Astron Paper & Board Mill Limited, Ahmedabad V. The Dy. CIT, Circle-1(1)(2), Ahmedabad

ITA 2904/AHD/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3407 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 05-03-2020
• Assessment Year: 2014-2015
• Appeal Filed On: 22-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SANDEEP BODLA
• Section: 13

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./I.T.A. NO. 2904/AHD/2017 ( / ASSESSMENT YEAR : 2014-15) ASTRON PAPER & BOARD MILL LTD. D-702, 7 TH FLOOR OPP.GUJARAT HIGH COURT SG HIGHWAY AHMEDABAD-380 054 / VS. THE DCIT CIRCLE-1(1)(2) AHMEDABAD ./ ./PAN/GIR NO. : AAJCA 0517 E ( /APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI SANDEEP BODLA, AR / RESPONDENT BY : SHRI VIDHYUT TRIVEDI, SR.DR /DATE OF HEARING 05/03/2020 / DATE OF PRONOUNCEMENT 05 / 0 3 /20 20 / O R D E R PER SHRI SANDEEP GOSAIN, JUDICIAL MEMBER : THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TA X (APPEALS)1, AHMEDABAD [CIT(A) IN SHORT] VIDE APPEAL NO.CIT(A)-1 /DCIT CIRCLE- 1(1)(2)/279/2016-17 DATED 28/09/2017 ARISING IN TH E ASSESSMENT ORDER PASSED UNDER S.143(3) OF THE INCOME TAX ACT, 1961( HEREINAFTER REFERRED TO AS 'THE ACT') DATED 29/11/2016 RELEVANT TO ASSESSM ENT YEAR (AY) 2014-15. 2. THE ASSESSEE HAS RAISED THE FOLLOWING SOLITARY G ROUND OF APPEAL:- ITA NO.2904/AHD/2017 ASTRON PAPER & BOARD MILL LTD. VS. DCIT ASST.YEAR 2014-15 - 2 - 1) THE HONBLE CIT(A)-1 WITHOUT CONSIDERING THE PROVI SIONS OF SECTION 35D, NATURE OF EXPENDITURE INCURRED, FACTS OF THE C ASE AND JUDICIAL PRONOUNCEMENT IN THIS REGARD WRONGLY CONFIRMED THE DISALLOWANCE OF RS.4,36,400/- BEING 1/5 TH OF EXPENSES INCURRED ON INCREASE OF AUTHORIZED SHARE CAPITAL OF THE COMPANY AND HENCE T HE SAME ADDITION TO TOTAL INCOME BE DELETED NOW. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED ITS RETURN OF INCOME ON 30/09/2014 DECLARING LOSS OF RS.(-) 6,36, 83,518/-. THE ASSESSMENT ORDER U/S.143(3) OF THE ACT DATED 29/11/ 2016 WAS PASSED IN THE CASE OF THE ASSESSEE THEREBY DISALLOWING EXPENSES I NCURRED BY THE ASSESSEE ARE NOT FOUND ALLOWABLE U/S.35D OF THE ACT. 4. AGGRIEVED BY THE ORDER OF THE AO, ASSESSEE PREF ERRED APPEAL BEFORE LD.CIT(A), WHO AFTER CONSIDERING THE CASE OF BOTH T HE PARTIES, DISMISSED THE APPEAL FILED BY THE ASSESSEE. 5. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), N OW THE ASSESSEE IS FURTHER IN APPEAL BEFORE US. 6. THE SOLITARY GROUND RAISED BY THE ASSESSEE RELAT ES TO CHALLENGING THE ORDER OF THE LD.CIT(A) WHILE UPHOLDING THE DISALLOW ANCE OF RS.4,36,400/- U/S.35D OF THE ACT MADE BY THE ASSESSING OFFICER. 7. AT THE OUTSET, IT WAS SUBMITTED BY THE LD.AR THA T THE PRESENT GROUND IS SQUARELY COVERED BY THE DECISION OF ITAT AHMEDABAD D BENCH IN ASSESSEES OWN CASE IN ITA NO.523/AHD/2017 FOR AY 2013-14, ORD ER DATED 31/05/2018. ITA NO.2904/AHD/2017 ASTRON PAPER & BOARD MILL LTD. VS. DCIT ASST.YEAR 2014-15 - 3 - THE OPERATIVE PORTION OF THE ORDER OF THE ITAT CONT AINED IN PARAGRAPH NOS.12 AND 13 IS REPRODUCED AS UNDER: 12.WE HAVE GONE THROUGH THE RELEVANT RECORD IN THE IMPUGNED ORDER. THE APPELLANT HAD BEEN ENGAGED IN THE BUSINESS OF MANUF ACTURING OF KRAFT PAPER. AND APPELLANT BEFORE THE COMMENCEMENT OF BUS INESS HAD INCURRED EXPENSES OF RS. 39,500/- IN CONNECTION WITH REGISTR ATION OF COMPANY, MO A & AOA DRAFTING & PRINTING ETC. AND RS. 19,42,500/ - IN CONNECTION REGISTRATION AND STAMP DUTY CHARGES FOR INCREASE IN THE AUTHORISED CAPITAL OF THE COMPANY FOR THE COMMENCEMENT OF THE PROJECT OF THE COMPANY. AND APPELLANT HAD CLAIMED RS. 3,96,400/- BEING 1/5 OF T HE ABOVE EXPENSES UNDER SECTION 35D OF THE INCOME TAX ACT. . 1. EXPENSES DEDUCTIBLE U/S. 35D ARE ANY EXPENDITURE IN CURRED IN CONNECTION WITH 1. PREPARATION OF A FEASIBILITY REPORT. 2. PREPARATION OF A PROJECT REPORT. 3. CONDUCTING A MARKET SURVEY OR ANY OTHER SURVEY NECESSARY FOR THE BUSINESS OF THE ASSESSEE. 4. ENGINEERING SERVICES RELATING TO THE BUSINESS OF THE ASSESSEE. 2. LEGAL CHARGES FOR DRAFTING ANY AGREEMENT BETWEEN TH E ASSESSEE AND ANY OTHER PERSON RELATING TO THE OR CONDUCT OF THE BUSI NESS OF THE ASSESSEE. 3. WHERE THE ASSESSEE IS A COMPANY, ALSO, EXPENDITURE: 1. BY WAY OF LEGAL CHARGES FOR DRAFTING THE MOA / A OA OR PRINTING OF MOA/AOA. 2. INCORPORATION FEE. 3. FOR ISSUE, FOR PUBLIC SUBSCRIPTION, OF SHARES IN OR DEBENTURES OF THE COMPANY, BEING UNDERWRITING COMMISSION, BROKERAGE A ND CHARGES FOR DRAFTING, TYPING, PRINTING AND ADVERTISEMENT OF THE PROSPE 4. OTHER EXPENSES AS NOTIFIED BY THE GOVERNMENT F ROM TIME TO TIME. 13. AS WE CAN SEE, ABOVE SAID EXPENDITURE ARE INCON SONANCE OF SECTION 35D AND ARE ALLOWABLE AS PER INCOME TAX ACT. THEREFORE, WE DIRECT THE A.O. TO DELETE THE ADDITION OF RS. 3,88,500/-. 8. WE HAVE HEARD THE LEARNED REPRESENTATIVES FOR BO TH THE PARTIES. WE HAVE ALSO PERUSED THE MATERIAL PLACED ON RECORD, OR DER OF ITAT CITED BY THE LD.AR AS WELL AS THE ORDERS PASSED BY THE REVENUE A UTHORITIES. ITA NO.2904/AHD/2017 ASTRON PAPER & BOARD MILL LTD. VS. DCIT ASST.YEAR 2014-15 - 4 - 9. SINCE IDENTICAL ISSUE IS INVOLVED IN ASSESSE ES CASE THIS YEAR ALSO, THEREFORE, TAKING A CONSISTENT VIEW AND RESPECTFULL Y FOLLOWING THE ORDER OF THE COORDINATE BENCH, AND WITH SIMILAR DIRECTIONS, THE SOLITARY GROUND RAISED BY THE ASSESSEE IS ALLOWED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE COURT ON 05 - 03 - 2020 AT AHMEDABAD SD/- SD/- ( AMARJIT SINGH) ( SANDEEP GOSAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 05/ 03 /2020 # . . , . $ . ./ T.C. NAIR, SR. PS ! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. %&' ( / CONCERNED CIT 4. ( ( ) / THE CIT(A)-1, AHMEDABAD 5. )* + $$&' , &' , % / DR, ITAT, AHMEDABAD 6. + ./ / GUARD FILE. / BY ORDER, ) $ //TRUE COPY// / (DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD