THE GADCHIROLI DIST. CENTRAL CO OP. BANK LTD., Gadchiroli V. THE JT, CIT,CHANDRAPUR RANGE, Chandrapur

ITA 337/NAG/2016

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 8546 (ITAT-NAGPUR)
• Duration Of Justice: 5 year(s) 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 12-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AGNES THOMAS
• Keywords: Capital expenditure
• Section: 143(3); 37(1)

Judgement Text

आयकर अपीलीय अिधकरण ᭠यायपीठ, नागपुर मᱶ । IN THE INCOME TAX APPELLATE TRIBUNAL BENCH, NAGPUR (At e-Court, PUNE) BEFORE SHRI INTURI RAMA RAO, AM AND SHRI S. S. VISWANETHRA RAVI, JM आयकर अपील सं. / ITA No.337/NAG/2016 िनधाᭅरण वषᭅ / Assessment Year : 2011-12 The Gadchiroli Dist. Central Co-Op. Bank Ltd., Dhanora Road, Gadchiroli- 442605. PAN : AAAJT0723H .......अपीलाथᱮ / Appellant बनाम / V/s. Jt. CIT, Chandrapur Range, Chandrapur. ......ᮧ᭜यथᱮ / Respondent Assessee by : None Revenue by : Smt. Agnes Thomas सुनवाई कᳱ तारीख / Date of Hearing : 10.11.2021 घोषणा कᳱ तारीख / Date of Pronouncement : 15.11.2021 आदेश / ORDER PER INTURI RAMA RAO, AM: This is an appeal filed by the assessee directed against the order of ld. Commissioner of Income Tax (Appeals)-4, Nagpur (‘CIT(A)’ for short) dated 18.02.2016 for the assessment year 2011-12. 2. The appellant raised the following grounds of appeal :- “1. On the facts and in circumstances of the case the Learned CIT (Appeals) erred in law on merit in confirming addition of Rs.30,23,894/- as capital expenditure where such expenditure was of revenue in nature and allowable u/s 37(1) of the Act. 2. The assessee craves for leave to add, amend, alter or delete any of the grounds of appeal with the permission of the Hon’ble Tribunal.” 3. Briefly, the facts of the case are as under : The appellant is a District Co-operative Bank engaged in the business of cooperative banking. The return of income for the 2 ITA No.337/NAG/2016 assessment year 2011-12 was filed on 13.09.2011 declaring total income of Rs.12,75,53,570/-. Against the said return of income, the assessment was completed by the Joint Commissioner of Income Tax, Chandrapur Range, Chandrapur (‘the Assessing Officer’) vide order dated 20.02.2014 passed u/s 143(3) of the Income Tax Act, 1961 (‘the Act’) at a total income of Rs.26,86,79,081/- after making several disallowances. One of the disallowance we are concerned with is on account of expenditure incurred on maintenance of building of Rs.30,23,894/- holding it to be capital expenditure. Even on appeal before the ld. CIT(A), the same came to be confirmed by the ld. CIT(A). 4. Being aggrieved by the decision of the ld. CIT(A), the appellant is in appeal before us in the present appeal. 5. When the appeal was called on, none appeared on behalf of the assessee despite due service of notice. Therefore, we proceed to dispose of this matter by considering the material on record. 6. During the previous year relevant to the assessment year under consideration, the assessee bank incurred the following expenditure towards maintenance of building expenditure :- 1 Water Drainage Rs.6,17,049/- 2 Sanitary Lines Rs.1,90,195/- 3 Concrete Road Rs.14,21,114/- 4 Compound Wall Rs.5,13,160/- 5 Add: Service Tax Rs.2,82,373/- Total Rs.30,23,891/- 3 ITA No.337/NAG/2016 7. The Assessing Officer was of the view that as result of this expenditure a new asset has been created and, accordingly, held it to be capital expenditure. The nature of expenditure was explained before the ld. CIT(A) and is extracted by the ld. CIT(A) vide para 7.2 of his order. From the perusal of the explanation filed, it is clear that as a result of this expenditure, no new asset has been created. The expenditure was incurred only for the maintenance of the existing building which owned and used for the business of the assessee. The expenditure is incurred only for the purpose of business of deriving benefit of preserving the business or to facilitate the running of the business and, therefore, the decision of the Hon’ble Rajasthan High Court in the case of CIT vs. Rajasthan Spg. And Wvg. Mills Ltd., 272 ITR 487 and the decision of the Hon’ble Supreme Court in the case of Empire Jute Co. Ltd vs. CIT, 124 ITR 1 (SC) is squarely applicable to the facts of the present case. Accordingly, keeping in view of the above precedents, we are of the considered opinion that the expenditure incurred is purely revenue in nature incurred wholly or exclusively for the purpose of business of the assessee. Therefore, the same falls within the realm of revenue expenditure. Accordingly, the ground of appeal of the assessee is allowed. 8. In the result, the appeal filed by the assessee stands allowed. Order pronounced on this 15 th day of November, 2021. Sd/- Sd/- (S. S. VISWANETHRA RAVI) (INTURI RAMA RAO) ᭠याियक सद᭭य/JUDICIAL MEMBER लेखा सद᭭य/ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 15 th November, 2021. Sujeet 4 ITA No.337/NAG/2016 आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant 2. ᮧ᭜यथᱮ / The Respondent 3. 4. 5 6. The CIT(A)-4, Nagpur. The Pr. CIT-3, Nagpur. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, नागपुर / DR, ITAT, “Nagpur” Pune; गाडᭅ फाईल / Guard file. आदेशानुसार/ BY ORDER // True Copy // वᳯर᳧ िनजी सिचव / Sr. Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune.