ENERCON (I) LTD, MUMBAI V. ASST CIT 8(1), MUMBAI

ITA 4107/MUM/2011

• Counselvise Citation: 410719914 RSA 2011
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2004-2005
• Appeal Filed On: 18-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B JAYA KUMAR
• Section: 143(3); 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH E, MUMBAI BEFORE SHRI N.V.VASUDEVAN(J.M) & SHRI R.K.PANDA (A .M) ITA NO.4107/MUM/2011(A.Y.2004-05) ENERCON (INDIA) LIMITED, ENERCON TOWER, PLOT NO.A-9, VEERA INDUSTRIAL ESTATE, VEERA DESAI ROAD, ANDHERI (W), MUMBAI 400 053. PAN:AAACE0319D (APPELLANT) VS. THE ACIT 8(1), AAYKAR BHAVAN, MK ROAD, MUMBAI 20. (RESPONDENT) APPELLANT BY : SHRI J.P.BAIRAGRA RESPONDENT BY : SHRI B.JAYAKUMAR DATE OF HEARING : 08/09/2011 DATE OF PRONOUNCEMENT : 14/0 9/2011 ORDER PER N.V.VASUDEVAN, J.M, THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDE R DATED 22/3/11 OF CIT(A)-16, MUMBAI RELATING TO ASSESSMENT YEAR 2004- 05. 2. THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINES S OF MANUFACTURE OF WIND TURBINE GENERATORS (WIND MILLS), ACCESSORIES A ND PARTS. THE ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX A CT, 1961(THE ACT) WAS COMPLETED ON 29/12/2006, DETERMINING NIL TOTAL INCO ME UNDER THE NORMAL PROVISIONS OF THE ACT. HOWEVER, THE BOOK PROFIT UN DER SECTION 115JB OF THE ACT WAS COMPUTED AT RS. 67,54,55,468/- AND THE ASSE SSEE WAS ULTIMATELY TAXED ON BOOK PROFITS AS PER THE PROVISIONS OF SEC. 115JB OF THE ACT. THE ASSESSEE HAD DEBITED AN AMOUNT OF RS. 485.33 LACS O N ACCOUNT OF PROVISION ITA NO.4107/MUM/2011(A.Y. 2004-05) 2 FOR REPAIRS AND MAINTENANCE IN THE PROFIT AND LOSS ACCOUNT AND THAT THE ENTIRE PROVISION ALONG WITH THE OLD PROVISION FOR R EPAIRS AND MAINTENANCE WAS OUTSTANDING AS PAYABLE IN THE BALANCE SHEET. T HE CLAIM WAS ALLOWED BY THE ASSESSING OFFICER IN THE ORDER U/S. 143(3) OF T HE ACT BOTH WHILE COMPUTING TOTAL INCOME AS PER THE NORMAL PROVISIONS OF THE ACT AS WELL AS PER THE PROVISIONS OF SEC.115JB OF THE ACT. 3. THE COMMISSIONER OF INCOME TAX-8, MUMBAI IN EXE RCISE OF HIS POWERS U/S. 263 OF THE ACT PASSED AN ORDER DT.25/3/2009 H OLDING THAT THE ORDER OF THE AO AS AFORESAID WAS ERRONEOUS AND PREJUDICIAL T O THE INTEREST OF THE REVENUE. THE CIT -8, MUMBAI, IN THE ORDER U/S. 26 3 DATED 25/3/2009, MODIFIED THE ORDER OF THE AO AND DIRECTED RE-COMPUT ATION OF THE TOTAL INCOME OF THE ASSESSEE UNDER THE NORMAL PROVISIONS OTHER T HAN SECTION 115JB AND UNDER SECTION 115JB OF THE ACT AS FOLLOWS: ACCORDINGLY, THE ASSESSMENT MADE BY THE AO IS MODI FIED TO THE EXTENT THAT THE PROVISION OF CLAIM BY THE ASSESSEE OF RS. 485.33 LACS FOR REPAIRS AND MAINTENANCE AS EXPLAINED IN THE PROFIT & LOSS ACCOUNT IS LIABLE TO BE ADDED BACK TO THE INCOME TO BE COMPUTE D UNDER THE NORMAL PROVISIONS AS WELL AS ADDED BACK TO THE BOOK PROFITS FOR COMPUTING LIABILITY U/S. 115JB. THE ASSESSMENT MAD E BY THE AO IS ACCORDINGLY SET ASIDE AND THE AO IS DIRECTED TO RE- COMPUTE THE INCOME UNDER THE NORMAL PROVISIONS OF I.T. ACT AS WELL AS THE BOOK PROFIT U/S. 115JB AND ISSUE DEMAND NOTICE ACCORDINGLY. 4. THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) A GAINST THE ORDER OF THE AO. THE CIT(A) HOWEVER DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF THE CIT(A) THE ASSESSEE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING OF THE APPEAL IT WAS BRO UGHT TO OUR NOTICE THAT AGAINST THE ORDER OF THE CIT DATED 25/3/09 PASSED UNDER SECTION 263 OF THE ACT, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE TR IBUNAL IN ITA NO.3408/M/09 AND THE HONBLE TRIBUNAL BY ITS ORDER DATED 3/6/11 WAS ITA NO.4107/MUM/2011(A.Y. 2004-05) 3 PLEASED TO QUASH THE ORDER UNDER SECTION 263 OF THE ACT. IN VIEW OF THE ABOVE THE CONSEQUENTIAL ORDER PASSED UNDER SECTION 143(3) R.W.S. 263 OF THE ACT AND THE ADDITION MADE IN THAT ORDER CANNOT SURV IVE. ACCORDINGLY WE ALLOW THE APPEAL OF THE ASSESSEE AND HOLD THAT THE DISALLOWANCE FOR PROVISION OF REPAIRS AND MAINTENANCE WHILE COMPUTING TOTAL IN COME AS PER NORMAL PROVISIONS OF THE ACT AS WELL AS FOR COMPUTING BOOK PROFITS UNDER SECTION 115 JB OF THE ACT CANNOT BE SUSTAINED AND THE SAME IS H EREBY DELETED. 6. IN THE RESULT, THE APPEAL BE THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON TH E 14 TH DAY OF SEPT., 2011. SD/- SD/- (R.K.PANDA ) (N.V.VASUDEVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED. 14 TH SEPT.2011 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3 . THE CIT CITY CONCERNED 4. THE CIT(A)- CONCERNED 5. THE D.RE BENCH. (TRUE COPY) BY ORDER ASST. REGISTRAR, I TAT, MUMBAI BENCHES MUMBAI. VM. ITA NO.4107/MUM/2011(A.Y. 2004-05) 4 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 8/9/11 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 12/9/11 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7. FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER