M/s. Kisan Sahkari Chinni Mills Ltd. Nanauta, New Delhi V. DCIT, Uttar Pradesh

ITA 4485/DEL/2016

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5739 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 23-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST D ATED; PASSED
• Section: 143(2)

Judgement Text

1 ITA NOS. 4485 & 4606/DEL/2016 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C NEW DELHI BEFORE MS SUCHITRA KAMBLE, JUDICIAL ME MBER AND SH. PRASHANT MAHARISHI, ACCOUN TANT MEMBER I.T.A. NO.4485/DEL/201 6 (A.Y 2012-13) (THROUGH VIDEO CON FERENCING) KISAN SAHKARI CHINNI MILLS LTD. NANAUTA, C/O. S. P. JAIN AND ASSOCIATES, 303-305, BHANOT HOUSE, 17, YUSUF SARAI COMMERCIAL COMPLEX, NEW DELHI AAAAK0211G (APPELLANT) VS DCIT CIRCLE SAHARANPUR UTTAR PRADESH (RESPONDENT) I.T.A. NO.4606/DEL/201 6 (A.Y 2012-13) THE KISAN COOPERATIVE SUGAR FACTORY LTD. C/O. S. P. JAIN AND ASSOCIATES, 303-305, BHANOT HOUSE, 17, YUSUF SARAI COMMERCIAL COMPLEX, NEW DELHI AAAJT1019Q (APPELLANT) VS DCIT CIRCLE SAHARANPUR UTTAR PRADESH (RESPONDENT) ORDER PER SUCHITRA KAMBLE, JM THEE TWO APPEALS ARE FILED BY THE ASSESSEE AGAINST THE ORDER DATED 21.06.2016 & 27.06.2016 PASSED BY CIT (A) - MUZAFFA RNAGAR FOR ASSESSMENT YEAR 2012-13. APPELLANT BY SH. ANIL KUMAR JAIN, ADV RESPONDENT BY MS. ANIMA BARNWAL, SR. DR DATE OF HEARING 13.09.2021 DATE OF PRONOUNCEMENT .09.2021 2 ITA NOS. 4485 & 4606/DEL/2016 2. THE GROUNDS OF APPEAL ARE AS UNDER:- I.T.A. NO.4485/DEL/2016 (A.Y 2012-13) 1. THE LD.CIT(A) HAS ERRED IN CONFIRMING THE DIS ALLOWANCE OF RS. 27,24,675/- AS AGAINST ADDITION OF RS.32,28,723/- M ADE BY ASSESSING OFFICER ON ACCOUNT OF REPAIR AND MAINTENANCE OF PLANT AND M ACHINERY ON ESTIMATE BASIS. 2. THE ORDER OF THE LD.CIT(A) IS AGAINST LAW AND F ACTS OF THE CASE. I.T.A. NO.4606/DEL/2016 (A.Y 2012-13) 1. THE LD.CIT(A) HAS ERRED IN CONFIRMING THE DI SALLOWANCE OF RS. 27,24,675/- AS AGAINST ADDITION OF RS.32,28,723/- M ADE BY ASSESSING OFFICER ON ACCOUNT OF REPAIR AND MAINTENANCE OF PLANT AND M ACHINERY ON ESTIMATE BASIS. 2. THE ORDER OF THE LD.CIT(A) IS AGAINST LAW AND F ACTS OF THE CASE. 3. BOTH THE APPEALS ARE ON IDENTICAL ISSUE, THEREFO RE, WE ARE TAKING UP THE APPEAL BEING ITA NO. 4485/DEL/2016. THE RETURN OF I NCOME WAS FILED ON 27-09- 2012 AT THE LOSS OF RS.57,48,86,686/-. THE SAME HAS BEEN ASSESSED U/S 143(1). LATER ON NOTICES U/S 143(2) ON 07.08.2013 AND U/S 1 42(1). THE ASSESSING OFFICER HAS DISALLOWED RS. 3,22,8,723/- BEING 10% O F TOTAL EXPENSES ON REPAIR AND MAINTENANCE AMOUNTING TO RS. 32287236 ON ESTIMA TE BASIS BEING SCRAP GENERATED AND NOT SHOWN AS A PART OF STOCK OR SALE. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT (A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 5. THE LD. AR SUBMITTED THAT THE DISTRICT MAGISTRAT E OF THE AREA IS A CHAIRMAN OF THE SOCIETY AND ANY SCRAP CAN BE SOLD W ITH HIS APPROVAL AND BY TENDERS. SINCE SCRAP IS GENERATED IN SMALL QUANTITY HENCE THE SAME IS ACCUMULATED AND SOLD AFTER TWO OR THREE YEARS BY FO LLOWING THE PROCEDURE LAID DOWN AND AS PER THE APPROVAL OF DISTRICT MAGISTRATE . 3 ITA NOS. 4485 & 4606/DEL/2016 6. THE LD. DR RELIED UPON THE ASSESSMENT ORDER AND THE ORDER OF THE CIT(A). 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL T HE RELEVANT MATERIALS AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT T HE ASSESSING OFFICER HAS DISALLOWED THESE EXPENSES ONLY ON THE BASIS OF ESTI MATED VALUE OF SCRAP AT 10% WITHOUT ANY PROPER FINDING AND ON PROPER BASIS. TH E ADDITION IS MERELY ON A PRESUMPTION BASIS. THEREFORE, THE SAME IS NOT SUSTA INABLE IN EYES OF LAW. THE CIT(A) ALSO HAS OBSERVED THAT THE DISTRICT MAGISTRA TES APPROVAL/SANCTION IS NECESSARY FOR MAKING SALE OF SCRAP. THUS, THE ASSES SING OFFICER AS WELL AS THE CIT(A) WAS NOT CORRECT IN MAKING THE SAID ADDITION ON ACCOUNT OF REPAIR AND MAINTENANCE OF PLANT AND MACHINERY. THE APPEAL OF T HE ASSESSEE BEING ITA NO. 4485/DEL/2016 IS ALLOWED. 8. AS REGARDS TO ITA NO. 4606/DEL/2016, THE FACTS A RE IDENTICAL TO THAT OF ITA NO. 4485/DEL/2016 AND NO DISTINGUISHING FACTS A RE POINTED OUT BY THE LD. DR. HENCE, APPEAL BEING ITA NO. 4606/DEL/2016 IS AL LOWED. 9. IN RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 20 TH DAY OF SEPTEMBER , 2021 SD/- SD/- (PRASHANT MAHARISHI) (SUCH ITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 20/09/2021 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 4 ITA NOS. 4485 & 4606/DEL/2016