ACIT, Chandigarh V. M/s Punjab Small Industries & Export Corporation Ltd., Chandigarh

ITA 79/CHANDI/2011

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 1340 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 21-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJINDER SINGH
• Keywords: Depreciation; Revenue expenditure
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SHRI D.K.SRIVASTAVA, ACCOUNTANT MEMBER AND MS SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 79/CHD/2011 ASSESSMENT YEAR: 2007-08 THE ACIT, VS. M/S PUNJAB SMALL INDUSTRIES & EXPOR T CIRCLE 2(1), CORPORATION LTD, CHANDIGARH CHANDIGARH PAN NO. AABCBP1602M (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJINDER SINGH RESPONDENT BY: SHRI VINEET KRISHAN ORDER PER SUSHMA CHOWLA, JM THE APPEAL BY THE REVENUE IS AGAINST THE ORDER OF CIT(A), CHANDIGARH DATED 16.8.2010 RELATING TO ASSESSMENT Y EAR 2007-08 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE I.T. ACT. 2. THE REVENUE HAS RAISED THE FOLLOWING EFFECTIVE G ROUNDS OF APPEAL:- 1. THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS. 3,10,45,190/- MADE ON ACCOUNT OF EXPENDITURE UNDER THE HEAD MAINTENANCE OF FOCAL POINTS. 2. THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS. 9,23,223/- ON ACCOUNT OF UDYOG SAHAYAK EXPENSES. 3. THE LD. AR FOR THE ASSESSEE POINTED OUT THAT BOT H THE ISSUE RAISED IN THE PRESENT APPEAL ARE COVERED BY THE ORDERS OF THE TRIBUNAL IN ASSESSEES 2 OWN CASE RELATING TO ASSESSMENT YEARS 2003-04 & 200 4-05 AND SEPARATE ORDER RELATING TO ASSESSMENT YEAR 2005-06. THE LD . DR PLACED RELIANCE ON THE ORDER OF ASSESSING OFFICER. 4. THE ISSUE RAISED IN GROUND NO.1 BY THE REVENUE IS AGAINST THE DELETION OF ADDITION MADE UNDER THE HEAD MAINTENAN CE OF FOCAL POINTS. THE ASSESSEE HAD CLAIMED AN EXPENDITURE OF RS. 3.10 CRORE AS EXPENDITURE UNDER THE HEAD MAINTENANCE OF FOCAL POINTS. THE DETAILS FURNISHED UNDER THE HEAD ARE INCORPORATED IN PARA 2 OF THE ASSESSME NT ORDER. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE EXPENDIT URE IS NOT A REVENUE EXPENDITURE AS IT FORMS PART OF CURRENT ASSETS IN T HE BALANCE SHOWN AND THE WORK CARRIED OUT UNDER THESE HEADS RESULTS IN ADDIT ION TO THE ASSETS IN BALANCE SHEET. THE ASSESSING OFFICER NOTED SIMILA R ISSUE TO HAVE BEEN DEALT IN THE EARLIER YEARS AND FOLLOWING THE SAME, THE EXPENDITURE WAS HELD TO BE CAPITAL IN NATURE ON WHICH DEPRECIATION OF 10% WAS ALLOWED. THE CIT(A) FOLLOWING THE RATIO LAID DOWN BY THE TRI BUNAL IN ITA NOS. 611/CHD/2006 & 566/CHD/2007 RELATING TO ASSESSMENT YEAR 2003-04 AND 2004-05 AND ITA NO. 330/CHD/2008 RELATING TO ASSESS MENT YEAR 2005-06 HAD HELD THAT THE FACTS OF THE PRESENT CASE BEING S IMILAR TO THE FACTS IN THE EARLIER YEAR AND FOLLOWING THE ORDER OF THE TRIBUNA L, THE GROUND OF APPEAL RAISED BY THE ASSESSEE WAS ALLOWED. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORDS. THE REVENUE HAS FAILED TO BRING ON RECORD ANY FINDINGS CONTRARY TO THE OBSERVATIONS OF CIT(A) THAT THE ISSUE RAISED IN THE PRESENT APPEAL IS SIMILAR TO THE ISSUE RAISED IN THE ASSESSMENT YEARS 2003-04 TO 2005-06. SIMILAR ISSUE HAS BEEN ADJUDICATED UPON BY THE TRIB UNAL IN ASSESSEES OWN CASE VIDE ORDER DATED 30.5.2008 RELATING TO ASSESSM ENT YEARS 2003-04 AND 3 2004-05 (SUPRA), WHICH HAS BEEN FOLLOWED BY THE TRI BUNAL VIDE ORDER DATED 30.6.2008 IN ITA NO. 330/CHD/2008 RELATING TO ASSESSMENT YEAR 2005-06. THE CIT(A) UNDER PARA 5 AT PAGES 4 TO 9 O F THE APPELLATE ORDER HAS REPRODUCED THE FINDING OF THE TRIBUNAL IN ITA N O.611/CHD/2006, WHICH ARE NOT BEING REPRODUCED FOR THE SAKE OF BREV ITY THOUGH A REFERENCE IS BEING MADE TO THE SAME. FOLLOWING THE SAME, WE UPHOLD THE ORDER OF CIT(A) AND DISMISS THE GROUND NO.1 RAISED BY THE RE VENUE. 6. THE ISSUE RAISED IN GROUND NO.2 AGAINST THE DELE TION OF ADDITION OF UDYOG SAHAYAK EXPENSES WAS ALSO DELIBERATED UPON BY THE TRIBUNAL IN THE EARLIER YEARS AND THE ISSUE HAS BEEN ADJUDICATED IN FAVOUR OF THE ASSESSEE. THE OBSERVATIONS OF THE TRIBUNAL ARE INCORPORATED U NDER PARA 9 AT PAGE 11 OF THE APPELLATE ORDER. THE ASSESSING OFFICER HAD DISALLOWED 30% OUT OF THE TOTAL EXPENSES CLAIMED UNDER THE HEAD UDYOG SAH AYAK EXPENSES, WHICH HAVE BEEN ALLOWED BY THE CIT(A) FOLLOWING THE ORDERS OF TRIBUNAL (SUPRA) IN THE EARLIER YEARS. WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) AND UPHOLDING THE SAME, WE DISMISS THE GROUN D NO.2 RAISED BY THE REVENUE. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF MARCH, 2011. SD/- SD/- (D.K.SRIVASTAVA) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 23 RD MARCH, 2011 RKK 4 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR