M/s. Brindavan Agro Industries Ltd., New Delhi V. DCIT, New Delhi

ITA 4099/DEL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53325 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 22-11-2011
• Assessment Year: 2008-2009
• Appeal Filed On: 09-09-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRS ANUSHA KHURANA
• Assessee Lawyers: KULBHUSHAN SHARMA
• Keywords: Capital asset; Depreciation; Revenue expenditure; Capital expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : A : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI A.N. PAHUJA, ACCOUNTANT MEMBER ITA NO.4099/DEL/2011 ASSESSMENT YEAR : 2008-09 BRINDAVAN AGRO INDUSTRIES LTD., 3/16, WEST PATEL NAGAR, NEW DELHI. PAN : AAACB0258J VS. DCIT, CIRCLE 3 (1), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI KULBHUSHAN SHARMA, CA REVENUE BY : MRS. ANUSHA KHURANA, SR.DR ORDER PER I.P. BANSAL, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT (A) DATED 7 TH JULY, 2011 FOR ASSESSMENT YEAR 2008-09. THE GROUNDS OF APPEAL READ AS UNDER:- 1. THE LD. CIT (A) HAS ERRED IN LAW AND FACTS IN DIS ALLOWING THE DEFERRED REVENUE EXPENDITURE AMOUNT TO RS.1,66,942/-. 2. THE LD. CIT (A) HAS ERRED IN LAW AND FACTS IN DISALL OWING THE TELEPHONE EXPENDITURE AMOUNT TO RS.56,300/-. 2. THE RETURN OF INCOME WAS FILED BY THE ASSESSEE AT NIL . IT WAS NOTICED BY THE ASSESSING OFFICER THAT A SUM OF ` 1,56,94 2/- HAS BEEN CLAIMED AS DEFERRED REVENUE EXPENDITURE. THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO EXPLAIN THE SAME. THE SAID AMOU NT WAS PART OF THE CAPITAL EXPENDITURE INCURRED BY THE ASSESSEE ON CONSTRUCTION OF BUILDING ON LEASED PREMISES AND 10% OF THE COST WAS WRIT TEN OFF AND THE ASSESSEE HAS BEEN CLAIMING THIS EXPENDITURE FROM YEAR TO YEAR. ITA NO.4099/DEL/2011 2 THE ASSESSEE STATED BEFORE THE ASSESSING OFFICER THAT THE CA PITAL AMOUNT WAS EXPENDED IN ASSESSMENT YEAR 2007-08 AND NOTIN G FROM THIS FACT THE ASSESSING OFFICER HELD THAT PERIOD OF TEN YEARS HAS ALREADY BEEN EXPIRED, THEREFORE, NO PART OF THE SAID EXPENDI TURE REMAINS TO BE CLAIMABLE. 3. AGAINST THE AFOREMENTIONED FINDINGS, LEARNED CIT ( A) HAS RECORDED A FINDING THAT DURING THE ASSESSMENT YEARS 1997 -98 THE ASSESSEE COMPANY HAS TAKEN A PREMISES ON LEASE ON WHICH EXPENDITURE OF ` 19,91,970/- WAS INCURRED FOR CONSTRU CTION AND FURNISHING FOR THE PURPOSE OF BUSINESS. THE ASSESSEE DID NO T CLAIM THE ENTIRE EXPENDITURE AS REVENUE EXPENDITURE DURING THE ASSESSMENT YEAR 1997-98 AND IT OPTED TO AMORTIZE THE OTHER EXPENDIT URE FOR TEN YEARS. THUS, HE HAS RECORDED A FINDING THAT THE FIRST YEAR FO R INCURRING THE EXPENDITURE WAS ASSESSMENT YEAR 1997-98 AND TENTH YEAR T HEREOF WILL BE 2006-07 AND THE PRESENT YEAR BEING 12 TH YEAR, THE ASSESSEE HAS NO AMOUNT LEFT TO BE ALLOWED AS SUCH. AS AGAINST IT, IT I S THE CASE OF THE ASSESSEE THAT FOR THE FIRST TIME THE EXPENDITURE WERE CL AIMED IN ASSESSMENT YEAR 1998-99 AND, THUS, THIS AMOUNT WAS PART OF THE SAID AMOUNT. THEREFORE, IT HAS BEEN CLAIMED BY THE LEARN ED AR OF THE ASSESSEE THAT THE MATTER MAY BE RESTORED BACK TO THE FIL E OF THE ASSESSING OFFICER FOR VERIFICATION THAT WHETHER THE ASSESSE E HAS CLAIMED THE ENTIRE AMOUNT. 4. ON THE OTHER HAND, RELYING UPON THE ORDER OF ASSE SSING OFFICER AND CIT (A), IT IS THE CASE OF THE LEARNED DR THAT TH E AMOUNT HAS RIGHTLY BEEN DISALLOWED BY THE ASSESSING OFFICER AND HAS RIGHTLY BEEN UPHELD BY THE CIT (A). 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. AFTER HEARING BOTH T HE PARTIES, AS IT IS A MATTER OF VERIFICATION ONLY, WE RESTORE THIS ISSUE TO T HE FILE OF ASSESSING ITA NO.4099/DEL/2011 3 OFFICER WITH A DIRECTION TO VERIFY THAT WHETHER OR NOT THE ASSESSEE HAS ANY AMOUNT LEFT TO BE ALLOWED FOR THE YEAR UNDER CO NSIDERATION OUT OF CAPITAL EXPENDITURE WHICH HAS BEEN AMORTIZED BY THE ASSESSEE. WE, THEREFORE, RESTORE THIS ISSUE TO THE FILE OF ASSESSING OFFI CER TO DECIDE THIS ISSUE IN ACCORDANCE WITH THE AFOREMENTIONED DIREC TIONS. IF THE ENTIRE AMOUNT HAS ALREADY BEEN CLAIMED BY THE ASSESSEE, THEN, THE ASSESSING OFFICER WILL CONSIDER THE CLAIM OF THE ASSESSEE AC CORDINGLY. FIRST GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 6. APROPOS GROUND NO.2, ON EXAMINATION OF DETAILS REG ARDING TELEPHONE EXPENSES WHICH WAS AGGREGATING TO AN AMOUNT OF ` 7,95,521/-, THE ASSESSING OFFICER FOUND THAT A SUM OF ` 56,300/- RELATED TO PURCHASE OF MOBILE PHONE WHICH HE HAS TREATED AS CA PITAL EXPENDITURE. LEARNED CIT (A) HAS CONFIRMED THE ADDI TION MADE BY THE ASSESSING OFFICER. THE ASSESSEE IS AGGRIEVED, HENCE, IN APP EAL. 7. WE HAVE HEARD BOTH THE PARTIES ON THIS ISSUE. PURCH ASE OF NEW MOBILE PHONE IS CERTAINLY A CAPITAL ASSET THE ENTIRE C OST OF WHICH CANNOT BE CLAIMED IN THE YEAR OF PURCHASE. HOWEVER, THE ASSESSEE WILL BE ENTITLED FOR DEPRECIATION WHICH WILL BE ALLOWED BY THE A.O. AT THE APPROPRIATE RATE PRESCRIBED UNDER THE DEPRECIATION C HART. THEREFORE, WE DIRECT THE ASSESSING OFFICER THAT IF THE DEPRECIATIO N IS NOT ALLOWED ON THE PURCHASE OF MOBILE PHONE, THEN, ALLOW THE SAME . THIS GROUND IS PARTLY ALLOWED FOR STATISTICAL PURPOSES IN THE MANNER A FORESAID. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES IN THE MANNER AFORESAID. THE ORDER PRONOUNCED IN THE OPEN COURT ON 30.11.20 11. SD/- SD/- [A.N. PAHUJA] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 30.11.2011. ITA NO.4099/DEL/2011 4 DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES