Metro Appliances Ltd., V. ACIT,Circle-6(1),

ITA 3228/DEL/2004

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3743 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 15-06-2010
• Assessment Year: 2001-2002
• Appeal Filed On: 15-07-2004
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N K CHAND
• Keywords: Depreciation
• Section: 143(3); 80IB; 80IA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `E: NEW DELHI BEFORE SHRI C.L.SETHI, JM & SHRI B.C. MEENA, AM I.T. A. NO.3228/DEL OF 2004 ASSESSMENT YEAR 2001-02 M/S METRO APPLIANCES LTD. VS ACIT, CIRCLE 6(1), (NOW METRO ORTEM LTD.), NEW DELHI. 134/4 & 134/5, ZAMRUDPUR, KAILASH COLONY, NEW DELHI. PAN: AACM3393H APPELLANT RESPONDENT APPELLANT BY: NONE RESPONDENT BY: SHRI N.K. CHAND, SR. DR ORDER PER C.L. SETHI, JM: THE ASSESSEE IS IN APPEAL AGAINST THE ORDER DATED 1 4.6.2004 PASSED BY THE LEARNED CIT(A) IN THE MATTER OF AN ASSESSMENT U /S 143(3) OF THE INCOME- TAX ACT, 1961 (THE ACT) FOR THE ASSESSMENT YEAR 200 1-02. 2. GROUND NO.1, RAISED BY THE ASSESSEE, IS AGAINST CIT(A)S ORDER IN CONFIRMING THE AOS ACTION IN NOT ALLOWING DEDUCTIO N U/S 80IB IN RESPECT OF THE PROFIT FROM SALE OF DEPB LICENCE. THE ASSESSEE S CLAIM OF DEDUCTION U/S 80IB IN RESPECT OF SALE OF IMPORT LICENCE UNDER DEP B SCHEME WAS DISALLOWED BY THE AO IN THE LIGHT OF THE DECISION O F THE HONBLE SUPREME 2 COURT IN THE CASE OF CIT VS STERLING FOODS LTD., 23 7 ITR 579. THE AO, THEREFORE, DISALLOWED THE DEDUCTION U/S 80IB TO THE EXTENT OF 30% OF RS.4,95,536/-, BEING THE SALE OF DEPB LICENCE. ON AN APPEAL, THE CIT(A) CONFIRMED THE AOS ACTION. 3. AFTER HEARING THE LEARNED DR, WE FIND THAT THIS ISSUE IS NO MORE RES INTEGRA AS IT HAS HOW BEEN SETTLED BY THE HONBLE S UPREME COURT IN THE CASE OF LIBERTY INDIA VS CIT (2009) 317 ITR 218 (SC), WH ERE IT HAS BEEN HELD THAT DEPB/DUTY DRAWBACK BENEFITS DO NOT FORM PART O F NET PROFIT ELIGIBLE FOR DEDUCTION U/S 80I, 80IA OR 80IB. THEREFORE, THIS G ROUND RAISED BY THE ASSESSEE IS REJECTED. 4. THE NEXT GROUND RAISED BY THE ASSESSEE IS AGAINS T DISALLOWANCE OF SOFTWARE EXPENSES AMOUNTING TO RS.2 LACS BY TREATIN G THE SAME TO BE OF CAPITAL IN NATURE. 5. THE AO TREATED THE SOFTWARE EXPENSES AMOUNTING T O RS.2 LACS TO BE CAPITAL IN NATURE, AND DISALLOWED THE SAME AS REVEN UE DEDUCTION. HOWEVER, THE AO HAS ALLOWED DEPRECIATION OF RS.1,20,000/-, B EING 60% OF RS.2 LACS, AND, THUS, THE NET DISALLOWANCE MADE BY THE AO WAS ONLY OF RS.80,000/-. THE AOS ACTION HAS BEEN CONFIRMED BY THE LEARNED C IT(A). 3 6. WE HAVE HEARD THE LEARNED DR, PERUSED THE MATERI AL ON RECORD. NONE FOR THE ASSESSEE IS PRESENT BEFORE US. 7. IN THE ABSENCE OF DETAILS OF SOFTWARE EXPENSES B EING PRODUCED BY THE ASSESSEE, WE ARE OF THE VIEW THAT THE CIT(A) HAS RI GHTLY CONFIRMED THE AOS ACTION IN DISALLOWING THE SUM OF RS.2 LACS AS REVEN UE EXPENDITURE AND IN ALLOWING DEPRECIATION OF RS.1,20,000/- OUT OF RS.2 LACS TOWARDS SOFTWARE EXPENSES, BEING CAPITAL IN NATURE. THE DEPRECIATIO N IN SUBSEQUENT YEARS ON WDV HAVE BEEN INVARIABLY ALLOWED BY THE AO, AS PER STAND TAKEN BY THE AO IN THIS ASSESSMENT YEAR. THE ASSESSEE IS NOT BEFOR E US TO EXPLAIN THE SITUATION. WE, THEREFORE, REJECT THIS GROUND. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. 9. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT O N 15 TH JUNE, 2010 IMMEDIATELY AFTER THE HEARING WAS OVER. (B.C. MEENA) (C.L. SETHI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: JUNE, 2010 VIJAY 4 COPY TO: 1. APPELLANT. 2. RESPONDENT. 3. CIT 4. CIT(A)-IX, NEW DELHI 5. DR ASSISTANT REGISTRAR