M/s. A.N.R. Motors P.Ltd, Jalandhar V. The Joint Commissioner of Income-tax, Jalandhar

ITA 677/ASR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0790 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 09-05-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 10-11-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMALENDU NATH MISHRA
• Assessee Lawyers: J S BHASIN
• Keywords: Capital asset; Depreciation; Non compliance; Assessment record; Reassessment proceedings; Capital expenditure
• Section: 133(6); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER [ I.T.A NO.677(ASR)/2014 ASSESSMENT YEAR: 2010-11 M/S. A.N.R. MOTORS (P) LTD., PARAGPUR, G. T. ROAD, JALANDHAR. PAN:AACCA9957F VS. JCIT, CIRCLE-IV, JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. J.S.BHASIN (ADV.) RESPONDENT BY: SH. AMALENDU NATH MISHRA ( DR.) DATE OF HEARING: 09.05. 2016 DATE OF PRONO UNCEMENT: 11.05.2016 ORDER PER T. S. KAPOOR (AM): THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE OR DER OF LEARNED CIT(A), DATED 03.09.2014, FOR ASST. YEAR 2010-11. 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPE AL. (I). THAT IN THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE ID.CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE ADDITION OF RS.2,50 ,779/-, AS MADE BY LD. AO BY INVOKING SECTION 40(A)(IA), FOR THE AL LEGED NON DEDUCTION OF TAX AT SOURCE ON PAYMENT OF COMPUTER SOFTWARE EX PENDITURE, MADE TO M/S. TOYOTA KIRLOSKAR MOTORS LTD. (II). THAT BY ANY RECKONING, SINCE THE SAID PAYEE M/S TOYOTA KIRLOSKAR MOTORS LTD WAS REGULAR INCOME TAX ASSESSEE AND DULY DISCHARGED ITS TAX LIABILITY ON AMOUNT RECEIVED FROM ASSESSEE, NO DEFAULT OF TDS COULD BE ALLEGED WARRANTING DISALLOWANCE U/S.40(A)( IA). (III). THAT THE ID. CIT(A) WAS NOT JUSTIFIED IN CO NFIRMING THE ADDITION OF RS.10 LACS AS MADE BY LD. AO, FOR THE ALLEGED SALE OF SALVAGE, ON HIGHLY ERRONEOUS AND ,INSUFFICIENT GROUNDS. ITA NO.677 (ASR)/2014 ASST. YEAR: 2010-11 2 (IV) THAT FURTHER ADDITION OF RS. 1,00,000/-, AS MADE BY THE ID. AO FOR THE ALLEGED UNACCOUNTED SALE OF USED OIL, WITHOUT C ONFRONTING THE CASE OF M/S HOSHIARPUR AUTOMOBILES, RELIED UPON BY AO, HAS BEEN WRONGLY UPHELD BY THE ID. CIT(A). (V) THAT WHEN NO ADDITIONS FOR THE ALLEGED SALE OF 'SA LVAGE' AND 'USED OIL' WERE MADE IN AY 2006-07, EVEN WHEN THE CASE WA S REOPENED U/S.147, THE ID. CIT(A) OUGHT TO HAVE DELETED THE S AID ADDITIONS MADE IN THIS YEAR, FOLLOWING THE WELL SETTLED RULE OF 'CONSISTENCY'. (VI) THAT IN THE GIVEN FACTS OF THE CASE AND IN LAW, TH E ID.CIT(A) WAS NOT JUSTIFIED IN SUSTAINING THE ADDITION OF RS.10,16,96 9/- OUT OF TOTAL ADDITION OF RS.13,76,069/-, MADE BY ID. AO BY CAPIT ALISATION OF EXPENSES DEBITED UNDER THE HEAD 'REPAIR AND MAINTEN ANCE'. (VII) THAT FOR TEMPORARY WOODEN SHED AND STRUCTURE, 100% DEPRECIATION ON EXPENDITURE OF RS.81,118/- OUGHT TO HAVE BEEN AL LOWED, AS PERMISSIBLE UNDER THE INCOME TAX RULES. 3. THE BRIEF FACTS OF THE CASE AS NOTED IN THE ASSE SSMENT ORDER THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING OF C ARS, SPARE PARTS AND ACCESSORIES AND IS AUTHORIZED DEALER OF TOYOTA KIRL OSKAR MOTORS LTD. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY. DUR ING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER MADE FOLLOWING AD DITIONS. (I) DISALLOWANCE OF EXPENSES U/S 40(A)(I) OF THE AC T. RS.2,50.779/- (II) ADDITION ON ACCOUNT OF SALES OF SALVAGE. RS.10 ,00,000/- (III) ADDITION ON ACCOUNT OF UNDISCLOSED SALES OF U SED OILS RS.1,00,000/- (IV) ADDITION ON ACCOUNT OF CAPITALIZATION OF EXPE NSES RS.13,76,069/- (V) ADDITION OF ACCOUNT OF DISALLOWANCE OUT OF EXPE NDITURE RS.2,65,716/- 4. AGGRIEVED WITH THE ASSESSMENT ORDER THE ASSESSEE FILED APPEAL BEFORE CIT(A) AND FILED VARIOUS SUBMISSIONS. THE LE ARNED CIT(A) PARTLY ALLOWED THE RELIEF TO THE ASSESSEE BY HOLDING AS UN DER. ITA NO.677 (ASR)/2014 ASST. YEAR: 2010-11 3 IN RESPECT OF DISALLOWANCE U/S 40(A)(IA) OF THE A CT. 6.4 I HAVE CONSIDERED THE OBSERVATIONS OF THE ASSESSING (OFFICER AS MADE BY HIM IN THE ASSESSMENT ORDER AS WELL AS IN THE REMA ND REPORT. I HAVE ALSO CONSIDERED THE WRITTEN SUBMISSIONS FILED BY TH E ASSESSEE COMPANY VIDE LETTER DATED 20.06.201- AS WELL AS ITS COUNTER COMMENTS ON THE REPORT OF THE ASSESSING OFFICER ON THE ISSUE UNDER REFEREN CE. I HAVE ALSO CONSIDERED VARIOUS JUDICIAL PRONOUNCEMENT RELIED U PON BY THE ASSESSEE COMPANY ON THE ISSUE UNDER REFETENCE02M CAREFUL CON SIDERATION OF THE RIVAL CONTENTIONS, I AM ALSO OF THE OPINION THAT TH E ASSESSEE COMPANY WAS REQUIRED TO DEDUCT TDS FROM THE PAYMENTS MADE TO TK ML AS SOFTWARE THE SERVICES ARE BEING UTILIZED BY THE ASSESSEE THROUGH TKML. THE DEDUCTION OF TDS MADE BY TKML AT THE TIME OF MAKING FURL HER PAYMENTS TO SERVICE PROVIDER COMPANY WILL NOT ALTER THE POSITION. IN MY FURTHER OPINION AS THE EXPENSES HAVE BEEN PAID BY THE ASSESSEE COMPANY AND ALSO CLAIMED BY IT AS EXPENSES, IT IS THE ASSESSEE COMPANY WHO WILL CO MPLY WITH TDS PROVISIONS. IT IS IMMATERIAL WHETHER M/S TKML HAS D EDUCTED TDS OR NOT ON SUBSEQUENT PAYMENTS. THE ASSESSEE HAS ALSO NOT FURN ISHED ANY EVIDENCE WHICH WILL PROVE THAT M/S TKML HAS SHOWN THE AMOUNT RECEIVED FROM ASSESSEE COMPANY AS ITS INCOME IN ITS RETURN FILED WITH THE DEPARTMENT 6.5 IN VIEW OF THESE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE AND MORE PARTICULARLY THE FACT THAT THE ASSESSEE HAS NO T FURNISHED ANY EVIDENCE TO PROVE THAT M/S TKML HAS SHOWN THE AMOUN T RECEIVED FROM THE ASSESSPE COMPANY AS ITS INCOME, I AM OF THE CONSIDE RED OPINION THAT THE ASSESSING OFFICER IS FULLY JUSTIFIED G ADDITION OF RS.2,50,779/- ON ACCOUNT OF DISALLOWANCE OF EXPENSES FOR NON COMPLIANCE OF T DS PROVISIONS. IN THE RESULT, GROUNDS NO.2(A) AND 2(B) OF APPEAL TAKEN BY THE ASSESSEE COMPANY ARE DISMISSED. IN RESPECT OF ADDITION ON ACCOUNT OF SALVAGE 7.4 I HAVE CONSIDERED THE OBSERVATIONS OF THE ASSES SING OFFICER AS MADE BY HIM IN ASSESSMENT ORDER AS WELL AS IN THE REMAND REPORT. I HAVE ALSO CONSIDERED THE WRITTEN SUBMISSIONS FILED BY THE ASS ESSEE COMPANY VIDE LETTER DATED 20.06.2014 AS WELL AS ITS COUNTER COMM ENTS ON THE REPORT OF THE ASSESSING OFFICER ON THE ISSUE UNDER REFERENCE. I HAVE ALSO CONSIDERED VARIOUS JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE ASSESSEE COMPANY ON THE ISSUE UNDER REFERENCE. ON CAREFUL CONSIDERATION OF THE RIVAL CONTENTIONS, I AM OF THE OPINION THAT THE ASSESSING OFFICER HAS CLEARLY BROUGHT OUT THE FACTS RELATING TO ADDITION OF RS.10,00,000/- ON REC ORD. THE ASSESSING OFFICER HAS ALSO MADE ENQUIRIES FROM THE INSURANCE COMPANIES WITH REGARD TO SALVAGE DEDUCTED BY THEM. ALMOST EVERY INSURANCE COMPANY HAS CONFIRMED THE VIEW POINT OF THE ASSESSING OFFICER. THE PLEA OF THE ASSESSEE COMPANY THAT THE SALVAGE OF DAMAGED VEHICLES IS USE D TO BE COLLECTED BY ITA NO.677 (ASR)/2014 ASST. YEAR: 2010-11 4 THE INSURANCE COMPANIES OR THE OWNERS OF THE VEHICL ES IS NOT SUPPORTED BY ANY SOLID EVIDENCE. THE EVIDENCE PRODUCED BY THE AS SESSEE COMPANY FROM ONE INSURANCE COMPANY WILL ALSO NOT HELP THE ASSESS EE COMPANY AS THE INSURANCE COMPANY HAS ALSO MADE A GENERAL OBSERVATI ON IN ITS CERTIFICATE ISSUED TO THE ASSESSEE COMPANY. THE ASSESSING OFFIC ER HAS FURTHER COMPARED THE INCOME DECLARED BY THE ASSESSEE COMPAN Y WITH OTHER SIMILARLY PLACED ASSESSEES OF THE AREA AND FOUND TH AT THE ...COME FROM THE SALE OF SALVAGE DECLARED BY THE ASSESSEE COMPANY IS EXTREMELY LOW AS COMPARED TO M/S LALLY MOTORS (P) LIMITED WHICH IS A LSO ENGAGED IN THE SIMILAR BUSINESS I.E. BUSINESS OF PURCHASE AND SALE OF HONDA CARS. THE LD. ARS OF THE ASSESSEE COMPANY HAVE NOT CONTROVERTED T HIS FACTUAL POSITION. THE PLEA OF THE ASSESSEE COMPANY THAT NO ADDITION O N THIS ASPECT HAS BEEN MADE IN EARLIER OR SUBSEQUENT YEARS WILL ALSO NOT H ELP THE ASSESSEE COMPANY AS FACTS IN THOSE YEARS MAY BE DIFFERENT. I T MAY BE POSSIBLE THAT THE ASSESSING OFFICER HAS NOT TOUCHED THIS ISSUE IN THOSE YEARS WHEREAS THE ASSESSING OFFICER HAD MADE THE ADDITION HERE AF TER DEEP ENQUIRIES. IN THESE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, I AM OF THE OPINION THAT THE ASSESSEE COMPANY HAS SUPPRESSED THE SALE OF SAL VAGE TO A LARGE EXTENT. I AM ALSO OF THE OPINION THAT THE ESTIMATE MADE BY THE ASSESSING OFFICER IN RESPECT OF UNACCOUNTED SALES OF SALVAGE IS VERY REASONABLE. 7.5 IN VIEW OF THE ABOVE STATED FACTS AND IN THE CI RCUMSTANCES OF THE CASE, HE ADDITION OF RS. 10,00,000/-MADE BY THE ASSESSING OFFICER, ON ACCOUNT OF UNACCOUNTED SALES OF SALVAGE IS CONFIRMED. IN TH E RESULT, GROUNDS NO.3(A) TO 3(E) OF APPEAL TAKEN BY THE ASSESSEE COMPANY ARE DISMISSED. IN RESPECT OF ADDITION OF RS.1,00,000/- ON ACCOUNT OF USED OIL. 8.4 I HAVE CONSIDERED THE OBSERVATIONS OF THE ASSES SING OFFICER AS MADE BY HIM IN ASSESSMENT ORDER AS WELL AS IN THE REMAND REPORT. I HAVE ALSO CONSIDERED THE WRITTEN SUBMISSIONS FILED BY THE ASS ESSEE COMPANY VIDE LETTER DATED 20.06.2014 AS WELL AS ITS COUNTER COMM ENTS ON THE REPORT OF THE ASSESSING OFFICER ON THE ISSUE UNDER REFERENCE. I HAVE ALSO CONSIDERED VARIOUS JUDICIAL PRONOUNCEMENT RELIED UPON BY THE A SSESSEE COMPANY ON THE ISSUE UNDER REFERENCE. ON CAREFUL CONSIDERATION OF THE RIVAL CONTENTIONS, I AM ALSO OF THE OPINION THAT THE ASSESSING OFFICER HAS CLEARLY BROUGHT OUT THE FACTS RELATING TO ADDITION OF RS. 1,00,000/- ON RECORD. THE ASSESSING OFFICER HAS FURTHER COMPARED THE INCOME DECLARED BY THE ASSESSEE COMPANY WITH OTHER SIMILARLY PLACED ASSESSEES OF TH E AREA AND FOUND THAT THE INCOME FROM THE SALE OF USED OILS DECLARED BY T HE ASSESSEE COMPANY IS EXTREMELY LOW AS COMPARED TO M/S HOSHIARPUR AUTOMOB ILES WHICH IS ALSO ENGAGED IN THE BUSINESS OF PURCHASE AND SALE OF MAU TI/SUZUKI CARS. THE PLEA OF THE ASSESSEE COMPANY THAT NO ADDITION ON TH IS ASPECT HAS BEEN MADE IN EARLIER OR SUBSEQUENT YEARS WILL ALSO NOT H ELP THE ASSESSEE ITA NO.677 (ASR)/2014 ASST. YEAR: 2010-11 5 COMPANY AS FACTS IN THOSE YEARS MAY BE DIFFERENT. I T MAY BE POSSIBLE THAT THE ASSESSING OFFICER HAS NOT TOUCHED THIS ISSUE IN THOSE YEARS WHEREAS THE ASSESSING OFFICER HAD MADE THE ADDITION HERE AF TER DEEP ENQUIRIES. IN THESE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, I AM OF THE OPINION THAT THE ASSESSEE COMPANY HAS SUPPRESSED THE SALE OF SAL VAGE TO A LARGE EXTENT. I AM ALSO OF THE OPINION THAT THE ESTIMATE MADE BY THE ASSESSING OFFICER IN RESPECT OF UNACCOUNTED SALES OF USED OIL S IS VERY REASONABLE. 8.5 IN VIEW OF THE ABOVE STATED FACTS AND IN THE CI RCUMSTANCES OF THE CASE, HE ADDITION OF RS.L,00,000/-MADE BY THE ASSESSING O FFICER ON ACCOUNT OF UNACCOUNTED SALES OF USED OILS IS CONFIRMED. IN THE RESULT, GROUNDS NO. 4(A) TO 4(C) OF APPEAL TAKEN BY THE ASSESSEE COMPANY ARE ALSO DISMISSED. IN RESPECT OF ADDITION ON ACCOUNT OF CAPITALIZATION OF EXPENDITURE 10.4 I HAVE CONSIDERED THE OBSERVATIONS OF THE ASS ESSING OFFICER AS MADE BY HIM IN THE ASSESSMENT ORDER AS WELL AS IN THE RE MAND REPORT. I HAVE ALSO CONSIDERED THE WRITTEN SUBMISSIONS FILED BY TH E ASSESSEE COMPANY VIDE LETTER DATED 20.06.2014 AS WELL AS ITS COUNTER COMMENTS ON THE REPORT OF THE ASSESSING OFFICER ON THE ISSUE UNDER REFEREN CE. I HAVE ALSO CONSIDERED VARIOUS JUDICIAL PRONOUNCEMENTS RELIED U PON BY THE ASSESSEE COMPANY ON THE ISSUE UNDER REFERENCE. ON CAREFUL CO NSIDERATION OF THE RIVAL CONTENTIONS AND OTHER MATERIAL BROUGHT ON RECORD, I AM ALSO OF THE OPINION THAT THE ASSESSEE WILL DRAW ENDURING BENEFIT FROM M AJORITY OF THE EXPENSES CLAIMED BY IT AS REVENUE EXPENSES. THE EXPENSES CLA IMED BY THE ASSESSEE COMPANY ON SOME OF THE ITEMS CANNOT BE SAID TO BE I NCURRED ON CURRENT REPAIRS. THE EXPENSES INCURRED ON DISMANTLING AND R ECONSTRUCTION OF BOUNDARY WALL IS CERTAINLY CAPITAL EXPENDITURE. THE OTHER EXPENSES POINTED OUT BY THE ASSESSEE ARE ALSO OF CAPITAL IN NATURE A ND THE ASSESSEE COMPANY WILL DRAW BENEFIT FOR YEARS TOGETHER. HOWEV ER, I FEEL THAT THE EXPENSES INCURRED BY THE ASSESSEE COMPANY ON SAND/M ITTTI IS NOT CAPITAL EXPENDITURE AS THE SAME HAVE BEEN INCURRED FOR THE SMOOTH RUNNING OF DAY TO DAY CONDUCT OF THE BUSINESS OF THE ASSESSEE COMP ANY. MOREOVER, THE ASSESSING OFFICER HAS ALSO NOT ALLOWED ANY DEPRECIA TION ON MITTI EXPENSES OF RS.3,59,100/-. IN THESE FACTS AND CIRCUMSTANCE O F THE CASE, ADDITION TO THE EXTENT OF RS.3,59,100/- MADE BY THE ASSESSING O FFICER OUT OF TOTAL ADDITION UNDER CONSIDERATION DESERVES TO BE DELETED . 10.5 IN VIEW OF THE ABOVE STATED FACTS AND IN T HE CIRCUMSTANCES OF THE CASE, THE ADDITION OF RS.L 0,16,969/- OUT OF TOTAL ADDITION OF RS. 13,76,069/- IS CONFIRMED AND THE BALANCE ADDITION O F RS.3,59,100/- IS DIRECTED TO BE DELETED. IN THE RESULT, GROUNDS NO. 6(A) TO 6(D) OF APPEAL TAKEN BY THE ASSESSEE COMPANY ARE PARTLY ALLOWED. IN RESPECT OF ADDITION ON ACCOUNT OF DISALLOWANCE O F EXPENDITURE 11.4. I HAVE CONSIDERED THE OBSERVATIONS OF THE ASSESSING OFFICER AS MADE BY HIM IN THE ASSESSMENT ORDER AS WELL AS IN T HE REMAND REPORT. I HAVE ALSO CONSIDERED THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE ITA NO.677 (ASR)/2014 ASST. YEAR: 2010-11 6 COMPANY VIDE LETTER DATED 20.06.2014 AS WELL AS ITS COUNTER COMMENTS ON THE REPORT OF THE ASSESSING OFFICE]' ON THE ISSUE U NDER REFERENCE. ON CAREFUL CONSIDERATION OF THE RIVAL CONTENTIONS, I AM OF THE OPINION THAT THE ADDITION MADE BY THE ASSESSING OFFICER IS WITHOUT ANY BASIS. THE ASSESSING OFFICER HAS NOT CONSIDERED THE INCREASE TOTAL TURNOVER OF T HE ASSESSEE COMPANY. THE GENUINENESS OF EXPENSES HAS ALSO NOT BEEN DOUBT ED. MOREOVER, AD- HOC DISALLOWANCE WITHOUT POINTING OUT ANY DISCREPAN CY IN THE EXPENSES IS NOT PERMISSIBLE LOOKING TO THE FACTS AND CIRCUMSTAN CES OF A PARTICULAR CASE. 11.5. IN VIEW OF THE ABOVE STATED FACTS AND IN THE CIRCUMSTANCES OF THE CASE, I AM OF THE CONSIDERED OPINION THAT THE ASSES SING OFFICER IS NOT JUSTIFIED IN MAKING ESTIMATED ADDITION OF RS.2,65,7 16/- TO THE RETURNED INCOME OF THE ASSESSEE COMPANY ON ACCOUNT OF DISALL OWANCE OUT OF EXPENSES UNDER REFERENCE. THE ADDITION OF RS.2,65,7 16/- MADE BY THE ASSESSING OFFICER IS, THEREFORE, DIRECTED TO BE DEL ETED. IN THE RESULT, GROUNDS NO. 7(A) AND 7(B) OF APPEAL TAKEN BY THE AS SESSEE COMPANY ARE ALLOWED. 5. STILL AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE US. 6. AT THE OUTSET, THE LEARNED AR EXPLAINED THE FACT S OF THE CASE AND INVITED OUR ATTENTION TO THE FACT THAT ASSESSEE WAS HAVING TWO SHOW ROOMS OF CARS OF TOYOTA IN THE CITIES OF AMRITSAR A ND JALANDHAR AND THE ASSESSEE WAS IN THE SAME LINE OF BUSINESS FOR THE L AST MORE THAN 10 YEARS. 7. ARGUING UPON THE GROUND NOS. 1& 2, THE LEARNED A R SUBMITTED THAT THE PRINCIPLES OF ASSESSEE HAD GOT DEVELOPED A SOFT WARE FOR THE USE OF ALL DISTRIBUTORS AND ITS COST WAS CHARGED FROM VARIOUS DEALERS INCLUDING THE ASSESSEE. THE ASSESSEE, THEREFORE, INCURRED THIS EX PENDITURE AS REIMBURSEMENT TO ITS PRINCIPLE AND THEREFORE, THE A SSESSEE WAS NOT LIABLE TO DEDUCT TDS AS THE ASSESSEE HAD NOT OBTAINED ANY SERVICE FROM THE SERVICE PROVIDER. WITHOUT PREJUDICE IT WAS SUBMITTE D THAT THE PAYEE HAD DISCHARGED ITS TAX LIABILITY AND, THEREFORE, ALSO N O DISALLOWANCE WAS ITA NO.677 (ASR)/2014 ASST. YEAR: 2010-11 7 WARRANTED AND IN THIS RESPECT OUR ATTENTION WAS INV ITED TO AN AMENDMENT IN FINANCE ACT 2012 IN SECTION 40 WHICH SAYS THAT D EDUCTOR CANNOT BE TREATED AS ASSESSEE IN DEFAULT IN RESPECT OF NON DE DUCTION OF TAX IF THE PAYEE HAS DISCHARGED HIS TAX LIABILITY. 8. ARGUING UPON GROUND NO.3, THE LEARNED AR SUBMITT ED THAT ASSESSING OFFICER HAS MADE AN ADDITION OF RS.10,00, 000/- ON ACCOUNT OF ALLEGED SALE OF SALVAGE, ON THE BASIS OF SURMISES AND ESTIMATION WHICH IS NOT BASED ON THE FACTS OF THE CASE. THE LEARNED AR SUBMITTED THAT ASSESSING OFFICER HAD MADE THE ADDITION RELYING UPO N THE ASSESSMENT RECORDS OF M/S LALLY MOTORS PVT. LTD. AND IN THIS R ESPECT OUR ATTENTION WAS INVITED TO PAGE 15 OF ASSESSMENT ORDER. THE LEA RNED AR SUBMITTED THAT ASSESSEE USED TO CARRY OUT THE REPAIR WORK ON VEHICLES AND THE DAMAGED PARTS OF CARS WERE EITHER TAKEN BY INSURANC E COMPANY OR BY THE ASSESSEE HIMSELF AND THEREFORE, QUESTION OF SELLING OF DAMAGE PARTS AS SALVAGE DOES NOT ARISE AT ALL. OUR ATTENTION WAS IN VITED TO A COPY OF LETTER WRITTEN BY THE NEW INDIA ASSURANCE COMPANY LTD. PLA CED AT (PB-43) WHEREIN THE ASSURANCE COMPANY HAD CERTIFIED THAT TH E COMPANY SETTLED MOTORS CLAIMS AFTER COLLECTING THE SALVAGE OF DAMAG ED PARTS FROM DEALERS/CLAIMANTS. THE LEARNED AR, THEREFORE, SUBMI TTED THAT ASSESSEE WAS NOT RETAINING ANY SALVAGE AND THEREFORE, THE QU ESTION OF ITS SALE DOES NOT ARRIVE AND THEREFORE ADDITION WAS NOT WARRANTED . THE LEARNED AR ALSO PLACED HIS RELIANCE ON AN ORDER OF CHANDIGARH BENCH IN ITA NO.552/CHD/2010 WHERE A SIMILAR ADDITION MADE BY AS SESSING OFFICER ITA NO.677 (ASR)/2014 ASST. YEAR: 2010-11 8 WAS DELETED BY LEARNED CIT(A) AND TRIBUNAL HAD DISM ISSED THE APPEAL OF REVENUE. CONTINUING HIS ARGUMENTS THE LEARNED AR SU BMITTED THAT THE CASE OF THE ASSESSEE FOR A.Y 2006-07 WAS REOPENED T O EXAMINE AND VERIFY THE SALE OF SALVAGE ONLY AND IN THIS RESPECT OUR AT TENTION WAS INVITED TO ASSESSMENT ORDER PASSED U/S 148 WHEREIN THE ASSESSI NG OFFICER HAD RECORDED THE REASONS FOR REOPENING AND OUR ATTENTIO N WAS SPECIFICALLY INVITED TO REASON RECORDED AT SERIAL NO.3. THE LEAR NED AR SUBMITTED THAT EVEN AFTER REOPENING OF THE CASE ON THE SPECIFIC IS SUE OF SALE OF SALVAGE AND OIL THE ASSESSING OFFICER DID NOT MAKE ANY ADDI TION AND INVITED OUR ATTENTION TO CONCLUDING PARA OF SUCH ASSESSMENT ORD ER. THE LEARNED AR IN VIEW OF THIS SUBMITTED THAT ON THE BASIS OF CONS ISTENCY ALSO NO ADDITION COULD HAVE BEEN MADE. 9. ARGUING UPON GROUND NO.4 REGARDING ADDITION ON A CCOUNT OF ALLEGED UNACCOUNTED SALE OF USED OIL THE LEARNED AR SUBMITTED THAT THIS ADDITION HAS ALSO BEEN MADE WITHOUT ANY BASIS AND W ITHOUT FINDING ANY MATERIAL IN SUPPORT OF THE ADDITION AND MOREOVER TH E ADDITION WAS NOT CONFRONTED TO THE ASSESSEE. 10. AS REGARDS GROUND NO.5, THE LEARNED AR ARGUED THAT SINCE DURING REASSESSMENT PROCEEDINGS U/S 147 FOR ASST. YEAR 200 6-07 THE ASSESSING OFFICER DID NOT MAKE ANY ADDITION ON ACCOUNT OF SAL E OF SALVAGE, THEREFORE, LEARNED CIT(A) SHOULD HAVE DELETED THE A DDITION. 11. ARGUING UPON GROUND NO.6, THE LEARNED AR SUBMIT TED THAT THE PART SUSTAINING OF ADDITION ON ACCOUNT OF CAPITALIZ ATION OF EXPENDITURE ITA NO.677 (ASR)/2014 ASST. YEAR: 2010-11 9 WAS NOT JUSTIFIED ON THE PART OF LEARNED CIT(A) SPE CIFICALLY KEEPING IN VIEW THE FACT THAT THE ITEMS OF EXPENDITURE WERE REVENUE IN NATURE AND IN THIS RESPECT OUR ATTENTION WAS INVITED TO A COPY OF LEDG ER ACCOUNT PLACED AT (PB-64 TO 69). THE LEARNED AR SUBMITTED THAT THESE ARE SMALL ITEMS OF EXPENDITURES OF REVENUE NATURE WHICH THE ASSESSING OFFICER HAD WRONGLY HELD TO BE CAPITAL IN NATURE AND PART SUSTENANCE ON THE PART OF THE LEARNED CIT(A) WAS ALSO NOT JUSTIFIED AS THE ITEMS OF EXPENDITURE WERE CLEARLY OF REVENUE NATURE. ON GOING THROUGH SUCH DE TAILS THE BENCH ASKED THE LEARNED AR TO FURNISH DETAILS IN RESPECT OF AN ITEM OF EXPENDITURE DATE 15.12.2009 FOR AN AMOUNT OF RS.10 48874 /- AND IN REPLY THE LEARNED AR SUBMITTED THAT THIS EXPENDITUR E WAS INCURRED FOR REBUILDING OF BOUNDARY WALL ETC. AND TASK WAS CARRI ED BY M/S. JAIN BUILDTECH PVT. LTD. AND IN THIS RESPECT FILED A COP Y OF BILL OF M/S. JAIN BUILTECH PVT. LTD. 12. ARGUING UPON GROUND NO.7, THE LEARNED AR INVITE D OUR ATTENTION TO THE FACT THAT FEW OF THE ITEMS OF EXPENDITURE BOOKE D UNDER THE HEAD REPAIRS AND MAINTENANCE WERE FOR TEMPORARY STRUCTUR ES FOR WHICH THE INCOME TAX RULES PROVIDE 100% OF DEPRECIATION BUT W HICH THE AUTHORITIES BELOW HAD CONSIDERED THE SAME TO BE NORMAL ITEMS OF CAPITAL ASSET AND ON WHICH REGULAR RATE OF DEPRECIATION HAS BEEN ALLO WED INSTEAD OF LAW. 13. THE LEARNED DR IN RESPECT OF GROUND NO.1 & 2 S UBMITTED THAT ASSESSEE HAD MADE PAYMENTS FOR THE SERVICES AND WAS REQUIRED TO DEDUCT ITA NO.677 (ASR)/2014 ASST. YEAR: 2010-11 10 TDS AS PER THE PROVISIONS OF LAW AND THEREFORE, THE AUTHORITIES BELOW HAD RIGHTLY MADE AND UPHELD THE ADDITION. 14. ARGUING UPON THE GROUND NO.3, THE LEARNED DR SUBMITTED THAT ASSESSING OFFICER AFTER MAKING DETAILED INVESTIGATI ONS FROM THE INSURANCE COMPANIES HAD ARRIVED AT THE CONCLUSION THAT THE AS SESSEE HAD NOT DISCLOSED SALE OF SALVAGE IN ITS BOOKS OF ACCOUNT A ND IN THIS RESPECT OUR ATTENTION WAS INVITED TO THE FINDINGS OF ASSESSING OFFICER. THE LEARNED DR SUBMITTED THAT THE ASSESSING OFFICER HAS NOT MERELY RELIED UPON THE LALLY MOTORS LTD. AND HAS RECORDED HIS OWN FINDINGS. IT W AS SUBMITTED THAT CASE LAW OF LALLY MOTORS WAS RELIED TO STRENGTHEN H IS FINDINGS. 15. REPLYING TO GROUND NO.4, THE LEARNED DR RELIED UPON THE FINDINGS OF ASSESSING OFFICER AND LEARNED CIT(A). 16. REPLYING TO GROUND NO.6 THE LEARNED DR SUBMITTE D THAT LEARNED CIT(A) HAS ALREADY ALLOWED APPROPRIATE RELIEF TO TH E ASSESSEE AND FURTHER SUBMITTED THAT THE NATURE OF EXPENSES ON THE CONSTR UCTION OF BOUNDARY WALL IS CLEARLY OF CAPITAL NATURE AND HAS BEEN RIGH TLY UPHELD BY LEARNED CIT(A). 17. AS REGARDS LAST GROUND OF APPEAL THE LEARNED DR SUBMITTED THAT ASSESSING OFFICER HAS NOTED DOWN THE ITEMS OF EXPEN DITURE WHICH INCLUDED COST OF ALMIRAH AND COST OF CONSTRUCTION O F A NEW SHED AND THEREFORE, THE EXPENDITURE WAS NOT FOR TEMPORARY ST RUCTURE. 18. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE T HROUGH THE MATERIAL PLACED ON RECORD. ITA NO.677 (ASR)/2014 ASST. YEAR: 2010-11 11 19. AS REGARDS GROUND NO.1 & 2 REGARDING ADDITION O N ACCOUNT OF NON DEDUCTION TAX AT SOURCE, THE LEARNED AR HAD SUBMITT ED THAT PAYEE HAD PAID THE REQUIRED TAXES AND THEREFORE, AS PER THE A MENDMENT IN FINANCE ACT. 2012, THE ASSESSEE CANNOT BE SAID TO BE ASSESS EE IN DEFAULT. THE ASSESSEE HAD TAKEN THIS PLEA BEFORE THE AUTHORITIES BELOW BUT THE LEARNED CIT(A) UPHELD THE ADDITION. THE LEARNED CIT(A) HAS ALSO OBSERVED THAT ASSESSEE HAD NOT FILED ANY EVIDENCE IN SUPPORT OF I TS CLAIM THAT PAYEE HAD SHOWN THE AMOUNT RECEIVED FROM ASSESSEE COMPANY AS ITS INCOME IN ITS INCOME TAX RETURN. WE FURTHER FIND THAT THE ASSESSE E HAD NOT MADE PAYMENT TO SERVICE PROVIDER DIRECTLY BUT THE TOYATA KIRLOSKAR MOTORS LTD. ON BEHALF OF ALL ITS DEALERS HAD MADE A CONSOLIDATE D PAYMENT TO SOFTWARE COMPANY M/S. TORRY HARRIS BUSINESS SOLUTION PVT. LT D . AND THE SHARE OF THE ASSESSEE COMPANY WAS DEBITED TO IT AND ASSESSEE HAD REIMBURSEMENT THE SAME TO ITS PRINCIPLE. THE LEARNED AR HAS ALSO CLAIMED THAT TOYATA KIRLOSKAR MOTORS LTD. HAD DEDUCTED TDS 10% FROM TH E PAYMENTS MADE TO SOFTWARE COMPANY. THE CIT(A) HAS ALSO NOTED THIS FACT BUT DID NOT ALLOW THE RELIEF AS BEFORE HIM, NO EVIDENCE TO THIS EFFECT WAS FILED. THEREFORE, WE SET ASIDE THIS ISSUE TO THE OFFICE OF ASSESSING OFFICER WHO WILL EXAMINE AS TO WHETHER M/S. TOYATA KIRLOSKAR M OTORS LTD. HAD DEDUCTED THE TAX FROM PAYEE ON THE PAYMENTS MADE FO R ACQUIRING SOFTWARE FOR ALL DEALERS OF THAT COMPANY INCLUDING THAT OF ASSESSEE AND IF THE ASSESSING OFFICER FINDS THAT M/S TKML HAD DULY DEDUCTED TAX AT SOURCE AND HAD DEPOSITED THE SAME WITHIN PRESCRIBED PERIOD OF TIME AND ITA NO.677 (ASR)/2014 ASST. YEAR: 2010-11 12 IF IT IS FOUND TO HAVE COMPLIED WITH THE PROVISIONS OF LAW THEN NECESSARY RELIEF WILL BE GIVEN TO THE ASSESSEE. IN VIEW OF TH E ABOVE, GROUND NO.1 & 2 ARE ALLOWED FOR STATISTICAL PURPOSES. 20. AS REGARDS GROUND NO. 3, REGARDING THE ADDITION ON ACCOUNT OF ALLEGED THE SALE OF SALVAGE WE FIND THAT ASSESSING OFFICER HAD CARRIED OUT NECESSARY INVESTIGATIONS FROM INSURANCE COMPANIES A ND HAD OBSERVED THAT THERE WERE 4147 CASES OF INSURANCE CLAIMS IN J ALANDHAR OFFICE ONLY AND THEREFORE, THE NUMBER OF CASE IN BOTH SHOW ROOM S MUST BE MORE THAN FIVE THOUSAND. THE ASSESSING OFFICER, THOUGH C ARRIED OUT INVESTIGATION BY CALLING INFORMATION U/S 136(6) FRO M THE INSURANCE COMPANIES BUT THE INFORMATION COULD NOT BE COMPLETE D, AS THE ASSESSMENT WAS BECOMING TIME BARRED AND THEREFORE, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT ON THE BASIS OF IN FORMATION AVAILABLE IN HAND AND MADE ADDITION ON THE BASIS OF ESTIMATION O NLY. FROM THE INFORMATION AVAILABLE THE ASSESSING OFFICER HAS MAD E THE FOLLOWING OBSERVATIONS. INFORMATION U/S 133(6) WAS CALLED FOR BY THE UNDER SIGNED THROUGH THESE COMPANIES. THOUGH THESE COMPANIES HAVE PROVIDED INF ORMATION IN RESPECT OF SOME CASES BUT COMPLETE INFORMATION HAS NOT BEEN PROVIDED BY THEM TILL DATE. SINCE THE ASSESSMENT IS LIKELY TO BE BARRED B Y TIME LIMITATION ON 31.03.2013 UNDERSIGNED IS LEFT THE NO OPTION BUT TO CONCLUDE THE ISSUE ON THE BASIS OF INFORMATION GATNERED TILL DATE. INFORMATION PROVIDED BY THE NEW INDIA INSURANCE CO. LTD. AS PER LETTER DATED 03.12.2012 IS IN RESPECT OF 5 CASES. OUT OF THESE 5 CASES IN 1 CASE MENTIONED AT SERIAL NO.2 OF THE SAID LETTER IN CASE OF SH.BALDEV SINGH BHULLAR, HOSUSE NO.4, GURU AMARDASS AVENUE, AJNALA ROAD, AMRITSAR RS.3,000/- HAVE BEEN DEDUCTED AS SALVAGE. SIMILARLY AS PER LETTER DATED 19.03.2013 WHEREIN AGAIN IN 5 CASES INFORMATI ON HAS BEEN PROVIDED BY THE SAME INSURANCE COMPANY WHEREIN IN THE CASE O F SMT.HAIJIT KAUR, ITA NO.677 (ASR)/2014 ASST. YEAR: 2010-11 13 NIMAL SINGH AND RITU BHATIA AN AMOUNT OF RS.1000/- HAS BEEN DEDUCTED BY THE COMPANY ON ACCOUNT OF SALVAGE. IN THE CASE OF CHOLAMANDLAM MS GEN. INSURANCE CO. L TD. INFORMATION HAS BEEN RECEIVED ON 15.03.2013 WHEREIN A LIST OF 49 CA SES WHERE TRANSACTIONS EXCEEDING I LAC HAVE BEEN MADE HAS BEEN PROVIDED. A S PER THIS INFORMATION A NOTE IS AVAILABLE ON THE INFORMATION PROVIDED WHICH SAYS THAT: THE SALVAGE VALUE OF THE SPARE WAS DEDUCTED AT 10% *. LIKEWISE INFORMATION RECEIVED FROM RELIANCE GEN. IN SURANCE CO. LTD MENTIONS THAT DEDURTION OF AMOUNT ON ACCOUNT OF SAL VAGE IN THE FOLLOWING CASES AS UNDER: S NO. NAME OF THE PERSON AMOUNT DEDUCTED ON A/C OF SALVAG 1. SH.SURINDER MALHI 7218/- 2. SMT. RAJWANT KAUR 8200/- 3. SH.GURBINDER SINGH 8147/- 4. SH.SANDEEP GUPTA 11782/- BAJAJ ALLIANZ GEN.INSURANCE CO. HAS ALSO PROVIDED I NFORMATION AS PER ITS LETTER DATED 25.02.2013. IF DETAILS OF TOP 5 CLAIMS ARE EXAMINED IT IS CLEARLY MENTIONED THAT BAJAJ ALLIANZ GEN. CO. HAS ALSO DEDU CTED AMOUNT ON ACCOUNT OF SALVAGE AS A COMPULSORY DEDUCTION . FROM THE AFORESAID DISCUSSION IT IS CLEARLY ESTABLI SHED THAT ALL THE INSURANCE COMPANIES ARE DEDUCTING AMOUNT ON A/C OF SALVAGE. MOREOVER, UNDERSIGNED HAS ALSO REFERRED THE ASSESSMENT RECORD OF M/S.LALLY MOTORS P T7 T. LTD. FOR THE RELEVANT A.Y. WHEREIN THE SAID CONCERN HAS SUO MOTO DECLARED SALE ON A/C OF SALVAGE TO THE TUNE OF RS. 10,39,251/- . IN VIEW OF THE AFORESAID DISCUSSION IT IS SAFELY CONCLUDED THAT ASSESSEE UNDER REFERENCE HAS NEITHER DECLARED THE INCOME ON A/C SA LE OF SALVAGE NOR CLOSING STOCK HAS BEEN SHOWN. BY APPLYING THE RATIO OF THE CASES IN RESPECT OF WHICH INFORMATION IS GATHERED, KEEPING THE TOTAL NUMBER OF CASES WHERE INSURANCE CLAIMS HAVE BEEN PASSED AND THE INCOME ON A/C OF SALVAGE DECLARED BY M/S. LALLY MOTORS PVT. LTD. IN ADDITION TO THIS I WOULD LIKE TO MENTION THAT THERE ARE 452 CASES IN RESPECT OF JALA NDHAR BRANCH AND 415 IN RESPECT OF AMRITSAR BRANCH WHERE ACCIDENTAL VEHI CLES HAS BEEN REPAIRED AND NO INSURANCE CLAIM HAS BEEN LODGED BY THE CUSTO MERS AND IN THESE CASE ALSO SALVAGE WOULD HAVE BEEN THERE. I HEREBY M AKE AN ADDITION OF RS. 10,00,000/- ON A/C OF SALE OF SALVAGE OUT OF BOOKS OF THE ACCOU NT OF THE ASSESSEE BY REJECTING THE BOOKS VERSION OF THE ASSESSEE AND INVOKING PROVISIONS OF SECTION 145(3) OF THE INCOME TAX ACT, 1961. PENALTY PROCEEDINGS U/S 271(1) (C) FOR CONCEALING THE INCOM E TO THIS EXTENT ARE BEING INITIATED SEPARATELY. ITA NO.677 (ASR)/2014 ASST. YEAR: 2010-11 14 FROM THE ABOVE FINDINGS OF ASSESSING OFFICER, WE FI ND THAT ASSESSING OFFICER FAIRLY CONDUCTED INVESTIGATION IN THIS RES PECT, HOWEVER, IN VIEW OF TIME CONSTRAINTS COULD NOT OBTAIN COMPLETE INFORMAT ION AND MADE AD HOC ADDITION OF RS.10,00,000/-. THE ARGUMENT OF LEARNED AR THAT ASSESSING OFFICER MADE ADDITION ON THE BASIS OF ASSESSMENT RE CORDS OF LALLY MOTORS IS NOT CORRECT AS ASSESSING OFFICER HAD INDEPENDENT LY CARRIED OUT INVESTIGATIONS AND HAD RELIED UPON THE ASSESSMENT R ECORDS OF LALLY MOTORS TO JUST STRENGTHEN HIS FINDINGS. THE ARGUMEN T OF LEARNED AR THAT IN ASST. YEAR 2006-07 THE CASE OF THE ASSESSEE WAS REOPENED FOR THE SPECIFIC ENQUIRY OF SALE OF SALVAGE AND NO ADDITION WAS MADE AND THEREFORE, IN THIS YEAR ALSO THE ASSESSING OFFICER SHOULD NOT HAVE MADE ADDITION DO NOT HOLD GROUND, IN VIEW OF THE FACT TH AT EACH YEAR IS A SEPARATE YEAR AND FACTS IN THAT YEAR MAY NOT BE PRE VALENT IN THE PRESENT YEAR. THE ASSESSING OFFICER IN THE PRESENT YEAR HAS CLEARLY MADE A FINDING OF FACT THAT IN MY CASES INSURANCE COMPANIES HAD DE DUCTED AN AMOUNT FOR SALVAGE KEPT BY THE ASSESSEE. THE CASE LAW OF C HANDIGARH BENCH RELIED UPON BY LEARNED AR IS ALSO OF NO HELP TO ASS ESSEE AS IN THAT CASE THE ADDITION WAS MADE ON THE BASIS OF INFORMATION F ROM ANOTHER DEALER WHEREAS IN THE PRESENT CASE THE ADDITION HAS BEEN M ADE BY ASSESSING OFFICER AFTER CARRYING OUT INVESTIGATIONS. THEREFOR E, WE HOLD THAT ADDITION ON ACCOUNT OF SALE OF SALVAGE WAS JUSTIFIED BUT SIN CE THE ASSESSING OFFICER HAS MADE ADDITION ON LUMPSUM BASIS, ITS QUANTUM IS NOT JUSTIFIED AND THE QUANTUM OF ADDITION HAS TO BE BASED UPON THE FA CTS OF THE CASE. THE ITA NO.677 (ASR)/2014 ASST. YEAR: 2010-11 15 QUANTUM OF ADDITION CAN BE DETERMINED ON THE BASIS OF CERTIFICATES FROM INSURANCE COMPANIES REGARDING DEDUCTION MADE BY THE M FOR SALVAGE. THE INSURANCE COMPANIES FROM WHOM ASSESSEE HAD RECE IVED PAYMENTS CAN BE DIRECTED TO GIVE CERTIFICATE OF TOTAL AMOUNT DEDUCTED ON ACCOUNT OF SALVAGE VALUE FROM CLAIMS OF VARIOUS CUSTOMERS OF A SSESSEE. THEREFORE, WE SET ASIDE THE ISSUE TO THE OFFICE OF ASSESSING OFFI CER WHO ON THE BASIS OF SUCH VERIFICATION WILL ARRIVE AT THE AMOUNT OF ADDI TION IF ANY. THEREFORE, GROUND NO.3 IS ALLOWED FOR STATISTICAL PURPOSES. 21. NOW COMING TO GROUND NO.4, WE FIND THAT ASSESSI NG OFFICER HAD MADE AN ADDITION OF RS. 1 LAC ON ACCOUNT OF SALE OF USED OIL AND WHILE MAKING THE ADDITION HAD RELIED UPON THE SALE OF SUC H OIL DECLARED BY M/S. HOSHIARPUR AUTOMOBILES SOU-MOTTO AND IN THIS RESPEC T NO MATERIAL WAS AVAILABLE TO ASSESSING OFFICER. IT IS ALSO A FACT T HAT ASSESSEE HAD DECLARED AN AMOUNT OF RS.81,000/- AS SALE OF USED OIL AND NO DISCREPANCIES WERE OBSERVED BY ASSESSING OFFICER OR BY LEARNED CIT(A) EXCEPT FOR THE FACT THAT THEY HELD THAT THE SALE AMOUNT DECLARED WAS QUITE L OW AS COMPARED TO THE SALE DECLARED BY HOSHIARPUR AUTOMOBILES AND MOR EOVER THE ADDITION WAS NOT CONFRONTED TO ASSESSEE. THEREFORE, WE DELET E THIS ADDITION. IN VIEW OF THE ABOVE, GROUND NO.4 IS ALLOWED. 22. NOW COMING TO GROUND NO.5, WE FIND THAT THE ASS ESSEE HAS SUBMITTED THAT IN ASST. YEAR 2006-07 AFTER REOPENIN G THE CASE U/S 147 FOR EXAMINATION OF ALLEGED SALE OF SALVAGE THE ADDI TION WAS NOT MADE AND ITA NO.677 (ASR)/2014 ASST. YEAR: 2010-11 16 THEREFORE, FOR THE SAKE OF SETTLED RULE OF CONSISTE NCY THE ADDITION SHOULD NOT HAVE BEEN MADE IN THIS YEAR ALSO. WE HAVE ALREA DY OBSERVED THAT EACH YEAR IS AN INDEPENDENT YEAR AND FACTS IN ONE Y EAR MAY NOT BE IN EXISTENCE IN ANOTHER YEAR AND AS ALREADY HELD FACTS IN THE PRESENT YEAR ARE NOT SIMILAR TO THAT OF ASST. YEAR 2006-07 THERE FORE, THE ARGUMENT OF LEARNED AR IS REJECTED AND GROUND NO.5 IS DISMISSED . 23. NOW COMING TO GROUND NO.6 REGARDING ADDITION ON ACCOUNT OF CAPITALIZATION OF EXPENDITURE WE FIND THAT THE SUST ENANCE OF ADDITION OF LEARNED CIT(A) IS NOT CORRECT BECAUSE OF THE FACT T HAT THE NATURE OF EXPENSES INCURRED BY ASSESSEE ARE REVENUE IN NATURE AS THE ASSESSEE IS IN BUSINESS FOR THE LAST MORE THAN 10 YEARS AND THE NATURE OF BUSINESS IS SUCH THAT ASSESSEE NEEDS CONTINUES EXPENDITURE ON R EPAIR AND MAINTENANCE, MOREOVER, THE BREAK UP OF RS.10,48,847 /- DESCRIBES THE NATURE OF WORK DONE BY M/S. JAIN BUILD TECH PVT. LT D., TO BE WORK FOR BOUNDARY WALLS, WORKSHOP ROOFS AND WALLS, REPAIRING OF CEMENT CONCRETE FLOORING AND WINDOW REPAIRS OF SHOP. THE NATURE OF EXPENSES AS MENTIONED ON THE BILL ITSELF SUGGEST THAT NO NEW CA PITAL ASSETS WAS ACQUIRED BY THE ASSESSEE AND RATHER THE EXPENSES AR E IN THE NATURE OF REVENUE, THEREFORE, WE ALLOW GROUND NO.6. 24. NOW COMING TO GROUND NO.7, WE FIND THAT THE ARG UMENT OF LEARNED AR THAT THE EXPENDITURE WAS INCURRED FOR TEMPORARY STRUCTURES DO NOT HOLD ANY FORCE, IN VIEW OF THE FACT THAT EXPENDITUR E WAS INCURRED FOR ITA NO.677 (ASR)/2014 ASST. YEAR: 2010-11 17 CONSTRUCTION OF A SHED AND THE EXPENDITURE INCLUDED CONSTRUCTION COST AND CEMENT SHEETS FOR NEW SHED. THE BREAK UP OF EXP ENDITURE AS NOTED BY ASSESSING OFFICER IS AS BELOW. S.NO. DATE NAME OF THE PARTY AM OUNT I. 05.06.2009 JAI GLASS AND PLYWOOD (BOLD FOR ALMIRA IN SHOWROOM) 14382/- II. 31.10.2009 LAKHWINDER ENGG. WORKS ( FOR SHED CONSTRUCTION IN WASHING AREA) 33521/- III. 31.10.2009 DASHMESH ENGG. WORKS (CEMENTED SHEETS] FOR NEW SHED) J 22715/- IV. 31.10.2009 DASHMESH ENGG. WORKS (LABOUR FOR NEW SHED) 10500/- TOTAL: 81118/- THEREFORE, WE HOLD THAT EXPENDITURE CANNOT BE SAID TO BE FOR TEMPORARY STRUCTURE AND, THEREFORE, LEARNED CIT(A) HAS RIGHTL Y UPHELD THE ADDITION. IN VIEW OF THE ABOVE, GROUND NO.7 IS DISMISSED. 25. IN NUTSHELL, THE APPEAL OF THE ASSESSEE IS PART LY ALLOWED, PARTLY ALLOWED FOR STATISTICAL PURPOSES AND PARTLY DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH MAY, 2016 SD/- SD/- (A.D. JAIN) (T . S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEM BER DATED:11.05.2016. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), ITA NO.677 (ASR)/2014 ASST. YEAR: 2010-11 18 (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER