M/s The Andhra Sugars Ltd, Tanuku V. The Addl CIT Rajahmundry, Rajahmundry

MA 36/VIZ/2011

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 7098 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 29 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 30-08-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 01-08-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: TH L PETER
• Assessee Lawyers: C V K PRASAD
• Section: 14A

Judgement Text

MP 35 36 37 OF 2011/V/2011 ANDHRA SUGARS LTD, TANU KU PAGE 1 OF 9 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER M. A . NO. 35 / VIZAG/20 1 1 (ARISING OUT OF ITA NO.162/VIZAG/2007) ASSESS MENT YEAR: 2004 - 05 THE ANDHRA SUGARS LTD TANUKU VS. ACIT CIRCLE - 1 ELURU (APPELLANT) (RESPONDENT) PAN NO.AAACT 6357Q M.A. NOS.36&37/VIZAG/2011 (ARISING OUT OF ITA NOS.365/V/2008 & 280/V/2009 RES PECTIVELY) ASSESSMENT YEARS: 2005 - 06 & 2006 - 07 RESPE CTIVELY THE ANDHRA SUGARS LTD TANUKU VS. ADDL. CIT, RAJAHMUNDRY (APPELLANT) (RESPONDENT) PAN NO.AAACT 6357Q APPELLANT BY: SHRI C.V.K. PRASAD, ADVOCATE RESPONDENT BY: SHRI TH.L. PETER, CIT(DR) DATE OF HEARING: 26.08.2011 DATE OF PRONOUNCEMENT: 30.08.2011 ORDER PER SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER : THESE MISCELLANEOUS APPLICATIONS ARE PREFERRED ON BEHALF OF THE ASSESSEE AGAINST THE CONSOLIDATED ORDER OF THE TRIB UNAL DATED 20.1.2011 WITH THE SUBMISSION THAT SOME ERRORS ARE CREPT IN THE OR DER OF THE TRIBUNAL. THEREFORE, RECTIFICATION IS REQUIRED THEREIN. SOME COMMON ERRORS ARE POINTED OUT IN ALL THESE MISCELLANEOUS APPLICATIONS. THERE FORE, THEY WERE HEARD TOGETHER. WE HOWEVER, PREFER TO ADJUDICATE THESE M ISCELLANEOUS APPLICATIONS ONE AFTER THE OTHER. M.P. NO.35/VIZAG/2011: 2. THROUGH THIS MISCELLANEOUS APPLICATION, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT IN PARA NO.36 AT PAGE N O.24 OF THE ORDER OF THE TRIBUNAL, THE TRIBUNAL HAS EXTRACTED PARA NO.6.1 OF THE ORDER OF THE CIT(A), MP 35 36 37 OF 2011/V/2011 ANDHRA SUGARS LTD, TANU KU PAGE 2 OF 9 WHEREAS THIS EXTRACTION IS NOT RELEVANT TO THE ISSU E IN DISPUTE BEING DEALT IN THIS PARA OF THE ORDER. IN THIS PARA, THE TRIBUNAL HAS ADJUDICATED THE ISSUE OF DISALLOWANCE OF PROPORTIONATE EXPENDITURE U/S 14A O F THE ACT, WHEREAS IN THE EXTRACTED PORTION, THE ISSUE DISCUSSED BY THE CIT(A ) WAS WITH REGARD TO THE SET OFF OF THE EXPENDITURES AGAINST THE INTEREST IN COME EARNED BY THE ASSESSEE. THEREFORE, THIS EXTRACTION OF THE ORDER OF THE CIT(A) REQUIRE TO BE DELETED FROM THIS PARA. THE LD. D.R. DID NOT OBJEC T THIS ARGUMENT. 3. ON CAREFUL PERUSAL OF THE ORDER OF THE TRIBUNAL VIS--VIS THE MISCELLANEOUS PETITION, WE FIND FORCE IN THE CONTEN TION OF THE ASSESSEE THAT THE EXTRACTED PORTION IS NOT RELEVANT TO THE CONTRO VERSY DISCUSSED IN PARA NO.36 OF THE ORDER OF THE TRIBUNAL. THIS MISTAKE H AS CREPT INADVERTENTLY IN THE ORDER OF THE TRIBUNAL AND THE WRONG PORTION OF THE ORDER OF THE CIT(A) WAS EXTRACTED IN THIS PARA. WHEREAS, THE DISCUSSIO N OF THE CIT(A) IN HIS ORDER IN PARA NO.2.3 WAS REQUIRED TO BE EXTRACTED. WE TH EREFORE, SUBSTITUTE THE EXTRACTED PORTION OF THE ORDER OF THE CIT(A) IN PAR A NO.36 BY THE FOLLOWING PORTION OF THE CIT(A)S ORDER IN PARA NO.2.3: AFTER HEARING THE LEARNED AUTHORIZED REPRESENTATIV E AND ON A CAREFUL CONSIDERATION OF THE FACTS RELATING TO THE ISSUE, T HE FOLLOWING OBSERVATIONS MADE AND DECISIONS TAKEN:- (I) ALTHOUGH THE LEGISLATURE HAS RECOGNIZED THE NEED FO R DETERMINING EXPENDITURES RELATABLE TO EXEMPTED INCO ME LIKE DIVIDENDS ETC., WITH PROSPECTIVE EFFECT FROM THE AS SESSMENT YEAR 2007-08, YET THE UNAMENDED PROVISIONS OF SECTI ON 14A COULD STILL BE MADE APPLICABLE IN RESPECT OF APPROP RIATE CASES WHERE IT IS FOUND THAT THE GROSS EXEMPTED INCOME HA VE BEEN DECLARED WITHOUT REFLECTING ANY EXPENDITURE THEREOF , DEPENDING UPON THE FACTS OF EACH CASE. ADMITTEDLY, NO SEPARA TE BOOKS OF ACCOUNTS HAVE BEEN MAINTAINED IN RESPECT OF EXEMPTE D INCOME IN THE APPELLANTS CASE. HENCE, AS HELD BY THE ASS ESSING OFFICER, CONSIDERING THE HUGE VOLUME OF BUSINESS COVERING VA RIOUS COMPONENTS, IT WOULD BE DIFFICULT ON THE PART OF TH E ASSESSING OFFICER TO CORRELATE EACH AND EVERY INVESTMENT TO T HE CORRESPONDING IDENTIFIABLE LIABILITY. THEREFORE, I N THE CASE OF THE APPELLANT, IT IS NOT ONLY DESIRABLE, BUT ALSO INCUM BENT TO ALLOCATE THE EXPENDITURE ON PRO-RATA BASIS TOWARDS EXEMPTED AND NON EXEMPTED INCOME. HOWEVER, THE BALANCE-SHEET OF THE APPELLANT HAVING REFLECTED RESERVE AND SURPLUS FUNDS FAR EXCE EDING, THE QUANTUM OF INVESTMENTS IN THE SHARES FROM OUT OF WH ICH DIVIDEND INCOME HAD BEEN EARNED YEAR AFTER YEAR, TH E APPELLANT MP 35 36 37 OF 2011/V/2011 ANDHRA SUGARS LTD, TANU KU PAGE 3 OF 9 DESERVES TO BE GIVEN THE BENEFIT OF DOUBT IN SUPPOR T OF ITS CLAIM THAT IT HAD UTILIZED ITS OWN SURPLUS FUNDS, AND NOT INTEREST BEARING BORROWED FUNDS, FOR THE PURPOSE OF INVESTME NTS IN THE SAID SHARES. HENCE, THE DETERMINATION OF PRO-RATA INTEREST EXPENDITURE RELATABLE TO THE DIVIDEND INCOME IS NOT SUSTAINABLE, AND, THEREFORE, THE SAME IS HEREBY DELETED. (II) ALTHOUGH IT IS ACCEPTABLE THAT THE INVESTMENTS IN T HE SHARES HAD BEEN MADE IN THE EARLIER YEARS, YET THE APPELLANT C ANNOT GET AWAY WITH THE PLEA THAT IT DID NOT INCUR ANY ADMINI STRATIVE AND OTHER GENERAL EXPENDITURES FOR DAY TO DAY MANAGEMEN T AND MONITORING OF SUCH INVESTMENTS PORTFOLIO FOR WHICH EXPENDITURE RELATABLE TO SALARIES OF EMPLOYEES, REPAIRS TO ASSE TS AND OTHER RELATED EXPENDITURES COULD BE INEVITABLY ATTRIBUTAB LE. IN THIS VIEW OF THE MATTER, THE ACTION OF THE ASSESSING OFF ICER IN DETERMINING ON PRO-RATA BASIS THE ADMINISTRATIVE AN D OTHER EXPENDITURE (FOR HEAD OFFICE ONLY) IS HEREBY HELD T O BE IN ORDER, NOT REQUIRING ANY DISTURBANCE. HENCE, IN RESPECT O F THIS ISSUE, DISALLOWANCE AND ADDITION TO THE TUNE OF ` 5.91 LAKHS IS, HEREBY, SUSTAINED. 4. THE SECOND MISTAKE POINTED OUT THROUGH THIS APPL ICATION BY THE LD. COUNSEL FOR THE ASSESSEE IS THAT THE TRIBUNAL HAS N OT TAKEN INTO ACCOUNT THE FACT THAT NO EXPENDITURE WAS INCURRED TO EARN THE D IVIDEND INCOME. THEREFORE, THE ORDER OF THE TRIBUNAL REQUIRES RECTI FICATION. 5. THE LD. D.R. ON THE OTHER HAND HAS SUBMITTED THA T TRIBUNAL HAS ADJUDICATED THE IMPUGNED ISSUE I.E. DISALLOWANCE OF PROPORTIONATE EXPENDITURE U/S 14A OF THE I.T. ACT AND HAVING DWEL T UPON THE CONTENTIONS OF THE ASSESSEES, THE TRIBUNAL HAS TAKEN A VIEW THAT D ISALLOWANCE MADE BY THE LOWER AUTHORITIES ARE PROPER. SINCE THE TRIBUNAL H AS TAKEN A DECISION HAVING CONSIDERED THE RIVAL SUBMISSIONS, THE VIEW OF THE T RIBUNAL CANNOT BE REVISED UNDER THE GARB OF THE RECTIFICATION. 6. HAVING CAREFULLY EXAMINED THE ORDER OF THE TRIBU NAL, VIS--VIS MISCELLANEOUS APPLICATION, WE FIND THAT IN PARA NOS .35 TO 37, TRIBUNAL HAS EXAMINED THIS ISSUE IN DETAIL IN THE LIGHT OF RIVAL SUBMISSIONS. THE CONTENTIONS RAISED BY THE ASSESSEE THAT HE HAS NOT INCURRED ANY EXPENDITURE IN RECEIPT OF DIVIDEND INCOME WAS ALSO CONSIDERED BY THE TRIBUNAL . HAVING EXAMINED THE ORDER OF THE CIT(A) , THE TRIBUNAL HAS TAKEN A VIEW THAT NO INTERFERENCE IS CALLED FOR IN THE DISALLOWANCES MADE BY THE LOWER A UTHORITIES. SINCE THE MP 35 36 37 OF 2011/V/2011 ANDHRA SUGARS LTD, TANU KU PAGE 4 OF 9 TRIBUNAL HAS TAKEN A PARTICULAR VIEW AFTER HAVING G IVEN A THOUGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS, THE VIEW TA KEN CANNOT BE REVIEWED UNDER THE GARB OF RECTIFICATION. WE THEREFORE, FIN D NO MERIT IN THIS REQUEST OF THE ASSESSEES. ACCORDINGLY, WE DECLINE TO INTERFER E WITH THE ORDER OF THE TRIBUNAL. 7. NEXT DEFECT POINTED OUT BY THE LD. COUNSEL FOR T HE ASSESSEE IS THAT TRIBUNAL HAS WRONGLY MADE AN OBSERVATION THAT ASSES SEE HAS NOT SOLD THE POWER TO OTHER UNITS ON MARKET PRICE, WHEREAS, THE ASSESSEE HAS CATEGORICALLY STATED BEFORE THE TRIBUNAL THAT THE POWER WAS TRANS FERRED/SOLD TO ITS OTHER UNITS ON MARKET PRICE. IN SUPPORT OF HIS CONTENTIO N, HE HAS PLACED THE BILLS ISSUED BY EASTERN POWER DISTRIBUTION COMPANY AND TH E RATES ON WHICH POWER WERE TRANSFERRED TO OTHER UNITS. THE LD. D.R. ON T HE OTHER HAND HAS SUBMITTED THAT TRIBUNAL HAS NOT GIVEN ANY FINDINGS ON THIS ISSUE AND HAS SIMPLY REMANDED THE MATTER TO THE ASSESSING OFFICER FOR RE-ADJUDICATION IN THE LIGHT OF SUBMISSIONS OF THE ASSESSEES. 8. WE HAVE CAREFULLY EXAMINED THE ORDER OF THE TRIB UNAL VIS--VIS THIS MISCELLANEOUS APPLICATION AND WE FIND THAT TRIBUNAL HAS NOT GIVEN A SPECIFIC FINDING WITH REGARD TO THE ALLOCATION OF EXPENSES A ND HAS REMANDED THE MATTER BACK TO THE A.O. WITH CERTAIN DIRECTIONS. S INCE THE MATTER IS SUBJUDICE WITH THE A.O., THE ARGUMENTS OF THE ASSESSEE THAT T HE POWERS WERE TRANSFERRED/SOLD ON MARKET PRICE TO ITS OTHER UNITS CAN ALSO BE EXAMINED. THE ASSESSEE HAS AN OBJECTION WITH THE OBSERVATIONS OF THE TRIBUNAL THAT THE POWER WAS NOT TRANSFERRED ON THE MARKET PRICE. WE, HOWEVER, OF THE VIEW THAT THE SUBMISSION OF THE ASSESSEES SHOULD BE RECO RDED IN THE ORDER. WE, ACCORDINGLY, MODIFY THE OBSERVATION IN THIS REGARD AND TO GIVE A PROPER MEANING OF THE ASSESSEES CONTENTION, WE REMOVE THE WORD NOT USED IN THE 8 TH LINE OF THE PARA NO.50 OF THE ORDER AND BY REMOVIN G THIS WORD NOT, THE MEANING OF THE SENTENCE WOULD BE THAT ASSESSEE HAS SOLD THE POWER TO OTHER UNITS ON MARKET PRICE. ACCORDINGLY, THIS MISCELLAN EOUS APPLICATION IS DISPOSED OF. MP 35 36 37 OF 2011/V/2011 ANDHRA SUGARS LTD, TANU KU PAGE 5 OF 9 M.P. NO.36/VIZAG/2011: 9. IN THIS MISCELLANEOUS APPLICATION, FIRST TWO ERR ORS ARE RAISED WITH REGARD TO THE FINDING OF THE TRIBUNAL IN RESPECT OF DISALL OWANCE OF PROPORTIONATE EXPENDITURE U/S 14A AND REDUCTION OF CLAIM FOR DEDU CTION U/S 80IA OF THE ACT. BOTH THESE ISSUES HAVE ALREADY BEEN ADJUDICATED BY US IN THE FOREGOING MISCELLANEOUS PETITION. THEREFORE, NO FRESH ADJUDI CATION IS CALLED FOR. 10. THE NEXT ERROR POINTED OUT IN THE ORDER OF THE TRIBUNAL IS THAT THE TRIBUNAL HAS REPEATED THE REPRODUCTION OF GROUND NO S.5 & 6 OF THE ORDER OF THE TRIBUNAL. THEREFORE, THE REPEATED PARAS MAY BE DELETED. THE LD. D.R. DID NOT RAISE ANY OBJECTION TO THIS FACT. WE HAVE CAREFULLY EXAMINED THE ORDER OF THE TRIBUNAL VIS--VIS THE MISCELLANEOUS APPLICA TION AND WE FIND FORCE IN THE CONTENTION OF THE ASSESSEES. WE HAVE ALSO OBSERVE D THAT AT PAGE NO.36, THE GROUND NO.6 IS NOT PROPERLY REPRODUCED, WHEREAS IN PAGE NO.36 IT IS PROPERLY REPRODUCED. WE THEREFORE, IN ORDER TO MAKE IT MORE CLEAR, DELETE THE GROUND NOS.5 & 6 REPRODUCED IN THE PAGE NO.36 OF THE ORDER OF THE TRIBUNAL. THE GROUND NOS.5 & 6 REPRODUCED IN PAGE NO.37 WILL ONLY REMAIN IN THE ORDER OF THE TRIBUNAL. 11. NEXT ERROR POINTED OUT IN THE ORDER OF THE TRIB UNAL THAT TRIBUNAL HAS ADJUDICATED THE ISSUE OF DISALLOWANCE OF REPAIRS IN SUGAR DIVISION BHIMADOLE AMOUNTING TO ` 52,49,207/- AS CAPITAL IN NATURE FOLLOWING ITS ORD ER FOR THE ASSESSMENT YEAR 2004-05, WHEREAS, IN THE IMPUGNED A SSESSMENT YEAR, THE PRODUCTION OF THE UNIT WAS STARTED AND IS NOT PROPE R TO HOLD THAT PRODUCTION WAS NOT COMMENCED FOLLOWING THE ORDER FOR A.Y. 2004 -05 IN WHICH THE SUGAR UNIT WAS PURCHASED. 12. THE LD. D.R. ON THE OTHER HAND HAS SUBMITTED TH AT NOTHING IS BORNE OUT FROM THE ORDER OF THE LOWER AUTHORITIES IN THIS REGARD THAT PRODUCTION WAS COMMENCED IN THIS YEAR. THE UNIT WAS PURCHASED IN THE ASSESSMENT YEAR 2004-05 AND THE ASSESSEE HAS UNDERTAKEN THE REMODEL ING, MODIFICATION AND RENOVATIONS OF THE BUILDINGS THAT TOO AFTER OBTAINI NG THE EXPERT ADVICE OF MP 35 36 37 OF 2011/V/2011 ANDHRA SUGARS LTD, TANU KU PAGE 6 OF 9 CONSULTANT FROM GERMANY FOR MODIFICATION OF THE LAY OUT OF THE EXISTING FACTORY BUILDING AND PLANT AND MACHINERY. NO EVIDE NCE WAS PLACED ON RECORD AS TO WHEN THE PRODUCTION WAS COMMENCED. THEREFORE , THE TRIBUNAL FOLLOWING ITS EARLIER ORDER FOR THE ASSESSMENT YEAR 2004-05 HAS TREATED THE EXPENDITURE TO BE OF CAPITAL IN NATURE AND DISALLOW ED THE CLAIM OF THE ASSESSEES. 13. WE HAVE CAREFULLY PERUSED THE ORDER OF THE TRIB UNAL VIS--VIS THE MISCELLANEOUS APPLICATION AND WE FIND THAT IN THE E ARLIER YEAR I.E. 2004-05, THE SUGAR UNIT BHIMADOLE WAS ACQUIRED BY THE ASSESS EE AND IN THIS YEAR, A SUBSTANTIAL AMOUNT WAS INCURRED ON ITS REMODELING A ND MODIFICATION OF THE ASSETS. NOTHING WAS AVAILABLE FROM THE ORDER OF TH E LOWER AUTHORITIES THAT ASSESSEE HAS STARTED THE PRODUCTION IN THE IMPUGNED ASSESSMENT YEAR. ADMITTEDLY, THE SUGAR UNIT BEING A SICK UNIT WAS PU RCHASED BY THE ASSESSEES AND IN THE FIRST YEAR NO PRODUCTION WAS STARTED AND IN SUBSEQUENT YEAR, THE ASSESSEE HAS UNDERTAKEN REMODELING, MODIFICATION AN D RENOVATION OF BUILDING AFTER TAKING EXPERT ADVICE OF CONSULTANT FROM GERMA NY. WHEN THE ENTIRE UNIT WAS UNDER RENOVATION, IT IS HARDLY TO ACCEPT THAT T HE PRODUCTION WAS STARTED. THE TRIBUNAL HAS TAKEN INTO ACCOUNT ALL THESE ASPEC TS WHILE ADJUDICATING THE ISSUE. THEREFORE, WE FIND NO ERROR IN THE ORDER OF THE TRIBUNAL. MOREOVER, VIEW TAKEN BY THE TRIBUNAL IN THE LIGHT OF RIVAL SU BMISSIONS CANNOT BE REVIEWED UNDER THE GARB OF RECTIFICATION. THEREFOR E, WE FIND NO MERIT IN THE SUBMISSIONS OF THE ASSESSEES. ACCORDINGLY, THIS MI SCELLANEOUS APPLICATION NO.36 IS DISPOSED OF. M.P. NO.37/VIZAG/2011: 14. IN THIS MISCELLANEOUS APPLICATION, FIRST TWO ER RORS ARE POINTED OUT WITH REGARD TO THE DISALLOWANCE OF PROPORTIONATE EXPENDI TURE U/S 14A AND REDUCTION OF CLAIM OF DEDUCTION U/S 80IA OF THE ACT . BOTH THESE ISSUES HAVE ALREADY BEEN ADJUDICATED BY US IN FOREGOING M.AS. WE THEREFORE, FIND NO JUSTIFICATION TO RE-ADJUDICATE IT AGAIN IN THIS M.A . MP 35 36 37 OF 2011/V/2011 ANDHRA SUGARS LTD, TANU KU PAGE 7 OF 9 15. NEXT ERROR IS POINTED OUT WITH REGARD TO THE DI SALLOWANCE OF REPAIRS IN SUGAR DIVISION BHIMADOLE AMOUNTING TO ` 17,70,215/- AND ` 13,96,010/- WITH THE SUBMISSION THAT THIS GROUND WAS ADJUDICATED BY THE TRIBUNAL FOLLOWING ITS ORDER FOR THE ASSESSMENT YEAR 2004-05. WHEREAS, TH E PRODUCTION WAS STARTED IN THE IMPUGNED ASSESSMENT YEAR. THE LD. D.R. ON T HE OTHER HAND HAS SUBMITTED THAT IN THIS YEAR ALSO, THE ASSESSEE HAS INCURRED A SUBSTANTIAL AMOUNT OF EXPENDITURE IN RENOVATION AND REMODELING OF THE SUGAR DIVISION. THEREFORE, THE EXPENDITURE INCURRED CANNOT BE CALLE D TO BE OF REVENUE IN NATURE. HE HOWEVER, SUBMITTED THAT WAS NOTHING AVA ILABLE FROM THE ORDERS OF LOWER AUTHORITIES THAT IN THIS YEAR, THE ASSESSEE H AS STARTED THE PRODUCTIONS. 16. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFUL LY PERUSED THE ORDER OF THE TRIBUNAL VIS--VIS THE MISCELLANEOUS APPLICA TION OF THE ASSESSEE AND WE FIND THAT THE ASSESSEE HAS ACQUIRED THE SUGAR UNITS IN THE ASSESSMENT YEAR 2004-05 AND IN THAT YEAR THE CLAIM OF SETTING OFF O F EXPENDITURE AGAINST THE INTEREST INCOME WAS DISALLOWED FOR THE REASONS THAT THE ASSESSEE HAS NOT COMMENCED ITS PRODUCTION. FROM NEXT ASSESSMENT YEA R, ASSESSEE HAD UNDERTAKEN REMODELING, RENOVATING THE ENTIRE SUGAR DIVISION AND INCURRED A SUBSTANTIAL AMOUNT OF EXPENDITURE. THE NATURE OF E XPENDITURE WAS CONSIDERED BY THE CIT(A) AND SINCE IT WAS FOUND TO BE OF CAPITAL IN NATURE, IT WAS DISALLOWED. BEFORE THE LOWER AUTHORITIES, NO E VIDENCE WAS FILED WHETHER THE PRODUCTION WAS COMMENCED EITHER IN THE ASSESSME NT YEAR 2005-06 OR 2006-07. IN THE YEAR 2006-07 ASSESSEE HAS ALSO INC URRED THE SUBSTANTIAL AMOUNT IN RENOVATION OF THE SUGAR DIVISION AND NO E VIDENCE WAS PLACED BEFORE THE LOWER AUTHORITIES WHETHER IT HAS COMMENC ED ITS PRODUCTION OR NOT. MOREOVER, THE CIT(A) HAS EXAMINED THE NATURE OF EXP ENDITURE AND FOUND IT TO BE CAPITAL IN NATURE. ALL THESE ASPECTS WERE EXAMI NED BY THE TRIBUNAL WHILE CONFIRMING THE DISALLOWANCE. THE FACTUM REGARDING T HE COMMENCEMENT OF PRODUCTION HAS NOT BEEN BORNE OUT FROM THE ORDER OF THE LOWER AUTHORITIES. THEREFORE, THE TRIBUNAL FOLLOWING ITS ORDER FOR THE ASSESSMENT YEAR 2004-05 CONFIRMED THE DISALLOWANCE. WE HAVE ALSO EXAMINED THE NATURE OF EXPENDITURE INCURRED BY THE ASSESSEES AND WE FIND T HAT CIT(A) IS JUSTIFIED IN HOLDING THAT THE EXPENDITURES ARE OF CAPITAL IN NAT URE. SINCE THE TRIBUNAL HAS TAKEN A PARTICULAR VIEW AFTER GIVING A THOUGHTFUL C ONSIDERATION TO THE RIVAL MP 35 36 37 OF 2011/V/2011 ANDHRA SUGARS LTD, TANU KU PAGE 8 OF 9 SUBMISSIONS, THE VIEW TAKEN BY THE TRIBUNAL CANNOT BE REVIEWED UNDER THE GARB OF RECTIFICATION. WE THEREFORE, FIND NO MERIT IN THE MISCELLANEOUS APPLICATION OF THE ASSESSEES IN THIS REGARD. 17. NEXT ERROR POINTED OUT BY THE LD. COUNSEL FOR T HE ASSESSEE IS THAT AT PAGE NO.46 OF THE ORDER OF THE TRIBUNAL UNDER THE H EADING SUGAR DIVISION AT TANUKU, THE AMOUNT MENTIONED WITH RESPECT TO THE IT EM 1 TO 18 AT PAGE NO.19 OF THE ASSESSMENT ORDER IS ` 11,28,236/-, WHEREAS, THE CORRECT FIGURE IS ` 1,16,20,789/-. THIS CORRECTION IN THE FIGURE WAS POINTED OUT DURING THE COURSE OF HEARING OF THE APPEAL BUT NO COGNIZANCE W AS TAKEN BY THE TRIBUNAL WHILE ADJUDICATING THE ISSUE. IN SUPPORT OF THE CO RRECT FIGURE, THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE A SSESSMENT ORDER. THE REVENUE HAS AGREED TO THIS ERROR IN THE FIGURE. 18. HAVING CAREFULLY EXAMINED THE TRIBUNALS ORDER VIS--VIS THE MISCELLANEOUS APPLICATION, WE FIND THAT IN THE MEMO OF THE APPEAL THE ASSESSEE HAS GIVEN THIS FIGURE OF ` 11,28,236/- AND THE TRIBUNAL HAS ADOPTED THE SAME. SINCE THE FIGURE IS WRONGLY MENTIONED IN THE ORDER OF THE TRIBUNAL, WE SUBSTITUTE THE SAME BY THE FIGURE ` 1,16,20,789/-. ACCORDINGLY, THE MISCELLANEOUS APPLICATION IS DISPOSED OF. 19. IN THE RESULT, THE MISCELLANEOUS APPLICATIONS O F THE ASSESSEES ARE PARTLY ALLOWED. PRONOUNCED ACCORDINGLY ON 30.08.2011. SD/ - SD/ - (B R BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM, DATED: 30 TH AUGUST, 2011. MP 35 36 37 OF 2011/V/2011 ANDHRA SUGARS LTD, TANU KU PAGE 9 OF 9 COPY TO 1 THE ANDHRA SUGARS LIMITED, VENKATARAYAPURAM, TANUKU - 534 215. 2 THE ACIT CIRCLE - 1, ELURU 3 THE ADDL. CIT, RAJAHMUNDRY 4 THE CIT, RAJAHMUNDRY 5 THE CIT(A), RAJAHMUNDRY 6 THE DR, ITAT, VISAKHAPATNAM. 7 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM