ACIT, New Delhi V. M/s. Sunbeam Auto Pvt. Ltd., New Delhi

ITA 4428/DEL/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5496 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 13-02-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 16-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R R MARUYA
• Assessee Lawyers: RENUKA JAIN GUPTA
• Keywords: Question of law; Revenue expenditure

Judgement Text

ITA NO. 4428/DEL/2012 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI C.M. GARG, JUDICIAL MEMBER I.T.A. NO. 4428/DEL/2012 A.Y. : 2009-10 ACIT, CIRCLE 9(1), ROOM NO. 163, CR BUILDING, NEW DELHI VS. M/S SUNBEAM AUTO PVT. LTD., S-323A, PANCHSHEEL PARK, NEW DELHI 110 017 (PAN: AABCS 2948F) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : SMT. RENUKA JAIN GUPTA, SR. D.R. DEPARTMENT BY : S MT. SHASHIM KAPILA, & SH. R.R. MARUYA, ADVOCATES ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS-XII), NEW D ELHI DATED 28.5.2012 PERTAINING TO ASSESSMENT YEAR 2009-10. 2. THE ISSUE RAISED IS THAT LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 5,93,58,962/- IMPOSED BY THE AO BY TREATING THE EXPENDITURE ON TOOLS AND DIES AS CAPITAL IN NATURE. 3. IN THIS CASE AO CAPITALIZED THE PURCHASE OF TOOL S AND DIES OF RS. 14,44,80,405/- WHICH WAS CLAIMED BY THE ASSESS EE AS REVENUE EXPENDITURE AND MADE AN ADDITION OF RS. 5,93,58,962 /- AFTER ALLOWING THE DEPRECATION OF COST OF TOOLS AND DIES ON EARLIER YEARS AT RS. 8,51,21,444/-. ITA NO. 4428/DEL/2012 2 4. UPON ASSESSEES APPEAL LD. CIT(A) FOLLOWING THE ITATS ORDER IN ASSESSEES OWN CASE VIDE ITA NO. 2783 & ORS. FOR A. Y. 2000-01, 2002-03 TO 2008-09 VIDE ORDER DATED 13.9.2011 DELET ED THE ADDITION. 5. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORDS. LD. COUNSEL OF THE ASSESSEE AT THE OUT SET SUBMITTED TH AT THE ISSUE IS SQUARELY COVERED IN FAVOR OF THE ASSESSEE BY THE D ECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR EARLIER YEARS A S CITED ABOVE. IT WAS FURTHER SUBMITTED THAT THE ABOVE ORDER OF THE I TAT WAS DULY UPHELD BY THE HONBLE JURISDICTIONAL HIGH COURT. 7. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND PERUSED THE RECORDS. WE FIND THAT ADDITION ON ACCOUNT OF CAPIT ALIZATION OF TOOLS AND DIES HAS BEEN DULY DELETED BY THE TRIBUNAL IN A SSESSEES OWN CASE IN EARLIER YEARS. THE HONBLE HIGH COURT ALSO HELD IN ASSESSEES OWN CASE IN ITA NO. 351/2012 VIDE ORDER DATED 21.5. 2012 HAS AFFIRMED THE TRIBUNALS ORDER. WE MAY REFER HERE T HE PARA 6 OF THE AFORESAID ORDER OF THE HONBLE HIGH COURT. 6. WE DO NOT THINK THAT ANY SUBSTANTIAL QUESTI ON OF LAW ON THIS ASPECT/ISSUE ARISES FROM THE DECISION OF THE TRIBUNAL. IT HAS BEEN FACTUALLY FOUND AND THA T TOO CONCURRENTLY BY THE CIT (APPEALS) AND THE TRIBUNAL THAT THE PURCHASE OF DIES AND MOULDS DID NOT BRING INTO EXISTENCE ANY PERMANENT OR ENDURING ITA NO. 4428/DEL/2012 3 ADVANTAGE TO THE ASSESSEE. IT HAS BEEN FOUND THAT DUE TO CONTINUOUS USE THEY WEAR OUT FAST AND FURTHER ANY MINOR DEFECT IN THE MOULD ON ACCOUNT OF CONTINUOUS USE SUCH AS CHIPPING OR CRACKING WOULD RENDER THEM USELESS. IN ANY CASE THE LONGEVITY OF THE MOULDS AND DIES IS NOT SUBSTANTIAL AS HELD BY THE TRIBUNAL AND THEY HAVE TO BE REPLACED FREQUENTLY TO ENSURE QUALITY OF THE PRODUCT. MOREOVER, THE MOULDS HAVE TO BE PRODUCED TO SUIT THE REQUIREMENTS OF THE PARTICULAR CUSTOMER AND AFTER THE ORDER IS MET, THEY BECOME USELESS AND ULTIMATELY HAVE TO BE DESTROYED TO PREVENT MISUSE OR MANUFACTURE OF FAKES. IT HAS ALSO BEEN FOUND BY THE APPELLATE AUTHORITIES THAT THE EXPENDITURE ON REPLACEMENT OF DIES AND MOULDS WAS EARLIER ALLOWED BY THE INCOME TAX AUTHORITIES AS REVENUE EXPENDITURE. THESE ARE FACTUAL FINDINGS RECORDED B Y THE TRIBUNAL WHICH ARE NOT DISPUTED BEFORE US BY TH E REVENUE ON THE BASIS OF ANY EVIDENCE OR MATERIAL. IT IS WELL SETTLED THAT ANY EXPENDITURE ON REPLACEMENT OR REPAIRS TO PLANT AND MACHINERY WHICH DOES NOT BRING INTO EXISTENCE ANY ENDURING OR PERMANENT ADVANTAGE IN THE CAPITAL FIELD IS ALLOWABLE AS REVENUE EXPENDITURE. THE TRIBUNAL HAS ONLY APPLIED THIS SETTLED LEGAL POSITION TO THE UNDISPUTED FACTS FOUND. THEREFORE NO SUBSTANTIAL QUESTION OF LAW ARISES FOR OUR CONSIDERATION. THE APPEALS ON THIS POINT ARE ACCORDINGLY DISMISSED. ITA NO. 4428/DEL/2012 4 8. WE FIND THAT THE FACTS IN THE PRESENT CASE ARE I DENTICAL. RESPECTFULLY FOLLOWING THE PRECEDENT AS ABOVE, WE D O NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A). HENCE, WE UPHOLD THE SAME. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13/2/2014, UP ON CONCLUSION OF HEARING. SD/- SD/- [ [[ [C.M. GARG C.M. GARG C.M. GARG C.M. GARG] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 13/2/2014 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES