HINDUSTAN HARDY SPICER LTD, MUMBAI V. ASST CIT 6(3), MUMBAI

ITA 5945/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3589 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 24-05-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 22-09-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: SAMEER G DALAL
• Keywords: Revenue expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL H, BENCH MUM BAI BEFORE SHRI B.R. BASKARAN, AM AND SHRI C.N. PRASAD, JM ITA NO.5945/MUM/2014 (ASSESSMENT YEAR: 2005-06) M/S. HINDUSTAN HARDY SPICER LIMITED DHANWATY BLDG., PLOT NO.80, DR. ANNIE BESANT ROAD, WORLI MUMBAI-400 018. VS. ASSTT. COMMISSIONER OF INCOME TAX-6(3), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400 020. PAN: AAACX0022G APPELLANT .. RESPONDENT APPELLANT BY SHRI SAMEER G. DALAL RESPONDENT BY SHRI SATYA PAL KUMAR DATE OF HEARING 24-05-2016 DATE OF PRONOUNCEMENT 31.05.2016 O R D E R PER C.N.PRASAD, JM : THE PRESENT APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX-12, MUMBAI DATED 01-07-2 014 FOR ASSESSMENT YEAR 2005-06. 2. THE FIRST ISSUE IN APPEAL OF THE ASSESSEE IS THA T THE LD. CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO RE-COMPUTE TH E ADJUSTMENT OF MODVAT CREDIT UNDER SECTION 145A OF THE INCOME TAX ACT,196 1. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT REGARDING VAL UATION OF CLOSING STOCK, THE ASSESSEE HAS PRODUCED ALL THE DETAILS BE FORE THE CIT(A) AND IN SPITE OF ALL THOSE DETAILS THE CIT(A) DIRECTED THE AO TO VALUE THE CLOSING STOCK AND GIVE CREDIT FOR THE SAME AS OPENING STOCK . LD. COUNSEL SUBMITS THAT IN PRINCIPLE THERE IS NO QUARREL AS FAR AS THE DECISION OF THE CIT(A) BUT ITA NO.5945/MUM/2014 M/S. HINDUSTAN HARDY SPICER LTD. VS. ACIT 2 HE SUBMITS THAT A DIRECTION MAY BE GIVEN TO THE AO TO PASS APPROPRIATE ORDERS AS EARLY AS POSSIBLE. 3. WITH RESPECT TO THE SECOND ISSUE THAT IS IN CONF IRMING THE DISALLOWANCE OF EXPENDITURE INCURRED TO REPAIRS BY THE ASSESSEE TREATING THE SAME AS CAPITAL IN NATURE, LD. COUNSEL SUBMITS THAT ASSESSEE HAS CARRIED OUT REPAIRS/MODIFICATION IN THE EXISTING NA SIK FACTORY. HE SUBMITS THAT EXPENDITURE WAS INCURRED BY THE ASSESSEE TO PR ESERVE ITS FACTORY BUILDING AND THERE WAS NEITHER ANY EXTENSION, NOR I NCREASE IN THE CAPACITY OF THE BUILDING. THEREFORE, SUCH REPAIRS ARE ONLY C URRENT REPAIRS AND SHOULD BE ALLOWED AS REVENUE EXPENDITURE. BEFORE US LD. COUNSEL SUBMITTED THE NATURE OF EXPENDITURE INCURRED BY THE ASSESSEE BY WAY OF CERTIFICATE DATED 30/09/2008 ISSUED BY OAK & ASSOCI ATES, ARCHITECT AND INTERIOR DESIGNER CERTIFYING THE DESCRIPTION OF WOR K AND NATURE OF WORK DONE BY THEM. IT IS THE SUBMISSION OF THE LD. COUNS EL THAT THIS CERTIFICATE IS NOT PLACED BEFORE THE LOWER AUTHORITIES AND IT IS P RODUCED ON THE DIRECTIONS OF THE TRIBUNAL, SINCE HONBLE BENCH FELT THAT THE NATURE OF WORK AND DESCRIPTION OF WORK CARRIED OUT BY THE ASSESSEE WAS NOT SPECIFIED IN THE ORDERS PASSED BY AO/CIT(A). ON A QUERY FROM THE BEN CH TO THE LD. DR AS TO WHY THIS ISSUE SHOULD NOT BE SENT BACK TO THE AO FOR FRESH ADJUDICATION IN VIEW OF THE FACT THAT DESCRIPTION OF WORK AND NA TURE OF WORK IS TO BE VERIFIED BY THE ASSESSING OFFICER, THE LD. DR HAS N OT EXPRESSED SERIOUS OBJECTIONS FOR SENDING BACK THE MATTER TO THE ASSES SING OFFICER. ITA NO.5945/MUM/2014 M/S. HINDUSTAN HARDY SPICER LTD. VS. ACIT 3 4. ON HEARING BOTH THE PARTIES, WE HOLD THAT THE DI RECTION GIVEN BY THE CIT(A) IN RESPECT OF VALUATION OF CLOSING STOCK IS IN ORDER SINCE THE CIT(A) DIRECTED THE AO TO EXAMINE THE ASSESSEES PLEA HAVI NG REGARD TO THE DIRECTIONS OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE ON EARLIER OCCASION, KEEPING IN VIEW THE DECISION O F THE BOMBAY HIGH COURT IN THE CASE OF MAHALAXMI GLASS WORKS PRIVATE LIMITED AND AT THE SAME TIME IT WAS HELD THAT THE ASSESSEE IS DUTY BOU ND TO SUBMIT NECESSARY PARTICULARS TO THE ASSESSING OFFICER SO A S TO ENABLE HIM TO FIND OUT THE MODVAT/CENVAT CREDIT COMPONENT IN THE OPENI NG STOCK, PURCHASES, SALES AND CLOSING STOCK FOR BOTH THE YEA RS I.E. A.Y.2005-06 AS WELL AS A.Y.2004-05 BEFORE THE ASSESSING OFFICER TO RECOMPUTE THE ADJUSTMENT U/S 145A AS PER THE FINDINGS OF THE HON BLE TRIBUNAL. THUS, WE HOLD THAT THERE IS NO INFIRMITY IN THE DIRECTIONS O F THE CIT(A). HOWEVER, WE DIRECT THE AO TO PASS APPROPRIATE ORDERS AS EXPEDIT IOUSLY AS POSSIBLE GIVING EFFECT TO THIS ORDER. 5. IN SO FAR AS SECOND ISSUE IS CONCERNED THAT IS E XPENDITURE INCURRED TOWARDS REPAIRS TO FACTORY BUILDING, WE RESTORE THI S ISSUE TO THE FILE OF THE ASSESSING OFFICER WHO SHALL CONSIDER THE DESCRIPTIO N OF THE WORK AND NATURE OF THE WORK DONE BY THE ASSESSEE AND DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING ADEQUATE OPPORT UNITY OF BEING HEARD TO THE ASSESSEE. ITA NO.5945/MUM/2014 M/S. HINDUSTAN HARDY SPICER LTD. VS. ACIT 4 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31 /05/2016. SD/- SD/- ( B.R. BASKARAN ) ( C.N. PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI , DATED 31/05/2016 ASHWINI/ ASHWINI/ ASHWINI/ ASHWINI/PS PSPS PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ASSISTANT 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//