DCIT, New Delhi V. M/s. Rai Bahadur Narain Singh Sugar Mills Ltd., New Delhi

ITA 6717/DEL/2014

• Counselvise Citation: 671720114 RSA 2014
• Duration Of Justice: 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC 2
• Next Hearing Date: 14-07-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 10-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANOJ KUMAR CHOPRA
• Keywords: Depreciation
• Section: 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : SMC NEW DELHI BEFORE SHRI J.SUDHAKAR REDDY ACCOUNTANT MEMBER ITA NO: 6717/DEL/2014 ASSTT. YEARS : - 2011-12 DCIT VS. RAI BAHAD UR NARAIN SINGH SUGAR MILLS LTD. CIRCLE-2(1), PLOT NO. 5, B-BLOCK, MIDDLE CIRCLE, NEW DELHI. OPP. INDR A PALACE BUILDING, CONN AUGHT PLACE, NEW DELHI. (PAN AAACR0924M) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MANOJ KUMAR CHOPRA, SR. DR RESPONDENT BY :SHRI M.P. RASTOGI, ADVOCATE DATE OF HEARING :14.7.2015 DATE OF PRONOUNCEMENT :17. 7 2015 O R D E R PER J.SUDHAKAR REDDY, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE DIR ECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) DATED 17.9.20 14 FOR THE ASSESSMENT YEAR 2011-12 ON THE FOLLOWING GROUNDS :- 1. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE, T HE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS. 1,45,985/- ON A CCOUNT OF MOLASSES RESERVE FUND BY IGNORING THE FACT THAT MOLASSES RES ERVE FUND IS IN THE NATURE OF PROVISION AND IT IS NOT AN ACTUAL LIABILI TY AND PROVISION FOR CONTINGENT LIABILITY IS NOT ALLOWABLE AS DEDUCTION. 2. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE, TH E LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS. 8,13,912/- TREA TING THE CAPITAL SUBSIDY RECEIVED FROM CENTRAL GOVERNMENT AS REVENUE RECEIPT BY IGNORING THE FACT THAT INTEREST WAS NEITHER ACTUALLY INCURRED NOR WAS THERE ANY LIABILITY ON THE ASSESSEE TO INCUR THE SAME. ITA NO. 6717/DEL/2014 DCIT VS. RAI BAHADUR NARAI N SINGH SUGAR MILLS LTD. 2 3. ON THE FACTS & IN THE CIRCUMSTANCE OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS. 5,60,973/- ON AC COUNT OF DEPRECIATION ON DISCARDED ASSETS U/S 32 OF THE INCOME-TAX ACT, 1961 . 2 . WE HAVE HEARD SHRI MANOJ KUMAR CHOPRA, SR . DR ON BEHALF OF THE REVENUE AND SHRI M.P. RASTOGI ON BEHALF OF THE ASSESSEE. 3. ON A CAREFUL CONSIDERATION OF THE FACTS A ND CIRCUMSTANCES OF THE CASE AND A PERUSAL OF THE PAPERS ON RECORD AND THE ORDERS OF T HE AUTHORITIES BELOW WE HOLD AS FOLLOWS :- 4. GROUND NO. 1 IS ON THE DELETION OF DISALLOW ANCE OF RS. 1,45,985/- ON ACCOUNT OF MOLASSES RESERVE FUND . AT PAGE 19 PARA 8 THE FIRST APPELLATE AUTHORITY FOLLOWED THE ORDER OF THE COORDINATE BENCH OF THE TRIBUNAL I N THE ASSESSEES OWN CASE FOR THE ASSTT. YEAR 1995-96 AND ALLOWED THE CLAIM OF THE AS SESSE. WE FIND NO INFIRMITY IN THE SAME. THUS THIS GROUND OF THE REVENUE IS DISMISSED. 5. GROUND NO. 2 IS ON THE DELETION OF DISALLOW ANCE OF RS. 8,13,912/-. THE FIRST APPELLATE AUTHORITY AT PAGE 20 PARA 10 CONSIDERED T HIS ISSUE. HE FOLLOWED THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 1990-91 AND ALLOWED THE CLAIM OF TH E ASSESSEE. WE ALSO OBSERVED THAT THE DECISION OF THE TRIBUNAL WAS UPHELD BY THE JURISDICTIONAL HIGH COURT . HENCE WE DISMISS THIS GROUND OF THE REVENUE. 6. GROUND NO. 3 IS THE DELETION OF RS. 5,6 0,973/- ON ACCOUNT OF DEPRECIATION ON DISCARDED ASSETS U/S 32 OF THE INCOME TAX ACT, 1 961. LD. FIRST APPELLATE AUTHORITY APPLIED THE JUDGMENT OF THE JURISDICTIONAL HIGH COU RT IN THE CASE OF CIT VS. OSWAL AGROMILLS LTD. 341 ITR 467 AND IN THE CASE OF CIT V S. YAMAHA MOTORS INDIA PVT. LTD. 328 ITR 297 AND ALLOWED THE CLAIM OF THE ASSESSEE. NO CONTRARY DECISIONS ARE ITA NO. 6717/DEL/2014 DCIT VS. RAI BAHADUR NARAI N SINGH SUGAR MILLS LTD. 3 BROUGHT TO OUR NOTICE BY THE LD. DR. UNDER THESE CI RCUMSTANCES WE UPHOLD THE ORDER OF THE FIRST APPELLATE AUTHORITY AND DISMISS THIS G ROUND OF THE APPEAL. 7. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH JULY, 2015. SD/- (J. SUDHAKAR REDDY) ACCOUNTANT MEMBER DATED: THE 17 TH JULY, 2015 VEENA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER DY. REGISTRAR SL. NO. DESCRIPTION DATE 1. DATE OF DICTATION BY THE AUTHOR 14.7.2015 2. DRAFT PLACED BEFORE THE DICTATING MEMBER 16.7.2 015 3. DRAFT PLACED BEFORE THE SECOND MEMBER 4. DRAFT APPROVED BY THE SECOND MEMBER 5. DATE OF APPROVED ORDER COMES TO THE SR. PS 6. DATE OF PRONOUNCEMENT OF ORDER 7. DATE OF FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER