ACIT 10(1), MUMBAI V. STARLIGHT SYSTEMS P.LD, MUMBAI

ITA 4722/MUM/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70874 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 16-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S P GOYAL
• Keywords: Depreciation; Capital expenditure

Judgement Text

E IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI .. , !'# $ $ $ $ %&. !.'.. $( ) !'# !* BEFORE SHRI P.M. JAGTAP, AM AND DR. S.T.M. PAVALAN, JM !./ I.T.A. NO. 4722 /MUM/2012 ( )( , $-, )( , $-, )( , $-, )( , $-, / / / / ASSESSMENT YEAR : 200910) DY. COMMISSIONER OF INCOME TAX 10(1), 455, AAYAKAR BHAVAN, 4 TH FLOOR, M.K. ROAD, MUMBAI 400 020. ( ( ( ( / VS. M/S STARLIGHT SYSTEMS PVT. LTD., 9 TH FLOOR, HOUSEFIN BHAVAN, C-21, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI 400 051 #. !./ PAN : AAFCS7733L ( ./ / // / APPELLANT ) .. ( 01./ / RESPONDENT ) ./ 2 3 ! / APPELLANT BY : SHRI SHISHIR SRIVASTAVA 01./ 2 3 ! / RESPONDENT BY : SHRI S.P. GOYAL !($ 2 / // / DATE OF HEARING : 22-08-13 45- 2 / DATE OF PRONOUNCEMENT : 30-08-13 '6 / O R D E R PER P.M. JAGTAP, A.M. : .. , !'# THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER PASSED OF THE LD. CIT(A) -21, MUMBAI DATED 19-4-2012 WHEREBY HE D ELETED THE DISALLOWANCE MADE BY THE A.O. BY TREATING THE REPAIRS AND MAINTE NANCE EXPENDITURE INCURRED BY THE ASSESSEE ON FURNITURE AND FIXTURES AMOUNTING TO RS. 12,32,113/- AS CAPITAL EXPENDITURE. ITA 4722/M/12 2 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY WH ICH IS ENGAGED INN THE BUSINESS OF RUNNING BUSINESS CENTRE. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY IT ON 29-09-2009 DECLARI NG TOTAL INCOME OF RS. 2,62,61,626/-. IN THE PROFIT AND LOSS FILED ALONG WITH THE SAID RETURN, REPAIRS AND MAINTENANCE EXPENSES FOR FURNITURE ETC. WERE DE BITED BY THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE RE PAIRS AND MAINTENANCE EXPENSES INCURRED BY THE ASSESSEE WERE EXAMINED BY THE A.O. AND ON SUCH EXAMINATION, HE FOUND THAT THE EXPENDITURE ON REPAI RS AND MAINTENANCE TO THE EXTENT OF RS. 13,69,014/- WAS INCURRED BY THE A SSESSEE ON PURCHASE OF PLAIN FABRIC AND LABOUR CHARGES PAID. ACCORDING TO HIM, SUCH HUGE EXPENDITURE INCURRED BY THE ASSESSEE WAS NOT ALLOWA BLE AS DEDUCTION AS CURRENT REPAIRS AND CAPITALIZING THE SAME, HE ALLOW ED ONLY DEPRECIATION @ 10% WHICH RESULTED IN A DISALLOWANCE OF RS. 12,56,1 13/-. ON APPEAL, THE LD. CIT(A) DELETED THE SAID DISALLOWANCE HOLDING THAT T HE ENTIRE EXPENDITURE INCURRED ON REPAIRS AND MAINTENANCE WAS ALLOWABLE A S DEDUCTION BEING REVENUE IN NATURE KEEPING IN VIEW THE NATURE OF ASS ESSEES BUSINESS WHICH REQUIRED RENEWAL OF EXISTING FURNITURE AND FIXTURES AS PER REQUIREMENT OF THE CLIENTS. FOR THIS CONCLUSION, THE LD. CIT(A) ALSO RELIED ON HIS APPELLATE ORDER IN ASSESSEES OWN CASE FOR A.Y. 2008-09 WHEREIN A SIMI LAR CLAIM OF THE ASSESSEE FOR DEDUCTION ON ACCOUNT OF REPAIRS AND MAINTENANCE EXPENDITURE WAS ALLOWED. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE REVENUE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSER VED THAT A SIMILAR ISSUE HAS BEEN DECIDED BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2008-09 VIDE ITS ORDER DATED 17 TH MAY, 2013 PASSED IN ITA NO. 5675/M/2011 WHEREIN TH E ORDER OF THE LD. CIT(A) ALLOWING THE CLAIM OF THE A SSESSEE FOR DEDUCTION ON ACCOUNT OF REPAIRS AND MAINTENANCE EXPENDITURE WAS UPHELD BY THE TRIBUNAL FOR THE FOLLOWING REASONS GIVEN IN PARA NO. 5 OF IT S ORDER:- ITA 4722/M/12 3 WE HAVE CONSIDERED SUBMISSIONS OF LD. REPRESENTATI VES OF PARTIES AND HAVE PERUSED ORDERS OF AUTHORITIES BELOW. WE HAVE ALSO GONE THROUGH THE DECISION OF ITAT IN THE CASE OF SATGURU INFOCOR P SERVICES P. LTD. (SUPRA) AS WELL AS ORDER OF LD. CIT(A) IN ASSESSEE S OWN CASE FOR ASSESSMENT YEAR 2007-08. WE OBSERVE THAT ON IDENTI CAL FACTS IN THE CASE OF ASSESSEES SISTER CONCERN (SUPRA), THE COOR DINATE BENCH UPHELD THE ORDER OF LD. CIT(A) TREATING THE EXPENDITURE AS REVENUE IN NATURE. WE ALSO OBSERVE THAT AGAINST THE ORDER OF LD. CIT(A ) FOR ASSESSMENT YEAR 2007-08 ON SIMILAR FACTS & ISSUE, DEPARTMENT HAD NO T FILED ANY APPEAL BEFORE THE TRIBUNAL. THE HONBLE RAJASTHAN HIGH CO URT IN THE CASE OF CIT VS. A.M. SINGHVI, 302 ITR 26 (RAJ.) HAS HELD TH AT EVEN IF THE SUBSTANTIAL AMOUNT SPENT ON REPAIRS AND RENOVATION OF OFFICE PREMISES TAKEN ON RENT, IT IS TO BE ALLOWED AS REVENUE EXPEN DITURE BECAUSE NO CAPITAL IS ACQUIRED BY THE ASSESSEE. IN VIEW OF TH IS, WE HOLD THAT THERE IS NO INFIRMITY IN THE ORDER OF LD. CIT(A). ACCORD INGLY, WE UPHOLD THE SAME BY REJECTING THE GROUND OF APPEAL TAKEN BY DEP ARTMENT. 4. AS THE ISSUE INVOLVED IN THE YEAR UNDER CONSIDE RATION AS WELL AS ALL THE MATERIAL FACTS RELEVANT THERETO ARE SIMILAR TO A.Y. 2008-09, WE RESPECTFULLY FOLLOW THE ORDER OF THE CO-ORDINATE BENCH OF THIS T RIBUNAL FOR A.Y. 2008-09 AND UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(A) DEL ETING THE DISALLOWANCE MADE BY THE A.O. OUT OF REPAIRS AND MAINTENANCE EXP ENDITURE ON FURNITURE AND FIXTURES. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH AUG. 2013. . '6 2 45- 7'(8 30-8-13 5 2 SD/- SD/- (DR. S.T.M. PAVALAN) (P.M. JAGTAP ) ) !'# JUDICIAL MEMBER !'# / ACCOUNTANT MEMBER MUMBAI ; 7'( DATED 30-8-13 $.)(.!./ RK , SR. PS ITA 4722/M/12 4 '6 2 0)9: ;:- '6 2 0)9: ;:- '6 2 0)9: ;:- '6 2 0)9: ;:-/ COPY OF THE ORDER FORWARDED TO : 1. ./ / THE APPELLANT 2. 01./ / THE RESPONDENT. 3. < () / THE CIT(A)- 21, MUMBAI 4. < / CIT - MC - X MUMBAI 5. :$? 0))( , , / DR, ITAT, MUMBAI E BENCH 6. %, @ / GUARD FILE. '6(! '6(! '6(! '6(! / BY ORDER, !1: 0) //TRUE COPY// A A A A/ // /!B !B !B !B ( DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI