A B T Limited, CHENNAI V. DCIT, Coimbatore

ITA 3269/CHNY/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5590 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 05-07-2017
• Assessment Year: 2013-2014
• Appeal Filed On: 02-12-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S SRIDHAR; N ARJUN RAJ
• Keywords: Revenue expenditure; Capital expenditure
• Section: 115JB; 143(1)

Judgement Text

, , IN THE INCOME-TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . , . , BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ I.T.A.NO.3269/CHNY/2016 / ASSESSMENT YEAR: 2013-14 M/S. A B T LIMITED, 180, RACE COURSE ROAD, COIMBATORE 641 018. [PAN: AABCA8398K] VS. THE DEPUTY COMMISSIONER INCOME TAX, CORPORATE CIRCLE I, COIMBATORE. ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRIN. ARJUN RAJ, C.A. FOR SHRI S. SRIDHAR, ADVOCATE / RESPONDENT BY : SHRI CLEMENT RAMESH KUMAR, ADDL.CIT / DATE OF HEARING : 23.01.2019 /DATE OF PRONOUNCEMENT : 31.01.2019 / O R D E R PER DUVVURU RL REDDY, JUDICIAL MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 1, COIMBATORE, DATED 10.10.2016 RELEVANT TO THE ASSESSMENT YEAR 2013-14. THE ONLY EFFECTIVE GROUND RAISED IN THE APPEAL OF THE ASSESSEE IS THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF EXPENSES INCURRED ON THE LEASEHOLD PREMISES/LAND TO THE EXTENT OF .2,35,79,374/-. I.T.A. NO. 3269/CHNY/16 2 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2013-14 ON 30.09.2013 DECLARING TOTAL INCOME OF . 13,68,88,710/- UNDER NORMAL PROVISIONS AND BOOK PROFIT OF .5,76,55,857/- UNDER 115JB OF THE INCOME TAX ACT, 1961 [ACT IN SHORT]. THE RETURN FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE ACT. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS. AGAINST, STATUTORY NOTICES, THE ASSESSEE FURNISHED DETAILS. FROM THE DETAILS FURNISHED BY THE ASSESSEE, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS CLAIMED EXPENDITURE INCURRED ON LEASE HOLD LAND . 2,98,88,856/- AS REVENUE EXPENDITURE UNDER THE HEAD CONSTRUCTIONS OF BUILDING ON LEASE HOLD LAND. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND BY FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2005-06 & 2008-09 [2013]30 TAXMANN.COM 11 (CHENNAI TRIB.], WHEREIN, IT WAS HELD THAT THE RENOVATION/REPAIR/ADDITION MADE BY THE ASSESSEE ON LEASE HOLD PREMISES WOULD AMOUNT TO CAPITAL EXPENDITURE WITHIN THE MEANING OF EXPLANATION 1 TO SECTION 32(1) OF THE ACT, THE ASSESSING OFFICER DISALLOWED THE EXPENDITURE INCURRED BY THE ASSESSEE BEING CAPITAL IN NATURE IN CONSTRUCTING NEW PERMANENT BUILDINGS FOR CONDUCTING THE BUSINESS IN THE LEASE HOLD LAND, WHICH GIVES ENDURING BENEFIT TO THE ASSESSEE AND BROUGHT TO TAX. 3. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE THE LD. CIT(A) ALLOWED A SUM OF I.T.A. NO. 3269/CHNY/16 3 .63,09,482/- BEING GENERAL REPAIRS & MAINTENANCE AND RUNNING EXPENSES AND BY FOLLOWING THE TRIBUNAL ORDER IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2010-11 AND 2011-12 IN I.T.A. NOS. 2077/MDS/2014 & 1218/MDS/2015, THE BALANCE AMOUNT OF DISALLOWANCE OF .2,35,79,374/- BEING CAPITAL IN NATURE WAS CONFIRMED. 4. ON BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. BY FILING COPY OF THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2012-13 IN I.T.A. NO.2103/MDS/2016, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THE ISSUE MAY BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER TO VERIFY AND ALLOW THE EXPENDITURE INCURRED TO UPKEEP THE ALREADY EXISTING ASSETS SUCH AS PAINTING, RE-LAYING OF NEW TILES, PARTITIONS, ETC. BEING REVENUE IN NATURE. 5. PER CONTRA, THE LD. DR HAS SUBMITTED THAT AGAINST THE TOTAL DISALLOWANCE OF .2,98,88,856/- MADE BY THE ASSESSING OFFICER, AFTER VERIFYING THE DETAILS AND SUBMISSIONS FURNISHED BY THE ASSESSEE, THE LD. CIT(A) HAS ALLOWED THE EXPENDITURE INCURRED TOWARDS GENERAL REPAIRS & MAINTENANCE AND RUNNING EXPENSES AND ONLY BALANCE AMOUNT, WHICH WAS CAPITAL IN NATURE WAS CONFIRMED AND SUPPORTED THE ORDER PASSED BY THE LD. CIT(A). I.T.A. NO. 3269/CHNY/16 4 6. WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IN THIS CASE, THE ASSESSEE HAS CLAIMED EXPENDITURE INCURRED ON LEASE HOLD LAND AT . 2,98,88,856/- AS REVENUE EXPENDITURE. HOWEVER, THE ASSESSING OFFICER DISALLOWED THE ENTIRE EXPENDITURE INCURRED BY THE ASSESSEE BY HOLDING THAT THE EXPENSES ARE CAPITAL IN NATURE IN CONSTRUCTING NEW PERMANENT BUILDINGS FOR CONDUCTING THE BUSINESS IN THE LEASE HOLD LAND, WHICH GIVES ENDURING BENEFIT TO THE ASSESSEE. ON APPEAL, AFTER VERIFYING THE DETAILS AND SUBMISSIONS FURNISHED BY THE ASSESSEE, THE LD. CIT(A) ALLOWED THE EXPENDITURE INCURRED TOWARDS GENERAL REPAIRS & MAINTENANCE AND RUNNING EXPENSES AT .63,09,482/- BEING REVENUE IN NATURE AND ONLY THE BALANCE AMOUNT OF .2,35,79,374/- [.2,98,88,856 .63,09,482/-], WHICH WAS CAPITAL IN NATURE WAS CONFIRMED. WE HAVE CONSIDERED THE PLEA OF THE LD. COUNSEL FOR THE ASSESSEE TO REMIT BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION AND TO ALLOW THE EXPENDITURE INCURRED BY THE ASSESSEE, WHICH ARE OF REVENUE IN NATURE. IN THIS ASSESSMENT YEAR, AFTER VERIFICATION OF THE DETAILS FURNISHED BY THE ASSESSEE, THE LD. CIT(A) ALLOWED THE EXPENDITURE BEING REVENUE IN NATURE INCURRED TOWARDS GENERAL REPAIRS & MAINTENANCE AND RUNNING EXPENSES AND ONLY CAPITALIZED THE BALANCE AMOUNT OF .2,35,79,374/-, WHICH ARE OF CAPITAL IN NATURE. THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT THE PLEA RAISED BY THE LD. COUNSEL DOES NOT HOLD I.T.A. NO. 3269/CHNY/16 5 WATER. UNDER THE ABOVE FACTS AND CIRCUMSTANCES, THE BALANCE DISALLOWANCE OF EXPENDITURE OF .2,35,79,374/-, CONFIRMED BY THE LD. CIT(A), WHICH ARE OF CAPITAL IN NATURE, STANDS SUSTAINED. THUS, THE GROUND RAISED BY THE ASSESSEE IS DISMISSED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON THE 31 ST JANUARY, 2019 IN CHENNAI. SD/- SD/- (A.MOHAN ALANKAMONY) ACCOUNTANT MEMBER (DUVVURU RL REDDY) JUDICIAL MEMBER CHENNAI, DATED, 31.01.2019 VM/- /COPY TO: 1. / APPELLANT, 2. / RESPONDENT, 3. ( ) /CIT(A), 4. /CIT, 5. /DR & 6. /GF.