HERTZ CHEMICALS LTD, MUMBAI V. DCIT 8(2), MUMBAI

ITA 4809/MUM/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4082 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2010-2011
• Appeal Filed On: 18-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VAEHASPATI TR IPATHI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL,MUMBA I BENCH H, MUMBAI BEFORE SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.4809/MUM/2014 ASSESSMENT YEAR: 2010-11 M/S HERTZ CHEMICAL LTD. 2/3 SARAF KASKAR INDL. ESTATE, S.V. ROAD, JOGESHWARI, MUMBAI-400102. PAN: AAACH2664L VS. DCIT 8(2), MUMBAI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI DARSHAK SHAH (AR) REVENUE BY : SHRI VAEHASPATI TR IPATHI (DR) DATE OF HEARING : 01.02.2016 DATE OF PRONOUNCEMENT : 03.02.2016 O R D E R PER PAWAN SINGH, JM: 1. THE PRESENT APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-17, MUMBAI DATED 22.04.2014 IN RESPECT OF ASSESSMENT YEAR (AY) 2010-11 AGAINST CONFIRMING THE ADHOC ALLOWANCE OF RS. 13,15,950/- BEING 15% OF REPAIRS AND MAINTENANCE EXPENSES. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE F ILED ITS RETURN OF INCOME FOR AY-2010-11 DECLARING TOTAL INCOME OF RS. 20,00,31,170/-. RETUR N OF INCOME WAS SELECTED FOR SCRUTINY AND THE ASSESSING OFFICER (AO) WHILE MAKING THE ADD ITION/DISALLOWANCE, DISALLOWED 15% ON ACCOUNT OF REPAIR AND RENOVATION OUT OF RS. 87.73 LAKHS I.E. TOTAL OF RS. 13,15,950/- IN THE ASSESSMENT ORDER AGAINST WHICH T HE FIRST APPEAL WAS FILED BEFORE THE CIT(A) AND THE SAME WAS DISMISSED, CONFIRMING THE D ISALLOWANCE BY THE CIT(A) IN ITS ORDER DATED 22.04.2014 AGAINST WHICH THE PRESENT AP PEAL IS FILED BEFORE US. 3. WE HAVE HEARD LD. AUTHORISED REPRESENTATIVE (AR) OF THE ASSESSEE AND LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE AN D PERUSED THE MATERIAL AVAILABLE ON RECORD. 2 ITA NO. 4809/M/2014 M/S HERTZ CHEMICAL LTD. 4. THE AR OF THE ASSESSEE HAS ARGUED THAT AO DISALLOWE D 15% OF REPAIR AND RENOVATION EXPENSES ARBITRARILY AND WITHOUT ANY SUBSTANCE WHIC H WAS ULTIMATELY CONFIRMED BY THE CIT(A). 5. WE HAVE PERUSED THE ORDER OF AO, THE ASSESSEE SUBMI TTED THE DETAILS OF REPAIR AND RENOVATION EXPENSES WHICH INCLUDES DEMOLITION AND R EMOVAL OF DAMAGE INTERNAL CEMENT PLASTER ALLOWING CEMENT PLASTER IN THE EXISTING STR UCTURE, LABOUR CHARGES, WATER PROOFING DEMOLITION AND MAKING OF CONCRETE ROAD ALONG WITH I NVOICES OF THE EXPENDITURE AND THE AO WHILE CONSIDERING IT THAT SUBSTANCE OF RENOVATIO N GIVES ENDURING BENEFITS TO THE ASSESSEE AND ACCORDINGLY 15% OF THE AMOUNT WAS DISA LLOWED. 6. THE LD. CIT(A) WHILE DEALING WITH THIS GROUND CONCL UDED THAT NATURE OF SUCH EXPENSES ARE CREATION OF ASSETS OF ENDURING IN NATURE AND BY INCURRING THE SAID EXPENDITURE NEW ASSETS WAS CREATED AND CONFIRMED THE ADDITION. 7. WE HAVE CAREFULLY CONSIDERED THE ORDER OF AUTHORITI ES BELOW AND THE SUBMISSION MADE BY AR OF THE ASSESSEE AND FIND THAT THE ASSESSEE MADE THE REPAIR AND MAINTENANCE EXPENSES IN DAMAN UNIT WHICH IS LOCATED NEARBY SITE CREATING THE SEA WATER AND DUE TO HEAVY AND CONSISTENT RAIN FALL THE EXISTING STRUCTURE AND INT ERNAL WALL OF THE FACTORY DUE TO RUSH MAY BECOME WEAKEN AND REQUIRED PERIODICAL MAINTENANCE A FTER MONSOON SESSION. 8. WE HAVE ALSO SEEN THAT THE ASSESSEE HAS FILED COMPL ETE DETAILS OF WORKS ALONG WITH THE INVOICES AND DETAILS OF EXPENDITURE. THE AO OR THE CIT(A) HAS NOT DISPUTED COST OF SUCH ITEMS OR INVOICES OR THE RATE OF THE ITEM, HENCE, THE DISALLOWANCE MADE AT 15% IS WITHOUT ANY SUBSTANCE AND IS NOT SUSTAINABLE AND TH E SAME IS DELETED. 9. IN THE ABOVE DISCUSSION, THE DISALLOWANCE MADE BY T HE AO AND CONFIRMED BY THE CIT(A) IS SET-ASIDE AND THE APPEAL FILED BY THE ASSESSEE I S ACCEPTED. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 3 RD FEBRUARY, 2016. SD/- SD/- ( B.R.BASKARAN ) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 03/02/2016 S.K.PS 3 ITA NO. 4809/M/2014 M/S HERTZ CHEMICAL LTD. / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / (ASSTT.REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. !'# / GUARD FILE. $ //TRUE COPY/