ASST CIT 10(1), MUMBAI V. STARLIGHT SYSTEMS P.LTD, MUMBAI

ITA 5675/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3386 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 15-05-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 08-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Revenue expenditure

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, M UMBAI BEFORE S/SHRI B.R.MITTAL,(JM) AND D.KARUNAKAR RAO ( AM) . . , . ! , '# '# '# '# ' '' ' $ $ $ $ ./I.T.A. NO. 5675/M/2011 ( & ' / ASSESSMENT YEAR:2008-09) ACIT 10(1), 455, AAYAKAR BHAVAN, M.K. MARG, MUMBAI. & & & & / VS. STARLIGHT SYSTEMS P. LTD., 9 TH FLOOR, HOUSEFIN BHAVAN, C- 231, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI-51 ( '# ./ )* ./PAN/GIR NO. : AAFCS 7733 L ( (+ / APPELLANT) .. ( ,-(+ / RESPONDENT) (+ . ' / APPELLANT BY : SHRI MANOJ KUMAR ,-(+ / . ' /RESPONDENT BY: SHRI RAKESH JOSHI & / 0# / DATE OF HEARING : 15.5.2013 12' / 0# /DATE OF PRONOUNCEMENT : 17.5.2013 '3 / O R D E R PER B.R.MITTAL, JM: THE DEPARTMENT HAS FILED THIS APPEAL FOR ASSESSMEN T YEAR 2008-09 AGAINST ORDER DATED 18.5.2011 OF LD CIT(A) -1, MUMBAI ON THE FOL LOWING GROUND: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, LD CIT(A) ERRED IN DELETING THE DISALLOWANCE IN RESPEC T OF REPAIRS & MAINTENANCE OF RS.35,14,834/- IGNORING THE FACT THA T THE EXPENDITURE WAS INCURRED FOR BRINGING INTO EXISTENCE AN ASSET OF EN DURING BENEFIT IN THE NATURE OF FURNITURE. 2. THE RELEVANT FACTS ARE THAT THE ASSESSEE IS A DO MESTIC PRIVATE LIMITED, ENGAGED IN THE BUSINESS OF RUNNING A BUSINESS CENTRE AND REAL ESTATE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTIC ED THAT ASSESSEE HAS MADE PAYMENT TO M/S. M.A. FRAME WORKS, M/S. A.K. WOOD INDUSTRIES , AND M.A. WOOD PRODUCTS PVT LTD., OF AMOUNTING TO RS.9,61,081/-, RS.8,41,214/- AND RS .11,43,112/-, RESPECTIVELY TOWARDS I.T.A. NO. 5675M/2011 ASSESSMENT YEAR:2008-09 2 PURCHASE OF PLY AND WOODS. THE AO HAS STATED THAT ASSESSEE HAS MADE LABOUR CHARGES OF RS.9,59,964/- AND SUCH HUGE EXPENSES CANNOT BE C ONSIDERED AS EXPENDED FOR CURRENT REPAIR. THUS, AO STATED THAT THE AGGREGATE SUM OF RS.39,05,371 IS CAPITALIZED WITH THE BLOCK OF FURNITURE AND FIXTURES. HE ACCORDINGLY A LLOWED @ 10% DEPRECIATION AND WORKED OUT DISALLOWANCE OF RS.35,14,834/-. BEING A GGRIEVED, ASSESSEE FILED APPEAL BEFORE LD CIT(A). 3. LD CIT(A) FOLLOWING HIS OWN DECISION FOR ASSESSM ENT YEAR 2007-08 IN ASSESSEES OWN CASE, DELETED THE DISALLOWANCE. HENCE, THIS AP PEAL BEFORE THE TRIBUNAL. 4. LD D.R. RELIED ON ORDER OF ASSESSING OFFICER AND WHEREAS LD A.R. SUBMITTED THAT IN ASSESSMENT YEAR 2007-08, AO DISALLOWED REPAIR AN D MAINTENANCE EXPENSES BUT LD CIT(A) ALLOWED THE SAME CONSIDERING THE EXPENSES AS REVENUE IN NATURE. HE SUBMITTED THAT NO FURTHER APPEAL HAS BEEN FILED BY THE DEPART MENT. HE FURTHER REFERRED PAGE 32 OF PB AND SUBMITTED THAT ASSESSEE ITSELF APPORTIONED T HE EXPENSES INTO REVENUE AND CAPITAL AND ONLY CLAIMED THE EXPENSES WHICH IS REVENUE IN N ATURE. HE SUBMITTED THAT THE FACTS IN ASSESSMENT YEAR UNDER CONSIDERATION ARE SIMILAR TO ASSESSMENT YEAR 2007-08 AND THE ORDER OF LD CIT(A) BE CONFIRMED. HE FURTHER SUBMIT TED THAT ON IDENTICAL FACTS, SIMILAR ISSUE AROSE IN THE CASE OF SISTER CONCERN OF THE AS SESSEE IN I.T.A. NO.6060/M/2010 A.Y. 2007-08 IN THE CASE OF DCIT VS. M/S. SATGURU INFOCO RP SERVICES PVT LTD. ORDER DATED 29.12.2011 AND THE TRIBUNAL CONFIRMED THE ORDER OF LD CIT(A) BY REJECTING APPEAL OF THE DEPARTMENT, COPY OF WHICH IS PLACED AT PAGES 7 TO 1 1 OF PB. 5. WE HAVE CONSIDERED SUBMISSIONS OF LD REPRESENTAT IVES OF PARTIES AND HAVE PERUSED ORDERS OF AUTHORITIES BELOW. WE HAVE ALSO GONE THROUGH THE DECISION OF ITAT IN THE CASE OF SATGURU INFOCORP SERVICES P. LTD (SU PRA) AS WELL AS ORDER OF LD CIT(A) IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2007-08. W E OBSERVE THAT ON IDENTICAL FACTS IN THE CASE OF ASSESSEES SISTER CONCERN (SUPRA), THE COORDINATE BENCH UPHELD THE ORDER OF LD CIT(A) TREATING THE EXPENDITURE AS REVENUE IN NA TURE. WE ALSO OBSERVE THAT AGAINST THE ORDER OF LD CIT(A) FOR ASSESSMENT YEAR 2007-08 ON SIMILAR FACTS & ISSUE, DEPARTMENT HAD NOT FILED ANY APPEAL BEFORE THE TRIBUNAL. THE H ONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. A.M.SINGHVI, 302 ITR 26 (RAJ) HAS H ELD THAT EVEN IF THE SUBSTANTIAL I.T.A. NO. 5675M/2011 ASSESSMENT YEAR:2008-09 3 AMOUNT IS SPENT ON REPAIRS AND RENOVATION OF OFFICE PREMISES TAKEN ON RENT, IT IS TO BE ALLOWED AS REVENUE EXPENDITURE BECAUSE NO CAPITAL I S ACQUIRED BY THE ASSESSEE. IN VIEW OF THIS, WE HOLD THAT THERE IS NO INFIRMITY IN THE ORDER OF LD CIT(A). ACCORDINGLY, WE UPHOLD THE SAME BY REJECTING THE GROUND OF APPEAL T AKEN BY DEPARTMENT. 6. IN THE RESULT, APPEAL FILED BY REVENUE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH MAY , 2013 . '3 / 12' #' 4 5&6 17 TH MAY , 2013 2 / 7 SD/- SD/- ( . ! /D.KARUNAKAR RAO ) ( . . /B.R.MITTAL) '# / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; 5& DATED 17 / 05/2012 . & . ./ PARIDA , SR. PS '3 '3 '3 '3 / // / ,0A ,0A ,0A ,0A B'A'0 B'A'0 B'A'0 B'A'0 / COPY OF THE ORDER FORWARDED TO : 1. (+ / THE APPELLANT 2. ,-(+ / THE RESPONDENT. 3. C ( ) / THE CIT(A)- 4. C / CIT 5. AD7 ,0& , , / DR, ITAT, MUMBAI 6. 7 E / GUARD FILE. '3& / BY ORDER, -A0 -A0 -A0 -A0 ,0 ,0,0 ,0 //TRUE COPY// F ) (ASSTT. REGISTRAR) , / ITAT, MUMBAI