KARAMTRARA ENGINEERING P. LTD, MUMBAI V. ACIT 8(3) (OSD), MUMBAI

ITA 5845/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 55786 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Assessment Year: 2007-2008
• Appeal Filed On: 21-07-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: R S CHOKKRI
• Keywords: Opportunity of being heard
• Section: 37

Judgement Text

1 KARAMTARA ENGG PVT LTD IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI H BENCH MUMBAI BENCHES, MUMBAI BEFORE SHRI PRAMOD KUMAR, AM & SHRI VIJAY PAL RAO, JM ITA NO.5845/MUM/2010 (ASST YEAR 2007-08 ) KARAMTARA ENGG PVT LTD 117 MORYA ESTATE OSHIWARA LINK ROAD -ANDHERI (E) MUMBAI 53 VS THE ASST COMMR OF INCOME TAX 8(3), (OSD), MUMBAI (APPELLANT) (RESPONDENT) PAN NO. AABCK1921E ASSESSEE BY SHRI R S CHOKKRI REVENUE BY SH V V SHASTRI DT.OF HEARING 20 TH OCT 2011 DT OF PRONOUNCEMENT 28TH OCT 2011 PER VIJAY PAL RAO, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 22.4.2010 OF THE CIT(A) FOR THE AY 2007-08. 2 THE ASSESSEE HAS RAISED THE ONLY EFFECTIVE GROUND AS UNDER: THE LD CIT(A) HAS ERRED IN DIRECTING THE ASSESSING OFFICER TO DISALLOW REPAIRS AND MAINTENANCE EXPENSES IN EXCESS OF RS. 2 LACS BE ING CAPITAL IN NATURE AND TO ALLOW DEPRECATION @ 10% ON THE AFORESAID EXPENSE . AS THE REPAIR & MAINTENANCE EXPENSE OF RS. 24,38,809/- IS CORRECTLY CLAIMED BY THE ASSESSEE THE SAME NEEDS TO BE ALLOWED. 3 WE HAVE HEARD THE LD AR OF THE ASSESSEE AS WELL A S THE LD DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET, WE NOTE THAT THIS VERY ISSUE HAS BEEN CONSIDERED AND DECIDED BY THE TRIBUNAL IN ASSESSEE S OWN CASE FOR THE AY 2006-07 IN ITA NO.743/MUM/2010 VIDE ORDER DATED 8.10.2010 IN P ARAS 5 & 6 AS UNDER: 5 AFTER HEARING BOTH THE PARTIES, WE FIND THE TRIBUN AL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2005-06 HAS HELD AS UNDER: WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE 2 KARAMTARA ENGG PVT LTD RECORD. IN LIGHT OF PRINCIPLES LAID DOWN BY THE APEX COURT IN THE CIT VS SARAVANA SPINNING MILLS P LTD 293 ITR 201 IF AN EX PENDITURE IS INCURRED TO PRESERVE AND MAINTENANCE AN ALREADY EXISTING AND I F IT IS PROVED THAT THE OBJECT IS NOT TO BRING A NEW ASSET INTO EX ISTENCE OR TO OBTAIN A NEW ADVANTAGE, SUCH EXPENDITURE CAN BE TREATED AS REV ENUE IN NATURE. IT IS NOT CLEAR AS TO WHETHER ASSESSEE CLAIM ED DEDUCTION U/S 30 TO 37 OF THE I T ACT. FIRST APPELLATE AUTHORITY HAS ALSO N OT PROPERLY EXAMINED THE ISSUE BY APPLYING THE CORRECT LEGAL PRIN CIPLES. THEREFORE, IN THE INTEREST OF JUSTICE THE ISSUE IS SET ASIDE TO THE FILE OF THE ASSESSING OFFICER WHO IS DIRECTED TO REEXAMINE THE CLAIM IN ACC ORDANCE WITH LAW AFTER GIVING ASSESSEE A REASONABLE OPPORTUNITY OF BE ING HEARD. NEEDLESS TO OBSERVE THAT WITH REGARD TO A CLAIM OF DE DUCTION THE INITIAL ONUS IS UPON THE ASSESSEE TO PROVE THAT EXPENDITURE IS OF REVENUE CHARACTER. 6 RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUN AL IN ASSESSEES OWN CASE IN THE IMMEDIATELY PRECEDING YEAR WE RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION. THE ASSESS ING OFFICER SHALL DECIDE THE ISSUE AFTER GIVING DUE OPPORTUNITY OF BEING HEARD T O THE ASSESSEE. WE HOLD AND DIRECT ACCORDINGLY . 4 SINCE THE ISSUE HAS ALREADY BEEN REMANDED TO THE RECORD OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION IN THE LIGHT OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF SARAVANA SPINNING MILLS P LTD (SUPRA); THEREFORE, FOLLOWING THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE, WE RE MAND THIS ISSUE TO THE RECORD OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION. HOWE VER, WE MAKE IT CLEAR THAT THE ASSESSING OFFICER SHOULD DECIDE THE ISSUE AS PER TH E LATEST DECISION OF THE HONBLE SUPREME COURT, AND IN ACCORDANCE WITH LAW. 4 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE I S ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON THE 28 TH , DAY OF OCT 2011. SD/ SD/- (PRAMOD KUMAR ) ACCOUNTANT MEMBER ( VIJAY PAL RAO ) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 28 TH , OCT2011 RAJ* 3 KARAMTARA ENGG PVT LTD COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI