The DCIT, Bharuch Circle, Bharuch V. M/s. Enviro Technology Ltd., Ankleshwar

MA 90/AHD/2012

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 8888 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 20 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 21-09-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 13-07-2012
• Assessment Year: 1999-2000
• Appeal Filed On: 01-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B L YADAV SRDR
• Assessee Lawyers: MRS URVASHI SHODHAN
• Keywords: Depreciation; Bad and doubtful debts

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A AHMEDABAD BEFORE SHRI A.K.GARODIA, ACCOUNTANT MEMBER AND KUL BHARAT, JUDICIAL MEMBER / MISC. APPLICATION NO.90-91 /AHD/2012 (A/O ITA NO.734/AHD/2007 & 3835/AHD/2008) / // / ASSESSMENT YEAR: - 1999-00 ACIT, BHARUCH CIRCLE, BHARUCH DCIT, BHARUCH CIRCLE, BHARUCH / V/S . / V/S . ENVIRO TECHNOLOGY LIMITED, 117/118, GIDC, ANKLESHWAR, [ PAN NO.AAACE 4126G ] ENVIRO TECHNOLOGY LTD., ANKLESHWAR . (APPELLANT) .. (RESPONDENT) // /BY ASSESSEE MRS. URVASHI SHODHAN, AR /BY REVENUE SHRI B. L. YADAV, SR-DR !' /DATE OF HEARING 13-07-2012 #$ !' /DATE OF PRONOUNCEMENT 21-09-2012 % % % % / // / ORDER PER KUL BHARAT, JUDICIAL MEMBER:- BOTH THE MISCELLANEOUS APPLICATIONS (MA) ARE FILED BY THE REVENUE POINTING OUT CERTAIN MISTAKES IN COMBINED TRIBUNAL S ORDER IN ITA NO.734/AHD/2007 AND ITA NO. 3835/AHD/2008 RESPECTIV ELY. 2. IN MA NO. 90/AHD/2012, IT HAS BEEN CONTENDED BY THE REVENUE THAT THE TRIBUNAL HAS DECIDED THIS ISSUE REGARDING PROVISION S MADE FOR SLUDGE DISPOSAL CHARGES BUT THE GROUND OF APPEAL REGARDING DISALLOW ANCE OF SLUDGE FEASIBILITY CHARGES OF RS.2 LAKH OUT OF SLUDGE DISPOSAL CHARGES BEING EXPENDITURE OF MA NO.90-91/AHD/2012 M/S ENVIRO TECHNOLOGY LTD. V. ACIT BHARUCH PAGE 2 CAPITAL IN NATURE WAS INADVERTENTLY NOT DECIDED BY THE TRIBUNAL IN THE IMPUGNED ORDER. 3. LD. DEPARTMENTAL REPRESENTATIVE OF THE REVENUE R EITERATED THE SAME ARGUMENTS WHICH ARE RAISED BY THE REVENUE IN MA. IN REPLY, IT WAS SUBMITTED BY LD. AR OF THE ASSESSEE THAT THE TRIBUNAL ORDER M AY BE RECALLED TO THE EXTENT TO DECIDE THE ISSUE REGARDING DISALLOWANCE O F RS.2 LAKH MADE BY THE ASSESSING OFFICER (AO) IN RESPECT OF SLUDGE FEASIBI LITY CHARGES OUT OF SLUDGE DISPOSAL CHARGES ON THE BASIS THAT THE SAME IS CAPI TAL EXPENDITURE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND GON E THROUGH THE IMPUGNED ORDER AND FIND THAT AS PER PARA-10 OF THE IMPUGNED ORDER OF TRIBUNALS ORDER, THIS ISSUE WAS DECIDED BY THE TRI BUNAL IN FAVOUR OF ASSESSEE THAT DEDUCTION IS ALLOWABLE TO THE ASSESSEE U/S.37 OF THE IT ACT IN RESPECT OF PROVISIONS FOR SLUDGE DISPOSAL CHARGES. BUT IT WAS LEFT TO BE DECIDED AS TO WHETHER PART OF THIS TOTAL AMOUNT BEING OF RS.2 LAK HI RELATING TO SLUDGE FEASIBILITY CHARGES WAS ALLOWABLE OR NOT THIS ASPEC T IS NOT DECIDED BY THE TRIBUNAL IN THE IMPUGNED ORDER OF THE TRIBUNAL. WE RECALL THE TRIBUNAL ORDER TO THE LIMITED EXTENT TO DECIDE THIS ASPECT OF THE MAT TER AS TO WHETHER DEDUCTION IS ALLOWABLE TO THE ASSESSEE IN RESPECT OF SLUDGE F EASIBILITY CHARGES OF RS.2 LAKHS OUT OF SLUDGE DISPOSAL CHARGES BEING OF CAPIT AL NATURE AS ALLEGED BY THE AO. 5. IN THE RESULT, MA FILED BY REVENUE STANDS ALLOWE D AS INDICATED ABOVE. 6. IN MA 91/AHD/2012, IT IS CONTENDED BY THE REVENU E THAT TRIBUNAL HAS DELETED THE PENALTY IMPOSED BY THE ASSESSING OFFICE R U/S. 271(1) OF THE ACT ON THIS BASIS, THAT WHILE DECIDING THE ISSUE IN QUA NTUM PROCEEDINGS REGARDING CAPITAL SUBSIDY, THE ISSUE WAS DECIDED IN FAVOUR OF ASSESSEE AND HENCE, THE PENALTY DOES NOT SURVIVE. MA NO.90-91/AHD/2012 M/S ENVIRO TECHNOLOGY LTD. V. ACIT BHARUCH PAGE 3 7. IT IS SUBMITTED BY LD. DR THAT THERE IS ONE MORE ISSUE REGARDING ISSUE OF ADJUSTMENT IN THE BOOK PROFIT IN RESPECT OF THE PRO VISIONS DOUBTFUL DEBTS AMOUNTING TO RS.601265/- AS UNCERTAINED LIABILITY O N WHICH ALSO PENALTY WAS LEVIED BY THE ASSESSING OFFICER. THIS ISSUE WAS DEC IDED BY THE TRIBUNAL IN FAVOUR OF THE REVENUE IN QUANTUM APPEAL BUT THERE I S NO DISCUSSION REGARDING PENALTY ON THIS ASPECT IN DISPOSAL OF PENALTY APPEA L I.E. ITA NO.3835/AAHD/2008 WHILE DELETING THE PENALTY. THERE FORE, THIS IS AN APPARENT MISTAKE IN THE TRIBUNALS ORDER AND IT SHOULD BE RE CTIFIED. 8. LD. DR OF THE REVENUE REITERATED THE SAME CONTEN TIONS WHICH ARE RAISED BY THE REVENUE IN MA, WHEREAS IT IS SUBMITTE D BY LD. AR OF THE ASSESSEE THAT THERE IS NO MISTAKE IN THE TRIBUNALS ORDER ON THIS ASPECT. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND GON E THROUGH THE IMPUGNED ORDER AND MATERIAL AVAILABLE ON RECORD. WE FIND THAT ONLY ONE GROUND RAISED BY THE REVENUE IN ITA NO.3835/AHD/200 8 WHICH READS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE C.I.T.(A) HAS ERRED IN LAW IN CANCELING THE ORDER LEVYING PEN ALTY OF RS.15,64,180/- U/S. 271(1)(C) OF THE I T ACT WHILE TACITLY ADMITTING THAT THE FAILURE OF THE ASSESSEE TO REDUCE CAPITAL SUBSIDY OF RS.131.20 LAKHS FROM THE COST OF ASSETS WAS CLEARLY IN VIOLATION OF PROVISIONS OF LAW EXTANT AT THE RELEVANT POINT OF T IME. 10. WE FIND THAT ALTHOUGH THE PENALTY WAS IMPOSED B Y THE ASSESSING OFFICER U/S. 271(1) OF THE ACT IN RESPECT OF TWO ADDITIONS I.E. ADDITION OF RS.6,01,265/- IN RESPECT OF PROVISIONS FOR DOUBTFUL DEBTS AND IN RESPECT OF EXCESS DEPRECIATION CLAIMED BY THE ASSESSEE WITHOUT REDUCI NG THE CAPITAL SUBSIDY RECEIVED FROM THE STATE GOVERNMENT OF RS.131.02 LAK H FROM THE COST OF ASSETS. ALTHOUGH LD. CIT(A) HAS DELETED THE PENALTY ON BOTH THE ISSUES BUT AS PER THE GROUND RAISED BY THE REVENUE BEFORE THE TRI BUNAL AS REPRODUCED ABOVE. THE GROUND RAISED IS ONLY WITH REGARD TO FAI LURE OF ASSESSEE TO REDUCE CAPITAL SUBSIDY OF RS.131.02 LAKHS FROM THE COST OF ASSETS. THERE IS NO GROUND MA NO.90-91/AHD/2012 M/S ENVIRO TECHNOLOGY LTD. V. ACIT BHARUCH PAGE 4 RAISED REGARDING DELETION OF PENALTY IN RESPECT OF PROVISIONS FOR BAD DEBTS DEBITED BY ASSESSEE IN PROFIT AND LOSS ACCOUNT AND THOUGH REDUCING BOOK PROFIT. UNDER THESE FACTS, WE DO NOT FIND ANY APPAR ENT MISTAKE IN THE IMPUGNED ORDER OF THE TRIBUNAL AND THEREFORE, THIS MA NO. 91 /AHD/2012 IS REJECTED. 10. IN THE RESULT, ONE OF THE MA OF REVENUE NO. 90/AHD/ 2012 IS ALLOWED AS INDICATED ABOVE, WHEREAS SECOND MA NO. 91/AHD/20 12 IS DISMISSED. ORDER PRONOUNCED ON THE DATE MENTIONED HEREINABOVE AT CAPTION PAGE . SD/- SD/- (A..K. GARODIA) ( .KUL BHARAT) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) & '(- 21/09/2012 . / *DKP % % % % 0 0 0 0 1 1 1 1 / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. 034 / RESPONDENT 3. '' 4 46 / CONCERNED CIT 4. 4 46- / CIT (A) 5. 9 :4 0 , 4 4 , . / DR, ITAT, AHMEDABAD 6. : = > ? / GUARD FILE. BY ORDER/ % , /TRUE COPY/ @/. 4 ' 4 4 , . / STRENGTHEN PREPARATION & DELIVERY O F ORDERS IN THE ITAT 1) DATE OF TAKING DICTATION 20/09 2) DIRECT DICTATION BY MEMBER STRAIGHT ON COMPUTER/LAPTOP/DRAGON DICTATE NO 3) DATE OF TYPING & DRAFT ORDER PLACE BEFORE MEMBER 20/09 4) DATE OF CORRECTION 20/09 5) DATE OF FURTHER CORRECTION 6) DATE OF INITIAL SIGN BY MEMBERS 20/09 7) ORDER UPLOADED ON 21/09 8) ORIGINAL DICTATION PAD-PART HAS BEEN ENCLOSED IN THE FILE YES 9) FINAL ORDER AND 2 ND COPY SEND TO BENCH CLERK ON 21/09