BASF INDUSTRIES LTD, V. ACIT 9(1),

MA 326/MUM/2011

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 9742 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 28 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 09-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH,C MUMBAI BEFORE RAJENDRA SINGH, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER MA NO : 326/MUM/2011 ARISING OUT OF : ITA NO. 4168/MUM/2009 ASSESSMENT YEAR : 2006-07 M/S. CIBA RESEARCH (INDIA) PRIVATE LIMITED. (THROUGH THEIR SUCCESSORS BASF INDUSTRIES LIMITED) VIBGYOR TOWERS UNIT NO.101, FIRST FLOOR, G. BLOCK, C-62, BANDRA KURLA COMPLEX, BANDRA (EAST), MUMBAI-400 051 PAN NO : AAACC 2425 N ADDL. COMMISSIONER OF INCOME TAX - 9(1) AAYKAR BHAVAN M.K. ROAD, MUMBAI-400 020 (APPLICANT) VS. (RESPONDENT) APPLICANT BY : SHRI MADHUR AGARWAL RESPONDENT BY : SHRI MANOJ KUMAR DATE OF HEARING : 07.12.2012 DATE OF PRONOUNCEMENT : 07.12.2012 ORDER PER RAJENDRA SINGH (AM). THIS MISCELLANEOUS APPLICATION HAS BEEN FILED BY TH E ASSESSEE REQUESTING FOR AMENDMENT OF THE ORDER OF THE TRIBUN AL DATED 27.12.2009 IN ITA NO.4168/MUM/2009 FOR ASSESSMENT YEAR 2006-07. I N THE SAID ORDER THE TRIBUNAL HAD DISMISSED THE APPEAL OF THE ASSESSEE C LAIMING DEDUCTION ON ACCOUNT OF SCIENTIFIC RESEARCH UNDER SECTION 35(I)( IV). THE ASSESSEE HAD ALSO RAISED AN ALTERNATE CLAIM THAT IN CASE DEDUCTION UN DER SECTION 35(I)(IV) WAS NOT ALLOWED, THE SALE PRICE OF THE ASSETS SOLD AMOU NTING TO RS.59,644/- MA NO : 326/MUM/2011 ARISING OUT OF : ITA NO. 4168/MUM/2009 ASSESSMENT YEAR : 2006-07 2 SHOULD NOT BE ADDED WHICH HAD ALREADY BEEN DEDUCTED FROM GROSS BLOCK OF ASSETS BY THE AO. THIS CLAIM HAD ALSO BEEN DISMISSE D BY THE TRIBUNAL. 2. THE LD. AR ARGUED THAT IN CASE DEDUCTION ON ACCO UNT OF CAPITAL EXPENDITURE IS NOT ALLOWED UNDER SECTION 35(I)(IV), THE SALE OF ASSETS CAN NOT BE ADDED TO TOTAL INCOME AND IT WOULD GO TO REDUCE THE WDV OF THE BLOCK OF ASSETS AS PROVISIONS OF SECTION 41(3) WILL NOT BE A PPLICABLE IN SUCH CASES. THERE WAS THUS AN APPARENT MISTAKE WHICH SHOULD BE RECTIFIED. THE LD. DR PLACED RELIANCE ON THE ORDER OF THE TRIBUNAL. 3. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE M ATTER CAREFULLY. THE ASSESSEE IN THE APPEAL HAD RAISED AN ADDITIONAL GRO UND THAT IN CASE DEDUCTION UNDER SECTION 35(I)(IV) WAS NOT ALLOWED IN RESPECT OF ASSET, THE SALE PROCEEDS OF THE ASSET HAVE TO BE REDUCED FROM BLOCK OF ASSET S AND CAN NOT BE ADDED TO THE TOTAL INCOME. THE TRIBUNAL WHILE DISALLOWING TH E CLAIM UNDER SECTION 35(I)(IV) ALSO INADVERTENTLY DISMISSED THE ALTERNAT E CLAIM WHICH IS APPARENTLY ALLOWABLE AS PROVISIONS OF SECTION 41(3) WILL NOT B E APPLICABLE IN CASE DEDUCTION UNDER SECTION 35(I)(IV) WAS NOT ALLOWED. WE, THEREFORE, AMEND THE ORDER DATED 27.12.2010 OF THE TRIBUNAL BY HOLDING T HAT THE SUM OF RS.59,644/- REPRESENTING SALE PROCEEDS WILL NOT BE ADDED TO THE TOTAL INCOME. THIS AMOUNT HAS ALREADY BEEN REDUCED FROM BLOCK OF ASSETS BY THE AO. THE AO IS DIRECTED TO ACT ACCORDINGLY. 4. IN THE RESULT THE MISCELLANEOUS APPLICATION OF T HE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 7.12.2012. SD/- SD/- (VIJAY PAL RAO) JUDICIAL MEMBER (RAJENDRA SINGH) ACCOUNTANT MEMBER MUMBAI, DATED: 7.12.2012. JV. MA NO : 326/MUM/2011 ARISING OUT OF : ITA NO. 4168/MUM/2009 ASSESSMENT YEAR : 2006-07 3 COPY TO: THE APPLICANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR C BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.