ACIT, Coimbatore V. M/s Precot Meridian Limited, Coimbatore

ITA 885/CHNY/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 51813 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 25-08-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 01-06-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T N BETGIRI J
• Assessee Lawyers: K RAVI
• Keywords: Revenue expenditure
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI [BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT AND SHRI HARI OM MARATHA, JUDICIAL MEMBER] I.T.A NO.885/MDS/2009 (ASSESSMENT YEAR : 2006-07 ) THE ACIT COMPANY CIRCLE I(2) COIMBATORE VS M/S PRECOT MERIDIAN LTD (FORMERLY M/S MERIDIAN INDUSTRIES LTD.) SUPREME P.B 7161, GREEN FIELDS PULIAKULAM ROAD COIMBATORE 641 045 [PAN AABCP3038K] (APPELLANT) (RESPONDENT) C.O.NO.101/MDS/2009 (ASSESSMENT YEAR : 2006-07 ) M/S PRECOT MERIDIAN LTD (FORMERLY M/S MERIDIAN INDUSTRIES LTD.) COIMBATORE 641 045 VS THE ACIT COMPANY CIRCLE I(2) COIMBATORE (CROSS OBJECTOR) (RESPONDENT) DEPARTMENT BY : SHRI T.N.BETGIRI, JCIT/DR ASSESSEE BY : SHRI K. RAVI, ADVOCATE DATE OF HEARING : 25-08-2011 DATE OF PRONOUNCEMENT : 30-08-2011 O R D E R PER HARI OM MARATHA, JUDICIAL MEMBER: THE APPEAL BY THE REVENUE AND THE CROSS OBJECTI ON BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE LD. CIT(A), COIMBATORE, DATED 23.3.2008, PERTAINING TO ASSESSMENT YEAR 2006 -07. ITA 885-09 & CO 101/09 :- 2 -: 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COMPANY, ENGAGED IN THE BUSINESS OF MANUFACTURE A ND SALE OF COTTON YARN POLYESTER, SEWING THREADS AND PROCESSED FABRIC S. THE COMPANY FILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSI DERATION ON 11.11.2006 DECLARING TOTAL INCOME OF ` 4,05,74,937/- UNDER NORMAL COMPUTATION AND INCOME OF ` 7,89,65,704/- AS PER THE PROVISIONS OF SECTION 115JB. THE ASSESSING OFFICER HAS COMPLET ED THE ASSESSMENT U/S 143(3) ON 30.12.2008 DETERMINING THE INCOME UND ER NORMAL COMPUTATION AT ` 4,72,52,370/-. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL. THE ASSESSEE HAS DISPUTED THE ASSESSMENT FRAMED IN THE NAME OF A NON-EXISTING COMPANY, AS M/S MERIDIAN IND USTRIES LTD HAS ALREADY BEEN MERGED WITH THE ASSESSEE-COMPANY WITH EFFECT FROM 1.4.2006 AS PER THE ORDER OF THE HON'BLE MADRAS HIG H COURT PASSED ON 1.9.2006 BY SPECIFICALLY STATING THAT THE TRANSFER OR COMPANY VIZ. MERIDIAN INDUSTRIES LIMITED BE AND HEREBY DISSOLVED BEING WOUND UP. APART FROM THIS, THE MAIN ISSUE WITH REGARD TO REPL ACEMENT OF MACHINERY REGARDING WHICH IT WAS CLAIMED THAT CLAIM OF REPLACEMENT OF PARTS OF THE MACHINERY HAS TO BE TREATED AS REVENUE EXPENDITURE. 3. AT THE TIME OF HEARING BEFORE US, THE LD.AR, SHRI K .RAVI, HAS SUBMITTED WITH ALACRITY THAT SIMILAR ISSUES ARE BEI NG RESTORED TO THE FILE OF THE ASSESSING OFFICER WITH A VIEW TO FINALIZE TH E ISSUE IN CONSONANCE WITH THE DIRECTION OF THE HON'BLE SUPREME COURT REN DERED IN VARIOUS ITA 885-09 & CO 101/09 :- 3 -: DECISIONS LIKE THAT OF CIT VS SARAVANA SPINNING MIL LS P. LTD, 293 ITR 201, INTER ALIA. THIS FACT WAS NOT OR COULD NOT BE DENIED BY THE LD.DR AS WE ARE ALSO AWARE OF THIS LINE OF ACTION BEING T AKEN BY THE BENCHES IN CHENNAI. CONSEQUENTLY, WE RESTORE THIS APPEAL O F THE REVENUE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION THAT HE SHALL DECIDE THE IMPUGNED ISSUE IN THE LIGHT OF PLETHORA OF JUDICIA L PRONOUNCEMENTS ON THIS ISSUE. NEEDLESS TO MENTION THAT THE ASSESSING OFFICER SHALL GIVE OPPORTUNITY OF HEARING TO THE ASSESSEE AS REQUIRED BY LAW. 4. THE CROSS OBJECTION BY THE ASSESSEE WOULD BECOME PREMATURE IN VIEW OF THE FACT THAT WE HAVE SET ASID E THE FINDING OF THE LD. CIT(A) AND THAT OF ASSESSING OFFICER, BUT THE A SSESSEE IS AT LIBERTY TO RAISE THIS ISSUE WHENEVER OCCASION ARISES. ACCO RDINGLY, WE KEEP OPEN THE ISSUES RAISED IN THE CROSS OBJECTION BUT D ISMISS THE SAME AS PREMATURE. 5. IN THE RESULT APPEAL OF THE REVENUE AND CROSS OBJEC TION OF THE ASSESSEE STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30-08-2011. SD/- SD/- (DR. O.K. NARAYANAN) VICE-PRESIDENT (HARI OM MARATHA) JUDICIAL MEMBER DATED: 30 TH AUGUST, 2011 RD COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR