Deputy Commissioner of Income-tax, V. Behr India Ltd., Pune

ITA 93/PUN/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9289 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 19-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY DHOKE
• Assessee Lawyers: R D ONKAR
• Keywords: Depreciation; Capital expenditure

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . . . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO. 93/PUN/2015 / ASSESSMENT YEAR : 2009-10 DCIT, CIRCLE - 8, PUNE . / APPELLANT V/S BEHR INDIA LTD., 29 TH MILESTONE, PUNE-NASHIK HIGHWAY, VILLAGE KURULI, KHED, CHAKAN, PUNE 411 501 PAN : AABCB2186L . / RESPONDENT ASSESSEE BY : SHRI R.D. ONKAR REVENUE BY : SHRI AJAY DHOKE / ORDER PER D. KARUNAKARA RAO, AM : THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORD ER OF CIT(A)-V, PUNE DATED 31-10-2014 RELATING TO ASSESSMENT YEAR 2009- 10. 2. THE ONLY ISSUE RAISED IN THIS APPEAL BY THE REVE NUE RELATES TO THE ALLOWABILITY OF PRODUCT DEVELOPMENT EXPENSES AMOUNT ING TO RS.1,60,75,000/-. 3. IN THE ASSESSMENT PROCEEDINGS, THE SAID EXPENSES WERE EXAMINED BY THE AO AND UNDERLINED THE ENDURING BENEFIT OF THE SAID EXPENSES. EVENTUALLY, HE HELD IN PARA 8 OF THE ASSESSMENT ORDER THAT THE SAM E CONSTITUTES CAPITAL EXPENDITURE AND DISALLOWED THE SAME. HOWEVER, THE BENEFIT OF DEPRECIATION AS PER THE RULES WAS GRANTED. / DATE OF HEARING :14.06.2017 / DATE OF PRONOUNCEMENT:14.06.2017 2 ITA NO.93/PUN/2015 4. IN THE FIRST APPELLATE PROCEEDINGS, AS PER THE D ISCUSSION GIVEN IN PARA NOS. 5 TO 8, THE CIT(A) GRANTED RELIEF TO THE ASSES SEE ON THIS ASPECT RELYING ON SIMILAR ORDERS OF THE CIT(A) FOR ASSESSMENT YEARS 2 002-03, 2003-04, 2007-08 AND 2008-09. 5. AGGRIEVED WITH THE SAME, THE REVENUE IS IN APPEA L BEFORE US. 6. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE FILE D A COPY OF THE ORDER OF THE TRIBUNAL FOR THE ASSESSMENT YEAR 2002-03 VIDE I TA NO.566/PUN/2013 ORDER DATED 21-04-2017 AND MENTIONED THAT THE TRIBUNAL DI SMISSED THE CORRESPONDING GROUND RAISED BY THE REVENUE AGAINST THE ORDER OF T HE CIT(A) AND GRANTED RELIEF TO THE ASSESSEE. FOR THE SAKE OF COMPLETENE SS, LD. COUNSEL FOR THE ASSESSEE READ OUT FEW LINES FROM PARA NO.10 OF THE ORDER OF THE TRIBUNAL AND THE SAME READ AS UNDER : 10. . . . . . . . . . . . . . ONCE, THE EXPENDITUR E HAS NOT BEEN INCURRED FOR THE DEVELOPMENT OF NEW PRODUCT BUT IS FOR THE IMPROVISA TION OF THE PRODUCTS ALREADY BEING MANUFACTURED BY THE ASSESSEE, THEN SU CH AN EXPENDITURE WHICH IS A REGULAR EXPENDITURE INCURRED BY THE ASSESSEE FOR SMOOTH AND EFFICIENT WORKING OF ITS BUSINESS, IS TO BE ALLOWED AS REVENUE EXPEND ITURE IN ITS HANDS. . . . . . . . . . . . . . . . . . . . . . .UPHOLDING THE ORDER OF C IT(A), WE DISMISS THE GROUNDS OF APPEAL RAISED BY THE REVENUE. 7. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATI VE RELIED ON THE ORDER OF THE AO. 8. WE HEARD BOTH THE PARTIES. ON PERUSAL OF THE OR DER OF THE TRIBUNAL FOR THE ASSESSMENT YEAR 2002-03, WE HAVE NOTICED THAT T HE TRIBUNAL DISTINGUISHED THE SUPREME COURT JUDGMENT IN THE CASE OF CIT VS. S ARAVANA SPINNING MILLS PVT. LTD., 293 ITR 201, WHICH WAS DELIVERED IN THE CONTE XT OF CURRENT REPAIRS OF PLANT AND MACHINERY, WHICH STANDS ON A DIFFERENT FOOTING. THEREFORE, WE ARE OF THE OPINION THAT THE DECISION OF CIT(A) DISCUSSED IN PA RA NO.8 GRANTING RELIEF TO THE 3 ITA NO.93/PUN/2015 ASSESSEE IS FAIR AND REASONABLE AND IT DOES NOT CAL L FOR ANY INTERFERENCE. ACCORDINGLY, THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 14 TH DAY OF JUNE, 2017. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE; DATED : 14 TH JUNE, 2017. / COPY OF THE ORDER FORWARDED TO : / BY ORDER , // TRUE //TRUE COPY// /ASSISTANT REGISTRAR , / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT(A) - V , PUNE 4. TH E CIT - V , PUNE 5. DR, ITAT, B BENCH PUNE; 6. / GUARD FILE.