ACIT, Ludhiana V. M/s Malwa Industried Ltd., Ludhiana

ITA 714/CHANDI/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80873 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 12-08-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 28-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: M L JOSHI
• Keywords: Revenue expenditure; Capital expenditure
• Section: 143(3); 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE SHRI T.R.SOOD ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 714/CHD/2012 ASSESSMENT YEAR : 2007-08 THE A.C.I.T., VS M/S MALWA INDUSTRIES LTD., CIRCLE VII, INDUSTRIAL AREA-A, LUDHIANA. LUDHIANA. PAN : AABCM1287D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MANJIT SINGH RESPONDENT BY : SHRI M.L.JOSHI DATE OF HEARING : 12.08.2014 DATE OF PRONOUNCEMENT : 10.09.2014 O R D E R PER SUSHMA CHOWLA, JM THE APPEAL FILED BY THE REVENUE IS AGAINST THE ORDE R OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II LUDHIANA DA TED 27.04.2012 AGAINST THE ORDER PASSED UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 ( 'THE ACT' FOR SHORT). 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. L . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A)-II, LUDHIANA HAS ERRED IN LAW AND ON THE FAC TS WHILE DELETING THE ADDITION OF RS.2,90,652/- ON ACCOUNT OF INTEREST FR EE ADVANCES MADE BY THE ASSESSEE TO ITS SUBSIDIARY COMPANY. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A)-II, LUDHIANA HAS ERRED IN LAW AND ON THE FAC TS WHILE DELETING THE ADDITION OF RS.2,77,318/- U/S 40A (2) (B) OF TH E ITAT 1961, WHEN IT WAS ESTABLISHED THAT THE COMPANY HAS MADE PURCHASES OF RAW MATERIAL AT HIGHER RATES AS COMPARED TO THE MARKET RATES. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A)-II, LUDHIANA HAS ERRED IN LAW AND ON THE FAC TS OF THE CASE WHILE DELETING THE ADDITION OF RS.22,41,628/- ON AC COUNT OF CAPITAL 2 NATURE BANK CHARGED DEBITED BY THE ASSESSEE TO PROF IT AND LOSS ACCOUNT BY THE TREATING THESE AS REVENUE EXPENDITURE. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A)-II, LUDHIANA HAS ERRED IN LAW AND ON THE FAC TS OF THE CASE WHILE DELETING ADDITION OF RS.3,06,251/- OF CAPITAL NATURE EXPENDITURE DEBITED BY THE ASSESSEE TO PROFIT AND L OSS ACCOUNT BY TREATING THESE EXPENSES AS REVENUE EXPENDITURE. 3. THE ISSUE IN GROUND NO. 1 RAISED BY THE REVENUE IS AGAINST THE DELETION OF ADDITION MADE UNDER SECTION 36(1)(III) OF THE ACT. 4. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT T HE ASSESSEE WAS ENGAGED IN THE BUSINESS OF MANUFACTURING AND SALE O F DENIM FABRICS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER NOTED THAT THE ASSESSEE HAD ADVANCED INTEREST FREE ADVANCES TO ITS SUBSIDIARY COMPANY AT RS.112 LACS. THE ASSESSEE WA S SHOW CAUSED TO EXPLAIN AS TO WHY THE CORRESPONDING INTEREST ATT RIBUTABLE TO SUCH INTEREST FREE ADVANCES SHOULD NOT BE DISALLOWED OUT OF THE INTEREST EXPENDITURE DEBITED TO THE PROFIT & LOSS ACCOUNT. IN REPLY THE ASSESSEE EXPLAINED THAT THE SAID ADVANCES WERE MADE TO ITS SUBSIDIARY IN WHICH THE ASSESSEE HAD ACQUIRED STAKE , WHICH COMPANY IN TURN WAS ENGAGED IN THE MANUFACTURING OF JEANS-W EAR AND EXPORTING THE LEADING BRANDS. FURTHER, THE ASSESSE E POINTED OUT THAT THE FUNDS WERE GIVEN OUT OF INTERNAL CASH ACCRUALS AND SURPLUS FUNDS OF THE COMPANY. THE ASSESSING OFFICER REJECTING TH E PLEA OF THE ASSESSEE, IN VIEW OF THE DIVERSION OF THE INTEREST BEARING FUNDS FOR INTEREST-FREE ADVANCES, COMPUTED THE DISALLOWANCE U NDER SECTION 36(1)(III) OF THE ACT AT RS. 290,652/-. 5. THE COMMISSIONER OF INCOME TAX (APPEALS) NOTED T HAT THE CLAIM OF THE ASSESSEE WAS ALLOWED BY THE COMMISSION ER OF INCOME TAX (APPEALS) IN THE APPEAL FILED RELATING TO ASSES SMENT YEARS 2005-06 AND 2006-07, IN TURN FOLLOWING THE RATIO LA ID DOWN BY THE 3 HON'BLE SUPREME COURT IN S.A. BUILDERS VS CIT 288 I TR 1 (S.C). FURTHER, THE TRIBUNAL IN ITA NO. 696/CHD/2008 IN AS SESSEE'S OWN CASE RELATING TO ASSESSMENT YEAR 2005-06 AND IN ITA NO. 1169/CHD/2009 RELATING TO ASSESSMENT YEAR 2006-07 H AD UPHELD THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS). FUR THER, THE COMMISSIONER OF INCOME TAX (APPEALS) HIMSELF IN THE APPEAL RELATING TO ASSESSMENT YEAR 2008-09 HAD DELETED THE SAID ADDITION. 6. THE REVENUE IS IN APPEAL AGAINST THE SAID ORDER OF COMMISSIONER OF INCOME TAX (APPEALS). 7. THE LD. DR FOR THE REVENUE PLACED RELIANCE ON TH E ORDER OF THE ASSESSING OFFICER. 8. THE LD. AR FOR THE ASSESSEE RELYING UPON THE ORD ER OF THE COMMISSIONER OF INCOME TAX (APPEALS) PLACED RELIANC E ON THE SUBMISSIONS MADE BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSING OFFICER DURING THE YEAR UNDER CONSIDE RATION HAD COMPUTED THE DISALLOWANCE UNDER SECTION 36(1)(III) OF THE ACT ON ACCOUNT OF INTEREST FREE ADVANCES MADE BY THE ASSES SEE TO ITS SUBSIDIARY WHEREAS IT HAD CLAIMED INTEREST EXPENDIT URE IN ITS PROFIT & LOSS ACCOUNT. THE PLEA OF THE ASSESSEE BEFORE US WAS THAT THE SAID ADVANCES WERE MADE TO ITS SUBSIDIARY COMPANY W HICH HAD BEEN ACQUIRED IN FURTHERANCE OF HIS BUSINESS NEED. THE PLEA OF THE ASSESSEE IS THAT THE SAID ADVANCE HAVING BEEN MADE DURING THE COURSE OF CARRYING ON OF HIS BUSINESS DOES NOT MERI T ANY DISALLOWANCE OF INTEREST BECAUSE OF BUSINESS EXIGEN CY. WE FURTHER 4 FIND THAT SIMILAR ISSUE AROSE BEFORE THE TRIBUNAL I N ASSESSEE'S OWN CASE RELATING TO ASSESSMENT YEAR 2005-06 AND 2006-0 7 WHEREIN THE TRIBUNAL VIDE SEPARATE ORDERS DATED 29.07.2009 AND 28.02.2011 HAD ALLOWED THE CLAIM OF THE ASSESSEE UPHOLDING THE ORD ER OF COMMISSIONER OF INCOME TAX (APPEALS). IN VIEW THER EOF, AS THE FACTS AND CIRCUMSTANCES ARE IDENTICAL TO THE FACTS AND CIRCUMSTANCES IN PRECEDING YEARS, WE UPHOLD THE ORDER OF COMMISSI ONER OF INCOME TAX (APPEALS). HOWEVER, THE ISSUE DECIDED VIDE PRE SENT GROUND OF APPEAL SHALL NOT BE A PRECEDENT USED BY ANY OTHER A SSESSEE. THE GROUND OF APPEAL NO. 1 RAISED BY THE REVENUE IS THU S, DISMISSED. 10. THE ISSUE IN GROUND OF APPEAL NO. 2 RAISED BY T HE REVENUE IS AGAINST DELETION OF ADDITION MADE UNDER SECTION 40A (2)(A) OF THE ACT. THE ASSESSING OFFICER OBSERVED THAT THE ASSES SEE HAD MADE PURCHASES FROM ITS SISTER CONCERN M/S MALWA COTTON & SPINNING MILLS TOTALING RS. 1,84,56,763/-. FURTHER, SIMILAR PURCHASES WERE MADE FROM INDEPENDENT PARTIES. THE ASSESSEE WAS ASK ED TO PRODUCE COMPLETE BILLS IN RESPECT OF THE SAID PURCHASES. T HE ASSESSING OFFICER, ON COMPARISON FOUND THAT THE ASSESSEE HAD PAID MORE PRICE TO ITS SISTER CONCERN THAN TO THE OUTSIDE PARTIES. THE MONTH-WISE TABULATED DETAILS ARE AVAILABLE UNDER PARA 2 AT PAG E 3 OF THE ASSESSMENT ORDER. THE ASSESSEE WAS ACCORDINGLY, SH OW CAUSED TO EXPLAIN AS TO WHY THE DISALLOWANCE UNDER SECTION 40 A(2)(B) OF THE ACT MAY NOT BE MADE IN THE CASE. THE REPLY OF THE ASSESSEE IS REPRODUCED AT PAGE 3 & 4 OF THE ASSESSMENT ORDER. HOWEVER, THE CONTENTION OF THE ASSESSEE WAS REJECTED AS ACCORDIN G TO THE ASSESSING OFFICER, THERE WAS DIFFERENCE IN THE VALU E OF PURCHASES MADE FROM THE SISTER CONCERN AS COMPARED TO THE PUR CHASES MADE 5 FROM OUTSIDE PARTIES. THE EXCESS PAYMENT WAS WORKE D OUT AT RS. 277,318/- WHICH WAS DISALLOWED UNDER SECTION 40A(2) (B) OF THE ACT. 11. BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) , THE ASSESSEE FURNISHED REPLY WHICH IS INCORPORATED UNDE R PARA 5.2 AT PAGES 5 TO 8 OF THE APPELLATE ORDER, IN WHICH IT WA S POINTED OUT THAT THERE WAS DAILY FLUCTUATION IN THE RATES OF THE RAW MATERIAL PURCHASED BY THE ASSESSEE AND IN CASE THE PURCHASE RATE OF THE SAID ITEMS ARE COMPARED ON DAILY BASIS, THEN THE ASSESSE E HAD PURCHASED THE SAID ITEMS ON A LESSER RATE FROM ITS SISTER THA N FROM OUTSIDE INDEPENDENT PARTIES. THE TABULATED DETAILS ARE REP RODUCED AT PAGE 7 OF THE APPELLATE ORDER. THE COMMISSIONER OF INCOME TAX (APPEALS) VIDE PARA 5.3 HELD AS UNDER : 5.3 I HAVE CAREFULLY CONSIDERED THE CONTENTION OF THE LD. COUNSEL FOR THE APPELLANT AND PERUSED THE RELEVANT DETAILS. THE APPELLANT HAS SUBMITTED DATE WISE AND ITEM-WISE DETAIL OF MATERIA L PURCHASED FROM RELATED CONCERN AND OUTSIDE INDEPENDENT PARTIES IN THE MONTH OF AUGUST 2006, SEPTEMBER 2006, NOVEMBER 2006, JANUARY 2007, FEBRUARY 2007 AND MARCH 2007. IT IS SEEN THAT THERE ARE WIDE FLUC TUATIONS OF PRICE OVER THE MONTHS. IT IS ALSO SEEN THAT ON THE DATE W HEN MATERIAL WAS PURCHASED FROM MALAWA COTTON SPG. MILLS LIMITED THE RATES OF SAME ITEM PURCHASED FROM OUTSIDE PARTIES WERE MATCHING AND COMPARABLE. IN THIS REGARD IT IS SEEN FROM THE ASSESSMENT ORDER THAT DURING THE ASSESSMENT PROCEEDINGS, THE APPELLANT HAD EXPLAINED THAT THE COMPANY HAD PURCHASED TWO KINDS OF WASTE I.E. COTTON COMBER WASTE AND FLAT WASTE FROM M/S MALWA COTTON SPINNING MILLS LTD. AND FROM OUTSIDE PARTIES. APPELLANT HAD FURTHER EXPLAINED THAT COTTO N COMBER WASTE IS FINE WASTE AND IS MORE EXPENSIVE THAN FLAT WASTE AN D VARIATION IN AVERAGE PRICE DURING THE MONTH IS BECAUSE PURCHASE PIECE OF COTTON COMBER WASTE AND FINE WASTE HAVE BEEN TAKEN TOGETHE R. TO SEE IF THE COMPANY HAS MADE EXCESS PAYMENT IT WOULD BE IMPORTA NT TO COMPARE THE ITEM WISE PRICES. AS MENTIONED IN THE ASSESSMEN T ORDER DETAILS FOR SUCH PURCHASES MADE ON SPECIFIC DATES OF THE MONTH OF NOVEMBER 2006 FROM RELATED CONCERN AND FROM PARTIES OTHER THAN TH E SISTER CONCERNS WERE DULY PRODUCED BEFORE THE A.O. AND IT WAS CONTE NDED THAT ON THE DATE ON WHICH FLAT WASTE WAS PURCHASED FROM M/S MAL WA COTTON SPINNING MILLS LTD, THE RATES OF SAME ITEM PURCHASE D FROM OUTSIDE PARTIES WAS HIGHER. HOWEVER, THE AO DID NOT ACCEPT THIS EXPLANATION AND THIS EVIDENCE AND OBSERVED THAT THE ASSESSEE HA S INFLATED THE PURCHASES MADE FROM M/S MALWA COTTON SPINNING MILLS LTD. IN MY OPINION THE ASSESSING OFFICER WAS NOT JUSTIFIED IN OBSERVING AS ABOVE. I AGREE WITH THE LD. COUNSEL THAT THE METHOD ADOPTED BY THE A.O. FOR COMPARING THE RATES OF PURCHASES MADE FROM THE SIST ER CONCERNS IS NOT 6 CORRECT METHOD. IN VIEW OF THE FACT THAT THERE ARE FLUCTUATIONS IN PRICE OF WASTE ON DAY TO DAY BASIS, THE CORRECT METHOD IS TO COMPARE THE RATES OF PURCHASES MADE BY THE APPELLANT FROM SISTER CONCERN S AT A PARTICULAR POINT OF TIME BY COMPARING THE SAME WITH THE RATES GIVEN FOR THE SIMILAR GOODS TO OTHER OUTSIDE PARTIES AT THE SAME POINT OF TIME. AS MENTIONED ABOVE THE RELEVANT DETAILS WERE DULY PRODUCED AT TH E TIME OF ASSESSMENT PROCEEDINGS BUT THE AO CHOSE TO IGNORE THE EVIDENCE . AS SUBMITTED BY THE APPELLANT, DATE WISE AND ITEM-WISE DETAIL OF MA TERIAL PURCHASED FROM RELATED CONCERN AND OUTSIDE INDEPENDENT PARTIE S IN THE MONTH OF NOVEMBER 2006, JANUARY 2007, FEBRUARY 2007 AND MARC H 2007 PAYMENT MADE TO MALWA COTTON SPG, MILLS FOR PURCHAS E OF COMBER WASTE AND FLAT WASTE WAS NEITHER EXCESSIVE NOR UNRE ASONABLE. 12. THE LD. DR FOR THE REVENUE HAS FAILED TO CONTRO VERT THE FINDINGS OF THE COMMISSIONER OF INCOME TAX (APPEALS ) AND IN VIEW THEREOF, WE FIND NO MERIT IN THE ADDITION MADE BY T HE ASSESSING OFFICER ESPECIALLY WHERE THE ASSESSEE HAD COMPARED THE PURCHASE RATES IN RESPECT OF THE ITEMS PURCHASED FROM SISTER CONCERN WITH THE PURCHASE RATES OF ITEMS PURCHASED FROM INDEPENDENT PARTIES AND THE TABULATED DETAILS REFLECT THE SAME TO BE ON THE LOW ER SIDE. UPHOLDING THE ORDER OF COMMISSIONER OF INCOME TAX ( APPEALS), WE REJECT GROUND OF APPEAL NO. 2 RAISED BY THE REVENUE . 13. THE ISSUE IN GROUND OF APPEAL NO. 3 RAISED BY T HE REVENUE IS IN RELATION TO DELETION OF ADDITION OF RS. 22,41,628/- PAID ON ACCOUNT OF BANK CHARGES. 14. THE ASSESSING OFFICER, DURING THE ASSESSMENT PR OCEEDINGS NOTED THAT THE SAID CHARGES WERE INCURRED FOR THE S ANCTION OF TERM LOAN AND THE ASSESSEE WAS SHOW CAUSED TO EXPLAIN AS TO WHY THE SAME SHOULD NOT BE TREATED AS CAPITAL EXPENDITURE. IN REPLY, THE ASSESSEE POINTED OUT THAT IT HAD AVAILED VARIOUS FU ND BASED AND NON- FUND BASED WORKING CAPITAL LIMITS FROM DIFFERENT BA NKS AGAINST HYPOTHECATION OF INVENTORIES. THE SAID WORKING CAP ITAL LIMITS WERE UTILIZED TO MEET DAY-TO-DAY REQUIREMENTS OF THE BUS INESS AND BANK 7 CHARGES WERE THE PROCESSING FEE PAID ON RENEWAL OF SAID WORKING CAPITAL FACILITIES, WHICH IN-TURN WERE PAID EVERY Y EAR. SINCE THE EXPENDITURE WAS RECURRING IN NATURE, THE PLEA OF TH E ASSESSEE WAS THAT IT WAS NOT CAPITAL EXPENDITURE. THE ASSESSING OFFICER, REJECTING THE SAME UPHELD THE EXPENDITURE TO BE A CAPITAL IN NATURE AND DISALLOWED A SUM OF RS. 22,41,628/- UNDER SECTION 3 7(1) OF THE ACT. 15. THE COMMISSIONER OF INCOME TAX (APPEALS), AFTER CONSIDERING THE PLEA OF THE ASSESSEE NOTED THAT THE EXPENSES HA D BEEN INCURRED ON ACCOUNT OF PROCESSING FEE PAID BY THE ASSESSEE T O BANK TO PROCESS THE WORKING CAPITAL FACILITY IN ORDER TO MEET THE D AY-TO-DAY REQUIREMENT OF FUNDS. THE SAID WORKING CAPITAL FACI LITIES WERE ISSUED GENERALLY FOR A PERIOD OF ONE YEAR AND THE B ANK CHARGES WERE LEVIED EACH YEAR ON RENEWAL OF THE SAID FACILITIES. THE COMMISSIONER OF INCOME TAX (APPEALS) FURTHER NOTED THAT SIMILAR ISSUE AROSE BEFORE THE TRIBUNAL IN ASSESSMENT YEARS 2005-06 AND 2006-07 AND THE SAID ADDITION HAD BEEN DELETED BY THE TRIBUNAL. IN VIEW THEREOF, THE COMMISSIONER OF INCOME TAX (APPEALS) ALLOWED TH E CLAIM OF THE ASSESSEE, AGAINST WHICH THE REVENUE IS IN APPEAL. 16. ON THE PERUSAL OF THE RECORD, WE FIND THAT THIS ISSUE AROSE BEFORE THE TRIBUNAL IN ASSESSEE'S OWN CASE RELATIN G TO ASSESSMENT YEAR 2005-06 AND 2006-07 (SUPRA). WE FIND THAT THE TRIBUNAL IN ASSESSMENT YEAR 2005-06 (SUPRA) VIDE PARA 29 OBSERV ED AS UNDER : 29. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CARE FULLY. IN PARA 5 OF THE ASSESSMENT ORDER, THE ASSESSING OF FICER HAS REFERRED TO THE DETAILS OF LOAN PROCESSING CHARGES AMOUNTING TO RS.15,23,883/-. AFTER ENUMERATING THE DETAIL, I T IS NOTED BY THE ASSESSING OFFICER THAT THE SAID SUM IS DISAL LOWABLE U/S 37(1) OF THE ACT BEING CAPITAL IN NATURE. THE REASONING ADVANCED BY THE ASSESSING OFFICER IS THAT THE CHARG ES HAVE BEEN PAID FOR GETTING THE SECURED LOANS SANCTIONED FOR THE EXPANSION OF THE BUSINESS OF THE ASSESSEE. ON THE 8 CONTRARY, THE SUBMISSIONS MADE BY THE ASSESSEE BEFO RE THE CIT(APPEALS) BRING OUT THAT THE SUMS IN QUESTION CA NNOT BE TREATED AS CAPITAL IN NATURE. FIRSTLY, IT WAS CANV ASSED THAT THE ENTIRE SUM, EXCEPT RS.2,50,000/-, WAS IN RELATI ON TO PROCESSING OF WORKING CAPITAL LIMITS SANCTIONED BY THE BANKS. ON THIS BASIS, THE CIT(APPEALS) RECORDS A F INDING THAT SUCH EXPENDITURE REFLECTS PAYMENT MADE TO THE BANK ON ACCOUNT OF WORKING CAPITAL LIMITS, WHICH ARE UTILIZ ED BY THE ASSESSEE TO MEET THE DAY-TO-DAY REQUIREMENTS OF FUN DS OF BUSINESS. ON THE STRENGTH OF SUCH A FINDING, THE CIT(APPEALS) PROCEEDS TO HOLD THAT THE IMPUGNED EXPENDITURE IS OF REVENUE IN NATURE. WE FIND NO MA TERIAL ON RECORD TO NEGATE THE AFORESAID FACTUAL FINDINGS ARR IVED AT BY THE CIT(APPEALS). IN FACT, THE ASSERTION OF THE ASS ESSING OFFICER IN THE ASSESSMENT ORDER IS DEVOID OF ANY FA CTUAL SUPPORT AND IS MERELY A BALD ASSERTION. IN ANY CAS E, THERE IS NO MATERIAL TO NEGATE THE FINDING OF THE CIT(APP EALS) AND THEREFORE, WE ARE INCLINED TO AFFIRM THE DECISION O F THE CIT(APPEALS) IN HOLDING THAT THE NATURE OF THE EXPE NDITURE WAS REVENUE IN CHARACTER BEING PAYMENTS MADE TO THE BANKS FOR PROCESSING OF WORKING CAPITAL FACILITIES. SECO NDLY, EVEN WITH REGARD TO THE SUM OF RS.2,50,000/-, THE CIT(AP PEALS) HAS BROUGHT OUT THAT NO DEDUCTION OF SUCH AMOUNT HA S BEEN CLAIMED IN THE PROFIT AND LOSS ACCOUNT. PARTLY, RS .97,973/- OUT OF THE SAME HAS BEEN CAPITALIZED UNDER THE CAPI TAL WORK-IN-PROGRESS AND THE BALANCE OF RS.1,52,027/- W AS TRANSFERRED TO PRE-PAID EXPENSES. ON THIS SPECIFIC OBSERVATION OF THE CIT(APPEALS), THERE IS NO NEGATI ON FROM THE SIDE OF THE REVENUE AND THEREFORE, WE ARE INCLI NED TO UPHOLD THE CONCLUSION DRAWN BY THE CIT(APPEALS). AS A RESULT, THE ACTION OF THE CIT(APPEALS) IN DELETING THE ADDITION OF RS.15,23,883/- MADE BY THE ASSESSING OF FICER IS HEREBY AFFIRMED. THE REVENUE FAILS ON THIS GROUND. 17. THE FACTS AND CIRCUMSTANCES AND THE ISSUE RAISE D VIDE PRESENT GROUND OF APPEAL IS IDENTICAL TO THE ISSUE BEFORE T HE TRIBUNAL IN ASSESSEE'S OWN CASE AND FOLLOWING THE SAME PARITY OF REASONING, WE UPHOLD THE ORDER OF COMMISSIONER OF INCOME TAX (APP EALS) IN ALLOWING THE RELIEF OF RS. 22,41,628/- BEING BANK C HARGES PAID FOR RENEWAL OF THE WORKING CAPITAL FACILITIES AVAILED B Y THE ASSESSEE. THE GROUND OF APPEAL NO. 3 RAISED BY THE REVENUE IS THUS, DISMISSED. 18. THE ISSUE IN GROUND OF APPEAL NO. 4 RAISED BY T HE REVENUE IS AGAINST DELETION OF ADDITION OF RS. 30,625/-. THE SAID ADDITION WAS MADE BY THE ASSESSING OFFICER BY HOLDING THAT THE S UM OF RS. 9 125,030/- AND RS. 181,221/- DEBITED TO THE BUILDING REPAIR AND MAINTENANCE ACCOUNT WERE CAPITAL IN NATURE. THE PL EA OF THE ASSESSEE WAS THAT THE SAID EXPENDITURE HAD BEEN INC URRED ON REPAIR OF ROAD AND BOUNDARY WALL OF THE FACTORY BUILDING R ESPECTIVELY DURING THE YEAR UNDER CONSIDERATION. HOWEVER, THE SAME WAS REJECTED BY ASSESSING OFFICER/ 19. THE COMMISSIONER OF INCOME TAX (APPEALS) ALLOWE D THE CLAIM OF THE ASSESSEE HOLDING THE SAID EXPENDITURE TO BE REVENUE IN NATURE. WE FIND THAT THE ASSESSING OFFICER HAS NOT DOUBTED THE GENUINENESS OF THE SAID EXPENDITURE AND THE ONLY ISSUE RAISED B Y THE ASSESSING OFFICER WAS WHETHER THE SAID EXPENDITURE WAS CAPITA L OR REVENUE IN NATURE. THE NATURE OF THE EXPENDITURE INCURRED BY T HE ASSESSEE TOWARDS MAINTENANCE OF AN EXISTING ASSET IS AN EXPE NDITURE TOWARDS REPAIR AND MAINTENANCE AND IS REVENUE IN NATURE. U PHOLDING THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), WE D ISMISS GROUND OF APPEAL NO. 4 RAISED BY THE REVENUE. 20. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH SEPTEMBER, 2014. SD/- SD/- ( T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 10 TH SEPTEMBER, 2014 POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR. ASSISTANT REGISTRAR ITAT,CHD.