ACIT (OSD) RG 8(1), MUMBAI V. ENERCON WIND FARMS ( KRISHNA) .LTD, MUMBAI

ITA 4896/MUM/2012

• Counselvise Citation: 489619914 RSA 2012
• Duration Of Justice: 1 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 27-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C SRINIVAS REDDY
• Keywords: Depreciation; Revenue expenditure; Capital expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH E, MUMBAI BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO. 4896/MUM/2012 ASSESSMENT YEAR : 2009-10 DCIT RANGE - 8(1) ROOM NO.260A, 2 ND FLOOR AAYAKAR BHAVAN M.K. ROAD MUMBAI-400 020. VS. M/S. ENERCON WIND FARMS (KRISHNA) LTD. ENERCON TOWER, PLOT NO. A-9 VEERA INDL ESTATE VEERA DESAI ROAD, ANDHERI(W) MUMBAI-400 053. PAN NO.AAACE 3529 M (APPELLANT) (RESPOND ENT) ASSESSEE BY : SHRI NONE REVENUE BY : SHRI C. SRINIVAS REDDY DATE OF HEARING : 11/09/2013 DATE OF PRONOUNCEMENT : 1 7 / 0 9 /2013 O R D E R PER BENCH: THIS IS A REVENUE APPEAL AGAINST THE ORDER OF LD. C IT(A)-16, MUMBAI DATED 28/05/2012 ALLOWING THE COST OF REPAIR S TO THE ROADS AS REVENUE EXPENDITURE. 2. BRIEFLY STATED, ASSESSEE CLAIMED AN AMOUNT OF RS .59,37,500/- UNDER THE HEAD REPAIRS AND MAINTENANCE. AO ASKED FOR INFORMATION AND OBSERVED THAT THE EXPENDITURE IS CAPITAL IN NAT URE. HE, HOWEVER, ALLOWED DEPRECIATION ON THE CAPITAL EXPENDITURE. ITA NO.4896/M/12 A.Y.09-10 2 3. BEFORE LD. CIT(A) IT WAS SUBMITTED THAT THE ASSE SSEE MAINTAINED THE ROADS TO WIND FARMS WHICH ARE IN REMOTE HILLY AREAS OF KARNATAKA AND THE REPAIRS ARE NECESSARY FOR REACHING THE SITE , PARTICULARLY HEAVY RAINS DAMAGE THE PUBLIC ROAD/ROAD LAID DOWN BY PARE NT COMPANY AND THAT EXPENDITURE ITSELF WAS ALLOWED AS REVENUE EXP ENDITURE. 4. CONSIDERING THE CASE LAW RELIED AND EXAMINING TH E FACTS OF THE CASE, THE LD. CIT(A) HELD THAT THE EXPENDITURE DEFI NITELY FALLS IN THE REALM OF REVENUE EXPENDITURE AS IT IS NECESSARY TO INCUR TO CARRY ON ITS BUSINESS SMOOTHLY. IT WAS ALSO HELD THAT THERE IS NO ACCRETI ON TO THE ASSESSEE IN RESPECT OF ANY ASSET, AS ASSET IN QUESTION BELONGS TO THE GOVERNMENT, BEING PUBLIC PROPERTY. 5. AFTER CONSIDERING THE ARGUMENTS OF THE LD. DR, W E ARE OF THE OPINION THAT THERE IS NO MERIT IN REVENUE GROUNDS. OBVIOUSLY, THE EXPENDITURE IS INCURRED ON MAINTAINING THE ROAD TO THE WIND FARMS IN REMOTE AREAS AND NO NEW ASSET CAME INTO EXISTENCE. HAVING REGARD TO THE PRINCIPLES LAID DOWN BY THE HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. UDAIPUR MINERAL DEVELOPMENT SYNDICATE (P) L TD. (203 ITR 0556) , WHICH WAS RELIED ON BY THE LD. CIT(A), THE EXPENDIT URE FOR REPAIRS IN RESPECT OF ROAD IS REVENUE IN NATURE. REVENUE GROUN DS ARE DISMISSED. AO IS DIRECTED TO WITHDRAW THE DEPRECIATION ALLOWED, I F NOT WITH DRAWN. 6. IN THE RESULT, REVENUE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH SEPTEMBER, 2013. SD/- SD/- (SANJAY GARG ) JUDICIAL MEMBER (B. RAMAKOTAIAH ) ACCOUNTANT MEMBER MUMBAI, DATED: 17/09/2013. JV. ITA NO.4896/M/12 A.Y.09-10 3 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.