Shri M.M.Philip, CHENNAI V. DCIT, CHENNAI

ITA 949/CHNY/2009

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 1098 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 03-02-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 16-06-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P B SEKARAN
• Keywords: Depreciation; Revenue expenditure; Capital expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH B CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AN D SHRI GEORGE MATHAN, JUDICIAL MEMBER .. I.T.A. NO. 949/MDS/2009 ASSESSMENT YEAR : 2006-07 SHRI M. M. PHILIP, NO.29, COLLEGE ROAD, NUNGAMBAKKAM, CHENNAI-600 034. V. THE DEPUTY COMMISSIONER OF INCOME-TAX, MEDIA CORCLE-I(I/C), CHENNAI. (PAN: AAAPP7735M) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SAROJ KUMAR PARIDA RESPONDENT BY : SHRI P.B. SEKARAN O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LEARNED CIT(APPEALS)-VI, CHENNAI IN ITA NO. 89/08-09 DATED 18-03-2009 FOR THE ASSESSMENT YEAR 2006-07. 2. SHRI SAROJ KUMAR PARIDA, ADVOCATE REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI P.B.SEKARAN, LEARNED CIT-DR REPRESENTED ON BEHALF OF THE REVENUE. 3. IT WAS SUBMITTED BY THE LEARNED AUTHORISED REPRE SENTATIVE THAT THE LEARNED CIT(A) IN REGARD TO THE ISSUE OF THE REPLAC EMENT OF THE CABLES FOR THE HOME DISTRIBUTION OF CABLE TV, THE RF AMPLIFIERS, F IBER OPTIC NODES, CONNECTORS, I.T.A. NO.949/MDS/2009 2 SPLITTERS AND JUNCTION BOXES HAD RESTORED THE ISSUE TO THE FILE OF THE ASSESSING OFFICER TO RE-ADJUDICATE AND VERIFY AS TO WHETHER T HE LIFE SPAN OF THE SAID EQUIPMENTS WAS LESS THAN 12 MONTHS AND IF SO TO TRE AT THE EXPENDITURE AS REVENUE EXPENDITURE. IT WAS THE SUBMISSION THAT TH E ISSUE AS TO WHETHER THE INDIVIDUAL ITEMS COST WAS LESS THAN ` 5000/- WAS NOT DIRECTED TO THE ASSESSING OFFICER. IT WAS THE SUBMISSION THAT THAT IF THE CO ST OF THE INDIVIDUAL ITEMS IS LESS THAN ` 5000/- THE CLAIM OF THE ASSESSEE OF REVENUE EXPEND ITURE IS LIABLE TO BE ALLOWED. IT WAS THE PRAYER THAT THE DIRECTION OF T HE LEARNED CIT(A) MAY BE MODIFIED TO DIRECT THE ASSESSING OFFICER TO CONSIDE R AS TO WHETHER THE EXPENDITURE OF EACH ITEM WAS LESS THAN ` 5000/- AND IF IT WAS LESS THAN ` 5000/- TO ALLOW THE SAME AS REVENUE EXPENDITURE. 4. IN REPLY, THE LEARNED DR VEHEMENTLY SUPPORTED TH E ORDERS OF THE ASSESSING OFFICER AND THE LEARNED CIT(A). IT WAS T HE SUBMISSION THAT THE ISSUE HAD ALREADY BEEN RESTORED TO THE FILE OF THE ASSESS ING OFFICER. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE ORDER OF THE LEARNED CIT(A) SHOWS THAT THE ASSESSEE HAD RAISED T HE ARGUMENT IN PARA 5 THAT THE COST OF THE UNIT OF ITEMS IS LESS THAN ` 5000/-. HOWEVER IN PARA 5.2 OF THE ORDER OF THE LEARNED CIT(A), HE HAS ONLY DIRECTED T HE ASSESSING OFFICER TO CALL FOR THE DETAILS OF THE EQUIPMENTS AND AFTER VERIFICATIO N ALLOW THE EXPENDITURE WHICH IS PROVED TO HAVE A LIFE SPAN OF LESS THAN 12 MONTH S AND FOR THE REMAINDER HE HAS PERMITTED THE ASSESSING OFFICER TO CAPITALIZE T HE SAME AND ALLOW DEPRECIATION I.T.A. NO.949/MDS/2009 3 AS PER THE INCOME-TAX RULES, 1962. AS IT IS NOTICE D THAT THE ASSESSEE HAS RAISED THE ISSUE THAT THE UNIT COST OF EACH OF THE ITEMS I S LESS THAN ` 5000/- AND AS IT IS NOTICED THAT THE LEARNED CIT(A) HAS NOT GIVEN ANY D IRECTION IN REGARD TO THIS ISSUE, WE ARE OF THE VIEW THAT THE ORDER OF THE LEA RNED CIT(A) REQUIRES MODIFICATION INSOFAR AS THE ISSUE IS RESTORED TO TH E FILE OF THE ASSESSING OFFICER FOR RE-ADJUDICATION AND ALLOW THE EXPENDITURE AS REVENU E EXPENDITURE IF THE UNIT COST OF EACH OF THE ITEMS IS FOUND TO BE LESS THAN ` 5000/- OR IF THE LIFE SPAN OF EACH OF THE UNIT ITEMS IS LESS THAN 12 MONTHS. SUCH ITE MS WHOSE COST EXCEEDS ` 5000/- AND WHOSE LIFE SPAN IS MORE THAN 12 MONTHS, SHALL BE TREATED BY THE ASSESSING OFFICER AS CAPITAL EXPENDITURE AND DEPREC IATION ALLOWED ON THE SAME. IN THE CIRCUMSTANCES, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 6. THE ORDER WAS PRONOUNCED IN THE COURT ON 04-02-2 011. SD/- SD/- (AABRAHAM P. GEORGE) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 04 TH FEBRUARY, 2011. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE