M/s Naraingarh Sugar Mills Ltd., Chandigarh V. DCIT, New Delhi

ITA 3326/DEL/2010

• Counselvise Citation: 332620114 RSA 2010
• Duration Of Justice: 4 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 27-11-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 07-07-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NEEHAR RANJAN
• Keywords: Depreciation; Revised return; Revenue expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F, NEW DELHI) BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO. 3326/DEL/2010 ASSESSMENT YEAR : 2007-08 M/S. NARAINGARH SUGAR MILLS LTD., VS. DCIT, CIRCLE 13(1), C/O HARY RIKHY (ADVOCATES) NEW DELHI R/O H.NO.1573, SECTOR 18D, CHANDIGARH. GIR / PAN:AAACN0454G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI HARRY RIKHY, ADV. RESPONDENT BY : SHRI NEEHAR RANJAN PANDEY, SR. DR ORDER PER T.S. KAPOOR, AM: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF LD. CIT(A) DATED 04.06.2010. THE APPEAL WAS EARLIER HEARD ON 27.11.2013 WHEREIN THE PRONOUNCEMENT WAS MADE AFTER THE CONCLUSION OF HEAR ING AND APPEAL WAS ALLOWED FOR STATISTICAL PURPOSES. HOWEVER WHILE DI CTATING THE ORDER, CERTAIN INCONSISTENCIES WERE OBSERVED, THEREFORE, THE CASE WAS REFIXED FOR CLARIFICATIONS ON 13.12.2013 AND IT WAS FINALLY HEA RD ON 11.07.2014. 2. THE FACTS EMANATING FROM THE MATERIAL PLACED ON RECORD ARE THAT THE ASSESSEE CLAIMED CERTAIN EXPENDITURE IN THE YEAR UN DER CONSIDERATION WHICH WAS PART OF DEFERRED REVENUE EXPENDITURE ORIGINALLY INCURRED IN ASSESSMENT YEAR 2003-04. THE ASSESSING OFFICER HAS REJECTED T HE CLAIM OF THE ASSESSEE ITA NO.3326/DEL/2010 2 WHICH WAS CONFIRMED BY LD. CIT(A). LD. CIT(A) IN H IS ORDER, OBSERVED AS UNDER: IN GROUND NO.2, THE APPELLANT CONTESTED THE ADDITI ON OF RS.51,69,970/- MADE ON ACCOUNT OF DEFERRED REVENUE EXPENDITURE WHEREAS GROUND NO.3RELATES TO ADDITION OF RS.18,67, 796/- ON ACCOUNT OF DEPRECIATION CLAIMED ON CAPITALIZED EXPENDITURE. DURING THE COURSE OF THE PRESENT PROCEEDINGS, THE AR FILED WRI TTEN SUBMISSIONS AS WELL AS AN ORDER DATED 03.04.2009 PASSED BY MY LD. PREDECESSOR FOR ASSESSMENT YEAR 2006-07 IN ITS OWN CASE AND THAT OF ITAT FOR ASSESSMENT YEAR 2003-04, 2004-05, 2005-06 AND 2006- 07 IN I T APPEAL NOS. 472, 550, 551 AND 3038 (DEL.) OF 2009. IT IS INTIMATED THAT ON SIMILAR FACTS AND CIRCUMSTANCES, MY LD. PRE DECESSOR DECIDED BOTH THE ISSUES IN FAVOUR OF THE APPELLANT COMPANY BUT ON FURTHER APPEAL BY THE DEPARTMENT, THE ITAT, DELHI BENCH F , DELHI IN AN ORDER DATED 08.01.2010, REVERSED THE ORDER OF CIT(A ) AND RESTORED THE ORDER OF THE ASSESSING OFFICER. THIS BEING THE POS ITION, I HEREBY FOLLOW THE ORDER DATED 08.01.2010 OF ITAT, NEW DELH I AND UPHOLD BOTH THE ADDITIONS MADE BY THE ASSESSING OFFICER. IN THE RESULT, THE APPEAL IS DISMISSED. 3. NOW, THE ASSESSEE IS IN APPEAL BEFORE US. 4. AT THE OUTSET, LD. A.R. PLACED ON RECORD A COPY OF HON'BLE HIGH COURTS ORDER IN APPEAL NO. 57 OF 2011 DATED 30.09. 2011 IN ASSESSEES OWN CASE AND SUBMITTED THAT THE CASE OF THE ASSESSEE IS COVERED BY THE SAID DECISION OF HON'BLE HIGH COURT. 5. LD. D.R. AGREED TO THE SUBMISSION OF THE ASSESSE E. 6. WE HAVE HEARD RIVAL PARTIES AND HAVE GONE THROUG H THE MATERIAL PLACED ON RECORD, WE FIND THAT THE ASSESSEE HAD INCURRED C ERTAIN EXPENDITURE IN ASSESSMENT YEAR 2003-04 AND IT HAD CLAIMED AS 1/5 TH IN THAT YEAR AND BALANCE WAS CARRIED FORWARD TO THE NEXT YEARS FOR CLAIMING IN THE NEXT YEARS @ 1/5 TH IN EACH YEAR. THE ASSESSING OFFICER HAD MADE THE A DDITIONS ON ACCOUNT OF DISALLOWANCE OF DEFERRED REVENUE EXPENDITURE WHICH WAS CONFIRMED BY ITA NO.3326/DEL/2010 3 HON'BLE DELHI HIGH COURT. HOWEVER, THE HON'BLE HIG H COURT PERMITTED THE ASSESSEE TO APPROACH ASSESSING OFFICER FOR ALLOWING THE ENTIRE AMOUNT IN ASSESSMENT YEAR 2003-04 ITSELF AS PER LAW. THE HON 'BLE HIGH COURT VIDE PARA 11-14 HAS HELD AS UNDER: 11. IN FACT, MR. AGGARWAL, AT THE TIME OF ARGUING THESE APPEALS, AFTER PUTTING A FEEBLE ATTEMPT IN QUESTIONING, THE WISDOM OF THE TRIBUNAL ADOPTING THE AFORESAID APPROACH, LAID EMPH ASIS ON ALTOGETHER DIFFERENT ASPECT AND THE EFFECT THEREOF WOULD BE ONLY ON ITA 57/2011. HIS PLEA WAS THAT IF THE COURSE OF ACTION ADOPTED BY THE REVENUE AUTHORITIES IS TO BE, ACCEPTED, THAT WOULD MEAN THAT IT WAS NOT OPEN FOR THE ASSESSEE TO SPREAD OVER THE SAID EXPEN DITURE IN THE FORM OF INTEREST ETC. OVER A PERIOD OF FIVE YEARS WHICH WOULD MEAN THAT THE ASSESSEE COULD HAVE CLAIMED THE ENTIRE EXPENDITURE IN THE YEAR IN QUESTION I.E. IN THE ASSESSMENT YEARS 2003-04. ON T HIS PREMISE, HIS SUBMISSION WAS THAT IN THAT EVENTUALLY THAT THE EXP ENDITURE WAS IN FACT INCURRED IN THE SAID ASSESSMENT YEAR EXPENDITURE OF RS.6,23,73,947/- SHOULD BE ALLOWED TO THE ASSESSEE IN THE ASSESSMENT YEAR 2003-04. 12. MS. SURUCHI AGGARWAL LEARNED COUNSEL APPEARING FOR THE REVENUE, ON THE OTHER HAND, SUBMITTED THAT WHEN NO SUCH CLAIM WAS EVER MADE BY THE ASSESSEE IN THE YEAR IN QUESTION, IT SHOULD NOT BE ALLOWED. SHE FURTHER SUBMITTED THAT FOR THE FIRST T IME THIS PLEA WAS RAISED IN THE INSTANT APPEAL AND EVEN BEFORE THE TR IBUNAL NO SUCH CASE WAS SET UP. SHE ARGUED THAT UNLESS THE CLAIM IS MAD E EITHER IN THE RETURN OR AT LEAST IN THE REVISED RETURN, THE ASSES SEE WILL NOT PERMITTED TO PUSH THAT CLAIM. 13. TECHNICALLY, MS. SURUCHI AGGARWAL MAY BE CORRE CT IN HER SUBMISSIONS. AT THE SAME TIME, THAT WOULD AMOUNT TO NOT ALLOWING THE APPELLANT/ASSESSEE THE CLAIM THE EXPENDITURE INCURR ED ON INTEREST ETC. EVEN IN THE ASSESSMENT YEAR 2003-04 THOUGH THE ASSE SSEE WAS ADMITTEDLY ENTITLED TO CLAIM THE SAME IN THAT YEAR, WE MAKE THIS OBSERVATION HAVING REGARD TO THE FACT THAT THERE IS NO DISPUTE ABOUT THE GENUINENESS OF THE SAID EXPENDITURE INCURRED IN THE ASSESSMENT YEAR IN QUESTION. 14. IN THESE CIRCUMSTANCES,: WE PERMIT THE ASSESSE E TO RAISE SUCH A CLAIM IN THE YEAR IN QUESTION BY APPROACHING THE AS SESSING OFFICER, IN ACCORDANCE WITH LAW. ITA NO.3326/DEL/2010 4 7. FROM THE ABOVE FINDINGS OF HON'BLE HIGH COURT, W E FIND THAT THE HON'BLE HIGH COURT HAS DISMISSED THE APPEAL OF THE ASSESSEE. HOVERER, IT HAS PERMITTED THE ASSESSEE TO APPROACH THE ASSESSING OF FICER FOR THE CLAIM OF ENTIRE AMOUNT IN ASSESSMENT YEAR 2003-04. WE OBSER VE THAT THE CLAIM IN THIS YEAR HAS ALSO SPILLED OVER FROM ASSESSMENT YEAR 200 3-04 FOR WHICH THE HON'BLE HIGH COURT HAD PERMITTED THE ASSESSEE TO AP PROACH THE ASSESSING OFFICER. IN VIEW OF THE ABOVE, THE APPEAL FILED BY THE ASSESSEE DOES NOT HOLD ANY GROUND AS HON'BLE DELHI HIGH COURT HAS IN FACT DISMISSED THE APPEALS OF ASSESSEE ON SIMILAR GROUNDS WITH A LIBERTY GRANTED TO ASSESSEE TO APPROACH ASSESSING OFFICER FOR ALLOWANCE OF ENTIRE CLAIM IN THE YEAR 2003-04 ITSELF. SINCE, HON'BLE COURT HAS ALREADY PERMITTED ASSESSEE TO APPROACH ASSESSING OFFICER, GROUND NO.4 BEFORE US DO NOT HELD ANY MERI T. GROUND NO.1 IS GENERAL AND DOES NOT REQUIRE ANY ADJUDICATION. GRO UNDS NO.2 & 3 ARE NOT ALLOWABLE AS PER HON'BLE HIGH COURT ORDER. 8. IN VIEW OF THE ABOVE, THE APPEAL FILED BY THE AS SESSEE IS DISMISSED. SD./- SD./- (DIVA SINGH) (T.S. KA POOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 18 TH JULY, 2014 SP COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). ITA NO.3326/DEL/2010 5 DATE OF HEARING DATE OF DICTATION DATE OF TYPING DATE OF ORDER SIGNED BY BOTH THE MEMBERS & PRONOUNCEMENT. DATE OF ORDER UPLOADED ON NET & SENT TO THE BENCH CONCERNED.