECEMBER 2007, AND FOR ASSESSMENT YEAR 2005-06, WHICH IS DIRECTED AGAI NST THE IMPUGNED ORDER DATED 13 TH FEBRUARY 2009, PASSED BY THE COMMISSIONER (APPEALS )-XXIX, MUMBAI, RESPECTIVELY. SINCE THE ISSUES IN THESE APP EALS ARE COMMON, FOR THE SAKE OF CONVENIENCE, THESE APPEALS WERE HEARD TOGET HER AND ARE BEING DISPOSED OFF BY WAY OF THIS CONSOLIDATED ORDER. 2. WE HAVE HEARD THE LEARNED COUNSEL, MR. KANCHAN KAUS HAL, ON BEHALF OF THE ASSESSEE, AND THE LEARNED DEPARTMENTAL REPRESEN TATIVE, DR. B. SENTHIL KUMAR, ON BEHALF OF THE REVENUE. 3. BRIEF FACTS OF THE CASE, AS BROUGHT BY THE ASSESSIN G OFFICER IN PARA-2 OF HIS ORDER FOR ASSESSMENT YEAR 2001-02, READ AS FOLL OWS:- THE ASSESSEE IS A 100% SUBSIDIARY OF THE SCHOTT GLA S WERKE BEITILUNGA GMBH, GERMANY, A GROUP COMPANY OF THE SCHOTT GROUP, A PART OF A FOUNDATION OF THE CAR ZEISS STIFLUNG. IT HAS TWO DI VISIONS NAMELY TUBING AND TRADE DIVISION. IN THE TUBING DIVISION ASSESSEE PRO DUCES CLEAR(NGC) AND AMBER (NGA) GLASS TUBES FOR PHARMA PACKAGING (AINPU LES AND VIAS). IT ALSO TRADES IN SUPERIOR QUALITY GLASS TUBES IMPORTED FRO M GROUP COMPANIES. THE COMPANY HAS STARTED ITS TRADING DIVISION IN THE BUS INESS OF MARKETING THE PRODUCTS FOR DIFFERENT WORLD WIDE SCHOTT BUSINESS U NITS. THEREFORE THE MAIN BUSINESS OF THE ASSESSEE IS MANUFACTURING AND SELLI NG OF OWN MANUFACTURED NEUTRAL GLASS TUBING AND IMPORT AND SALE OF SPECIAL ISED GLASS TUBING . WE FIRST TAKE UP ASSESSEES APPEAL IN ITA NO.8550/M UM./2004 . 4. THE DISPUTE IN GROUND NO.1, IS WHETHER OR NOT THE C OMMISSIONER (APPEALS) WAS JUSTIFIED IN DISALLOWING THE DEDUCTIO N OF ` 70,656, CLAIMED ON ACCOUNT OF MISAPPROPRIATION OF FUNDS BY THE EMPLOYE ES OF THE ASSESSEE. SCHOTT GLASS INDIA PVT. LTD. ITA NO.8550/M/2004 ITA NO.8891/M/2004 ITA NO.1256/M/2008 ITA NO.2876/M/2009 4 5. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE DID NOT WISH TO PRESS THIS GROUND DUE TO SMALLNESS OF THE AMOUNT. CONSEQU ENTLY, THIS GROUND IS DISMISSED AS NOT PRESSED . 6. GROUND NO.2, RELATES TO DISALLOWANCE OF DEDUCTION O F ` 27,03,322, CLAIMED ON ACCOUNT OF WRITE-OFF OF STOCKS WHICH WER E CONSIDERED AS SLOW/NON- MOVING FOR PAST MANY YEARS. 7. LEARNED COUNSEL FOR THE ASSESSEE DID NOT WISH TO PR ESS THIS GROUND SINCE THE BENEFIT IS CLAIMED IN THE SUBSEQUENT YEAR AND IT IS A QUESTION OF YEAR OF ALLOWABILITY. CONSEQUENTLY, THIS GROUND IS DISMISSED AS NOT PRESSED . 8. GROUND NO.3, IS ON THE ISSUE OF ADDITION OF ` 8,25,070, DISALLOWING ADJUSTMENT IN THE OPENING STOCK ON ACCOUNT OF MODVA T UNDER SECTION 145A OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT ). 9. BEFORE US, LEARNED COUNSEL FOR THE ASSESSEE REFERRE D TO TAX AUDIT REPORT FOR THE ASSESSMENT YEAR 2001-02, SCHEDULE-1, CLAUSE -12(B), WHICH GIVES ADJUSTMENTS TO THE PROFIT & LOSS ACCOUNT IN ACCORDA NCE WITH SECTION 145A, AND SUBMITTED THAT THERE IS NO IMPACT IN THE PROFIT & LOSS ACCOUNT. HE ARGUED THAT THE ASSESSING OFFICER HAS MADE AN ADDIT ION ON THE SOLE GROUND THAT THE VALUE OF CLOSING STOCK OF THE EARLIER YEAR WOULD GET AFFECTED DUE TO THE INCREASE IN THE VALUE OF OPENING STOCK IN THE C URRENT YEAR ON ACCOUNT OF ADJUSTMENT UNDER SECTION 145A. HE SUBMITS THAT SUCH REASON IS BAD-IN-LAW. LEARNED COUNSEL RELIED ON THE DECISION OF THE TRIBU NAL IN DCIT V/S B.D.H. INDUSTRIES LTD., ITA NO.6553/MUM./2008, ORDER DATED 23 RD FEBRUARY 2011. 10. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTH ER HAND, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. ON A QUERY FROM THE BENCH AS TO WHETHER THERE IS ANY IMPACT DURING THE CURRENT Y EAR, THE LEARNED DEPARTMENTAL REPRESENTATIVE ADMITTED THAT THERE IS NO IMPACT DURING THE CURRENT YEAR BUT STOOD WITH HIS GROUND THAT THERE I S AN IMPACT IN THE ASSESSMENT YEAR 2000-01, I.E., THE PREVIOUS ASSESSM ENT YEAR. SCHOTT GLASS INDIA PVT. LTD. ITA NO.8550/M/2004 ITA NO.8891/M/2004 ITA NO.1256/M/2008 ITA NO.2876/M/2009 5 11. AFTER HEARING BOTH THE PARTIES, AS THE ADMITTED POS ITION IS THAT THERE IS NO IMPACT CAUSED BY THE ADJUSTMENTS MADE AS PER SEC TION 145A, DURING THE CURRENT YEAR. SCHEDULE-I TO THE TAX AUDIT REPORT GI VES A CALCULATION / ADJUSTMENT AS PER CLAUSE (B). THIS CALCULATION / AD JUSTMENT HAS NOT BEEN DISPUTED BY THE REVENUE. CONSEQUENTLY, WE UPHOLD TH E CONTENTIONS OF THE ASSESSEE AND ALLOW THE GROUND RAISED BY THE ASSESSE E. 12. THE ISSUE ARISING OUT OF GROUND NO.4, RELATES TO DI SALLOWANCE OF PRELIMINARY EXPENDITURE CLAIMED UNDER SECTION 35D(1 )(II) OF THE ACT. 13. AFTER HEARING BOTH THE PARTIES, WE FIND THAT IDENTI CAL ISSUE HAS BEEN DECIDED BY THE TRIBUNAL IN ASSESSEES OWN CASE IN I TA NO.1698/MUM./2003, ORDER DATED 7 TH SEPTEMBER 2011, FOR ASSESSMENT YEAR 1998-99, WHERE IN THE TRIBUNAL HAS DISMISSED THE GROUND RAISED BY THE ASS ESSEE BY OBSERVING AS FOLLOWS:- 7. AFTER HEARING BOTH THE SIDES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE COMMISSIONER (APPEALS). PAYMENT OF PRO FESSIONAL FEES FOR FIPB AND RBI APPROVAL IS NOT COVERED UNDER SECTION 35D OF THE ACT. THEREFORE, THE DISALLOWANCE OF ` 206320 UNDER SECTION 35D BEING JUSTIFIED IS UPHELD. GROUND OF APPEAL NO.3 BY THE A SSESSEE IS THEREFORE DISMISSED. 14. KEEPING IN VIEW THE AFORESAID DECISION OF THE TRIBU NAL IN ASSESSEES OWN CASE, WE DISMISS THE GROUND RAISED BY THE ASSES SEE IN THIS YEAR ALSO. 15. GROUND NO.5, IS ON THE ISSUE OF DISALLOWANCE OF PRE LIMINARY EXPENDITURE CLAIMED UNDER SECTION 35D(1)(II) OF THE ACT. 16. LEARNED COUNSEL FOR THE ASSESSEE, BEFORE US, DID NO T WISH TO PRESS THIS GROUND DUE TO SMALLNESS OF THE AMOUNT. CONSEQUENTLY , THIS GROUND IS DISMISSED AS NOT PRESSED . 17. IN THE RESULT, ASSESSEES APPEAL IN ITA NO.8550/M./ 2004 IS ALLOWED IN PART. SCHOTT GLASS INDIA PVT. LTD. ITA NO.8550/M/2004 ITA NO.8891/M/2004 ITA NO.1256/M/2008 ITA NO.2876/M/2009 6 WE NOW TAKE UP REVENUES APPEAL IN ITA NO.8891/MUM. /2004 . 18. GROUND NO.1, RAISED BY THE REVENUE, READS AS FOLLOW S:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED CIT(A) ERRED IN ALLOWING ` 8,55,000 BEING PAID TO 16 WORKERS TO SETTLE THEIR CASES OUTSIDE THE LABOUR COURT ( ` 6,40,000) AND FEE PAID TO MEDIATOR ( ` 2,16,000) SHOWN AS VRS, WITHOUT APPRECIATING THE FACTS OF THE CASE. 19. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HA S DEBITED ` 21,79,988, TOWARDS PAYMENT UNDER VRS SCHEME BUT IN THE COMPUTATION OF INCOME, THE ASSESSEE ADDED BACK ONLY ` 13,24,988. THE ASSESSEE, IN REPLY TO A QUERY SOUGHT BY THE ASSESSING OFFICER TO EXPLAIN AS TO WHY THE BALANCE AMOUNT OF ` 8,55,000, SHOULD NOT BE ADDED TO THE TOTAL INCOME, HAS NOT GIVEN ANY JUSTIFICATION FOR THE SAME AND ONLY THE B REAK-UP OF ` 8,55,000 WAS GIVEN. THE ASSESSEE HAS PAID ` 40,000 EACH TO 16 WORKERS AMOUNTING TO ` 6,40,000 AND MEDIATOR FEE OF ` 2,5,000 WAS PAID. THE ASSESSING OFFICER, IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCED PRODUCED B Y THE ASSESSEE, ADD ` 8,55,000 TO THE TOTAL INCOME OF THE ASSESSEE. 20. ON APPEAL, THE COMMISSIONER (APPEALS) DELETED THE D ISALLOWANCE MADE BY THE ASSESSING OFFICER BY OBSERVING AS FOLLOWS:- I HAVE CONSIDERED THE SUBMISSION MADE BY THE APPELL ANT. IT IS SEEN THAT THE APPELLANT COMPANY DEBITED A TOTAL SUM OF 2 1,79,988/- TOWARDS PAYMENT UNDER VRS SCHEME. OUT OF THE SAID A MOUNT, APPELLANT COMPANY ADDED BACK AN AMOUNT OF RS. 13,24 ,988/- TO THE INCOME IN THE COMPUTATION OF TOTAL INCOME AND REMAI NING AMOUNT OF RS.8,55,000/- WAS NOT ADDED BACK ON THE GROUND THAT SAME IS AN ALLOWABLE DEDUCTION AS IT PERTAINED TO PAYMENTS REL ATING TO VOLUNTARY RETIREMENT. IT WAS EXPLAINED TO ME THAT AFORESAID A MOUNT OF RS.8,55,000/- COMPRISED OF ` .6,40,000/- PAID TO 16 WORKERS TOWARDS SETTLEMENT OF CASES OUTSIDE THE LABOUR COURT AND RS .2,15,000/- PAID AS MEDIATOR FEES. IN THIS REGARD, AR HAS DRAWN MY ATTE NTION TO THE ORDER OF HONBLE GUJARAT HIGH COURT IN THE CASE OF SCHOOT GLASS INDIA PVT. LTD. VS. ASSTT. COMMISSIONER OF LABOUR & CONCILIATI ON OFFICER [SPI. CIVIL APPLICATION NOS.9002, 9410, 9414 AND 9412 OF 1999 D ECIDED ON 08.05.2000J IN WHICH HONBLE HIGH COURT OF GUJARAT HAS HELD THAT SCHOTT GLASS INDIA PVT. LTD. ITA NO.8550/M/2004 ITA NO.8891/M/2004 ITA NO.1256/M/2008 ITA NO.2876/M/2009 7 ASSTT. COMMISSIONER OF LABOUR HAS JURISDICTION TO M AKE THE APPELLANT COMPANY AS A PARTY TO THE LABOUR DISPUTE WHICH WAS ORIGINALLY FILED BY THE LABOURERS AGAINST THE BHARAT GLASS TUBE LTD. WH ICH IS TAKEN OVER BY THE APPELLANT COMPANY. AR HAS EXPLAINED THAT APP ELLANT COMPANY HAD TAKEN OVER THE FACTORY OF BHARAT GLASS TUBE LTD . AND SUBSEQUENTLY THE WORKMEN PRAYED TO THE LABOUR COURT THAT THE APP ELLANT COMPANY BE MADE A PARTY IN THE DISPUTE U/S. 10 OF THE INDUS TRIAL DISPUTES ACT, 1947. APPELLANT HAS EXPLAINED THE COMPLETE BACKGROU ND AND FACTS OF THE CASE IN ITS AFORESAID SUBMISSIONS. CONSIDERING THE SUBMISSION MADE, IT IS CLEAR THAT A SUM OF RS.8,55,000/- DOES NOT CONSTITUTE A PART OF VRS SCHEME AND, THEREFORE, IS AN ALLOWABLE DEDUC TION, ACCORDINGLY, ADDITION IS DELETED. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 21. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE REL IED ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS FOR THE PROPOSITION THAT TH E EXPENDITURE ON SETTLEMENT HELD ALLOWABLE SINCE IT WAS MADE FOR TER MINATING DISADVANTAGEOUS RELATIONSHIP BETWEEN THE PARTIES AND WAS TO REMOVE DIFFICULTIES / COMMERCIAL INCONVENIENCE IN CARRYING ON THE BUSINESS OF THE AS SESSEE SMOOTHLY. I) SUPER SPINNING MILLS LTD. V/S ITO, 19 TTJ 588 (MAD. ); II) WESTERN INDIA OIL DISTRIBUTION CO. V/S CIT, 77 ITR 140 (BOM.); III) CIT V/S HEALTH & CO. P. LTD., 114 ITR 605 (CAL.); A ND IV) GUJARAT SPINNING MILLS V/S ITO, 18 TTJ 122 (AHD.). 22. THE LEARNED COUNSEL ALSO RELIED ON THE FOLLOWING CA SE LAWS FOR THE PROPOSITION THAT WHEN THE PAYMENT REFLECTS GENUINE AND BONA FIDE SETTLEMENT AND SAME IS DICTATED BY CONSIDERATION OF COMMERCIAL EXPEDIENCY AND BENEFIT OF THE COMPANY, THE SAME IS ALLOWABLE AS BUSINESS E XPENDITURE. I) CIT V/S SINNAR BIDI UDYOG LTD., 257 ITR 216 (BOM.) II) CANNANORE SPINNING & WEAVING MILLS V/S CIT, 42 ITR 528 (KER.) III) SURAJ KNITTING V/S ACIT, 1 SOT 76 (AHD.) 23. RESPECTFULLY FOLLOWING THE AFORESAID CASE LAWS, THE ORDER PASSED BY THE COMMISSIONER (APPEALS) IS HEREBY UPHELD. THUS, THE GROUND RAISED BY THE REVENUE IS DISMISSED. 24. IN THE RESULT, REVENUES APPEAL IN ITA NO.8891/M./2 004, IS DISMISSED. SCHOTT GLASS INDIA PVT. LTD. ITA NO.8550/M/2004 ITA NO.8891/M/2004 ITA NO.1256/M/2008 ITA NO.2876/M/2009 8 WE NOW TAKE UP ASSESSEES APPEAL IN ITA NO.1256/MUM ./2008 . 25. GROUND NO.1, IS ON THE ISSUE OF ADDITION TO CLOSING STOCK UNDER SECTION 145A, ON MODVAT. 26. THE ASSESSEE RELIES ON THE ARGUMENTS ADVANCED ON TH E SAME ISSUE FOR THE ASSESSMENT YEAR 2001-02. 27. AFTER HEARING THE RIVAL CONTENTIONS, WE AGREE WITH THE SUBMISSIONS OF THE LEARNED DEPARTMENTAL REPRESENTATIVE THAT THE IS SUE SHOULD BE RESTORED TO THE FILE OF ASSESSING OFFICER WITH A DIRECTION T O VERIFY THE CALCULATION IN SCHEDULE-I TO THE TAX AUDIT REPORT DATED 7 TH OCTOBER 2003 FOR ASSESSMENT YEAR 2003-04, GIVEN AS PER CLAUSE 12(B) OF SECTION 44AB OF THE ACT. ACCORDINGLY, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE COMMISSIONER (APPEALS) AND RESTORE THE ISSUE BACK TO THE FILE OF ASSESSING OFFICER AND DIRECT HIM TO FOLLOW THE JUDGMENT OF HON'BLE JURISD ICTIONAL HIGH COURT IN CIT V/S MAHALAXMI GLASS WORKS P. LTD., [2009] 318 ITR 0 116 (BOM.), AND THE DECISIONS OF THE TRIBUNAL IN HAWKINS COOKER LTD V/S ITO, 14 DTR 206 (MUM.) WHILE DECIDING THE ISSUE. THUS, THIS GROUND IS ALLO WED FOR STATISTICAL PURPOSES. 28. GROUND NO.2, IS ON THE ISSUE OF DISALLOWANCE OF EXP ENDITURE CLAIMED UNDER SECTION 35D OF THE ACT TO THE EXTENT OF ` 2,06,320. 29. AFTER HEARING BOTH THE PARTIES, WE FIND THAT IDENTI CAL ISSUE HAS BEEN DECIDED BY US IN ASSESSEES OWN CASE IN ITA NO.8550 /MUM./2004, VIDE PARAS-12 AND 13 ABOVE. CONSISTENT WITH THE VIEW TAK EN THEREIN, WE DISMISS THE GROUND RAISED BY THE ASSESSEE IN THIS YEAR ALSO . 30. GROUND NO.3, IS ON THE ISSUE OF DISALLOWANCE OF PRE LIMINARY EXPENDITURE CLAIMED UNDER SECTION 35D(1)(II) OF THE ACT AMOUNTI NG TO ` 30,600. SCHOTT GLASS INDIA PVT. LTD. ITA NO.8550/M/2004 ITA NO.8891/M/2004 ITA NO.1256/M/2008 ITA NO.2876/M/2009 9 31. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE DID NOT WISH TO PRESS THIS GROUND DUE TO SMALLNESS OF THE AMOUNT. CONSEQU ENTLY, THIS GROUND IS DISMISSED AS NOT PRESSED . 32. GROUND NO.4, IS ON THE ISSUE OF DISALLOWANCE OF EXP ENDITURE INCURRED ON REPAIRS OF FURNACE-I AMOUNTING TO ` 3,80,66,389, BY TREATING IT AS CAPITAL IN NATURE. 33. LEARNED COUNSEL FOR THE ASSESSEE DID NOT WISH TO PR ESS THIS GROUND DUE TO SMALLNESS OF THE AMOUNT. CONSEQUENTLY, THIS GROU ND IS DISMISSED AS NOT PRESSED . 34. IN THE RESULT, ASSESSEES APPEAL IN ITA NO.1256/MUM ./2008, IS PARTLY ALLOWED. WE NOT TAKE UP ASSESSEES APPEAL IN ITA NO.2876/MUM ./2009 . 35. GROUND NO.1, IS ON THE ISSUE OF DISALLOWANCE OF EXP ENDITURE INCURRED ON REPAIRS OF FURNACE AMOUNTING TO ` 3,80,93,684, BY TREATING IT AS CAPITAL IN NATURE. 36. LEARNED COUNSEL FOR THE ASSESSEE DID NOT WISH TO PR ESS THIS GROUND DUE TO TIMING DIFFERENCE I.E., YEAR OF ALLOWABILITY. HE SUBMITTED THAT THE ASSESSEE HAS ALREADY GOT 80% DEPRECIATION AND, HENCE, IT WAS OF THE OPINION THAT NO USEFUL PURPOSE WOULD BE SERVED BY PURSUING THE ISSU E. CONSEQUENTLY, WE DISMISS THIS GROUND AS NOT PRESSED . 37. GROUND NO.2, IS ON THE ISSUE OF DISALLOWANCE OF EXP ENDITURE CLAIMED UNDER SECTION 35D OF THE ACT TO THE EXTENT OF ` 2,06,632. 38. AFTER HEARING BOTH THE PARTIES, WE FIND THAT IDENTI CAL ISSUE HAS BEEN DECIDED BY US IN ASSESSEES OWN CASE IN ITA NO.8550 /MUM./2004, VIDE PARAS-12 AND 13 ABOVE. CONSISTENT WITH THE VIEW TAK EN THEREIN, WE DISMISS THE GROUND RAISED BY THE ASSESSEE IN THIS YEAR ALSO . SCHOTT GLASS INDIA PVT. LTD. ITA NO.8550/M/2004 ITA NO.8891/M/2004 ITA NO.1256/M/2008 ITA NO.2876/M/2009 10 39. GROUND NO.3, IS ON THE ISSUE OF DISALLOWANCE OF PRE LIMINARY EXPENDITURE CLAIMED UNDER SECTION 35D(1)(II) OF THE ACT AMOUNTI NG TO ` 30,600. 40. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE DID NOT WISH TO PRESS THIS GROUND DUE TO SMALLNESS OF THE AMOUNT. CONSEQU ENTLY, THIS GROUND IS DISMISSED AS NOT PRESSED . 41. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. 42. TO SUM UP, ASSESSEES APPEAL IN ITA NO.8550/MUM./20 04, IS ALLOWED IN PART AND REVENUES APPEAL IN ITA NO.8891/M./2004, A RE DISMISSED. ASSESSEES APPEALS IN ITA NO.2876/MUM./2009 IS PART LY ALLOWED AND IN ITA NO.2876/MUM./ 2009, IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD DECEMBER 2011 SD/- V. DURGA RAO JUDICIAL MEMBER SD/- J. SUDHAKAR REDDY ACCOUNTANT MEMBER MUMBAI, DATED: 23 RD DECEMBER 2011 COPY TO : (1) THE ASSESSEE; (2) THE RESPONDENT; (3) THE CIT(A), MUMBAI, CONCERNED; (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, D BENCH, ITAT, MUMBAI. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY ASSISTANT REGISTRAR SR. PRIVATE SECRETARY ITAT, MUMBAI BENCHES, MUMBAI