M/s. Adithya Ferro Alloys Pvt. Ltd., Karaikal v. ACIT, Thanjavur

CO 79/CHNY/2011 | 2007-2008
Pronouncement Date: 28-07-2011 | Result: Dismissed

Appeal Details

RSA Number 7921723 RSA 2011
Assessee PAN AADCA7425M
Bench Chennai
Appeal Number CO 79/CHNY/2011
Duration Of Justice 2 month(s) 4 day(s)
Appellant M/s. Adithya Ferro Alloys Pvt. Ltd., Karaikal
Respondent ACIT, Thanjavur
Appeal Type Cross Objection
Pronouncement Date 28-07-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 28-07-2011
Assessment Year 2007-2008
Appeal Filed On 24-05-2011
Judgment Text
IN THE INCOME-TAX APPELLATE TRIBUNAL CHENNAI B BENCH CHENNAI. BEFORE SHRI.U.B.S. BEDI J.M. & SHRI. ABRAHAM P. GE ORGE A.M. I.T.A. NOS. 826 AND 827/MDS/2011 ASSESSMENT YEARS: 2007-08 AND 2004-05 THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE I THANJAVUR. VS. M/S. ADITHYA FERRO ALLOYS PVT. LTD. NO.242/2 SURAKUDI VILLAGE THIRUNALLAR KARAIKAL. [PAN:AADCA7425M] (APPELLANT) (RESPONDENT) C.O.NOS. 78 AND 79/MDS/2011 [IN I.T.A. NOS.827 AND 826/MDS/2011] ASSESSMENT YEARS: 2004-05 AND 07-08 M/S. ADITHYA FERRO ALLOYS PVT. LTD. NO.242/2 SURAKUDI VILLAGE THIRUNALLAR KARAIKAL. VS. THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE I THANJAVUR. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI P.B. SEKARAN CIT DR ASSESSEE BY : SHRI M. NARAYANAN ORDER PER BENCH THESE 4 MATTERS COMPRISE OF 2 APPEALS OF THE DEPAR TMENT AND 2 CROSS OBJECTIONS OF THE ASSESSEE FILED AGAINST THE CONSOL IDATED ORDER PASSED BY THE LD. CIT(A) TIRUCHIRAPALLI DATED 10.02.2011 RELEVANT TO THE ASSESSMENT YEARS 2007-08 AND 2004-05 RESPECTIVELY. 2. THESE MATTERS WERE HEARD TOGETHER INVOLVE SOME WHAT SIMILAR ISSUES AND RELATES TO SAME ASSESSEE THEREFORE BEING DISPOSED OFF BY T HIS SINGLE ORDER FOR THE SAKE OF CONVENIENCE. I II I.T.A. NO .T.A. NO .T.A. NO .T.A. NOS SS S. .. .826 826 826 826 - -- -827 & 827 & 827 & 827 & C.O.NOS. C.O.NOS. C.O.NOS. C.O.NOS. 79 7979 79- -- -78 7878 78/MDS/11 /MDS/11 /MDS/11 /MDS/11 2 3. IN 2 SEPARATE ASSESSMENT ORDERS PASSED BY THE A SSESSING OFFICER ON 24.12.2009 FIRST UNDER SECTION 143(3) R.W.S. 263 FOR THE ASSES SMENT YEAR 2004-05 AND THE OTHER UNDER SECTION 143(3) FOR THE ASSESSMENT YEAR 2007-0 8 AND IN BOTH THESE ORDERS THE ASSESSING OFFICER REJECTED THE ENTIRE CLAIM OF EXPE NSES ON CONSUMPTION OF CAST IRON MOULDS INDICATED AS REVENUE EXPENDITURE AND THE ASS ESSING OFFICER TREATED THE SAME AS CAPITAL EXPENDITURE AND MADE ADDITIONS ACCORDING LY FOR BOTH THE YEARS. AGAINST WHICH THE ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPE LLATE AUTHORITY BEFORE WHOM IT WAS SUBMITTED THAT THE CAST IRON INGOT MOULD USED BY TH E ASSESSEE IN ITS MANUFACTURING PROCESS DOES NOT HAVE A LONG SHELF LIFE AS THE MOLD ING PROCESS UNDERTAKEN BY THE ASSESSEE IS IN A HIGH TEMPERATURE THE POURING OF T HE MOLTEN IRON IN THE MOULDS MAKES CRACKS AND BREAKS IN THE MOULDS OF AND ON BY WHICH THE ASSESSEE IS COMPELLED TO REPLACE THE MOULDS FREQUENTLY. THE LD. AR OF THE A SSESSEE CITED THE DECISION OF THE TRIBUNAL IN THIS REGARD IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2004-05 DATED 20.01.2011 TREATED THE ENTIRE PURCHASE OF INGOT MOU LDS AS REVENUE EXPENDITURE. THE LD. CIT(A) AFTER REPRODUCING RELEVANT PORTION OF THE I TAT ORDER ON MERITS OF THE ISSUE HAS WHILE FOLLOWING THE ITAT ORDER IN THIS REGARD HELD THAT THE ADDITION MADE BY THE ASSESSING OFFICER TREATING THE PURCHASE OF CAST IRO N INGOT MOULDS AS CAPITAL EXPENDITURE IS NOT CALLED FOR AND AS SUCH NOT WARRANTED. SO HE DELETED SUCH ADDITION FOR BOTH THE YEARS. 4. AGGRIEVED BY THIS ORDER OF THE LD. CIT(A) THE DEPARTMENT HAS COME UP IN APPEAL AND THE ASSESSEE HAS FILED COS TO SUPPORT THE ORDER OF THE LD. CIT(A). 5. AT THE VERY OUTSET THE LD. COUNSEL FOR THE ASS ESSEE WHILE FILING COPY OF THE TRIBUNAL ORDER IN ASSESSEES OWN CASE FOR THE ASSES SMENT YEAR 2004-05 IN ITA NO. I II I.T.A. NO .T.A. NO .T.A. NO .T.A. NOS SS S. .. .826 826 826 826 - -- -827 & 827 & 827 & 827 & C.O.NOS. C.O.NOS. C.O.NOS. C.O.NOS. 79 7979 79- -- -78 7878 78/MDS/11 /MDS/11 /MDS/11 /MDS/11 3 1437/MDS/2009 DATED 20.01.2011 HAS PLEADED THAT FIR STLY THE ORDER OF THE COMMISSIONER PASSED UNDER SECTION 263 FOR THE ASSESSMENT YEAR 20 04-05 HAS BEEN REVERSED BY THE D BENCH OF ITAT AND SECONDLY ON MERITS ALSO THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE AND THE LD. CIT(A) WHILE FOLLOWING TH E TRIBUNALS DECISION ON MERITS HAS DECIDED BOTH THE APPEALS IN FAVOUR OF THE ASSESSEE AND BEFORE US IT WAS SUBMITTED THAT SINCE IT IS COVERED ISSUE NOW THEREFORE THE APPEA LS OF THE REVENUE FOR BOTH THE YEARS MAY BE DISMISSED AND SO FAR AS BOTH THE COS OF THE ASSESSEE ARE CONCERNED THOSE ARE IN SUPPORT OF THE ORDER OF THE LD. CIT(A) AND CAN B E DISPOSED OFF ACCORDINGLY. 6. THE LD. DR SUBMITTED THAT NO DOUBT THE ISSUE IS COVERED AGAINST THE DEPARTMENT BY EARLIER ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2004- 05 BUT THE DEPARTMENT HAS NOT ACCEPTED THE DECISIO N AND HAS GONE TO THE HIGH COURT IN APPEAL UNDER SECTION 260A. 7. AFTER HAVING HEARD BOTH THE SIDES AND CONSIDERI NG THE MATERIAL ON RECORD WE FIND THAT NO DOUBT THE ISSUE IS SQUARELY COVERED IN FAVO UR OF THE ASSESSEE BY EARLIER DECISION OF THE TRIBUNAL WHICH HAS BEEN FOLLOWED BY THE LD. CIT(A) IN DECIDING BOTH THE APPEALS OF THE ASSESSEE IN ITS FAVOUR BUT AS FAR AS THE OR DER OF THE ASSESSING OFFICER FOR THE ASSESSMENT YEAR 2004-05 (CONSEQUENT UPON 263 ORDER PASSED BY THE LD. CIT) IS CONCERNED IT IS FOUND THAT SUCH ORDER UNDER SECTIO N 263 HAS BEEN SET ASIDE BY THE TRIBUNAL AND THE TRIBUNAL HAS ALSO DECIDED THE ISSU E ON MERITS IN FAVOUR OF THE ASSESSEE. THE LD. CIT(A) HAS FOLLOWED THE TRIBUNAL S ORDER AND DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE ON MERITS WITHOUT MAKING MEN TION ABOUT THE ORDER OF THE TRIBUNAL WITH RESPECT TO SETTING ASIDE THE ORDER OF THE LD. CIT UNDER SECTION 263. SINCE ON SETTING ASIDE OF THE 263 ORDER PASSED BY THE LD. CIT FOR TH E ASSESSMENT YEAR 2004-05 BY ITAT I II I.T.A. NO .T.A. NO .T.A. NO .T.A. NOS SS S. .. .826 826 826 826 - -- -827 & 827 & 827 & 827 & C.O.NOS. C.O.NOS. C.O.NOS. C.O.NOS. 79 7979 79- -- -78 7878 78/MDS/11 /MDS/11 /MDS/11 /MDS/11 4 THE VERY FOUNDATION FOR PASSING CONSEQUENTIAL ORDER BY THE ASSESSING OFFICER GOES THEREFORE IN VIEW OF THE ITAT ORDER DATED 20.01.20 11 THE CONCLUSION DRAWN BY THE LD. CIT(A) IS UPHELD THOUGH ON DIFFERENT GROUNDS THE REVENUES APPEAL FOR THIS YEAR IS DISMISSED. . 8. SO FAR AS APPEAL FOR THE ASSESSMENT YEAR 2007-08 IS CONCERNED THE LD. CIT(A) HAS FOLLOWED THE ORDER PASSED BY THE TRIBUNAL IN AS SESSEES OWN CASE FOR THE YEAR 2004-05 ON MERITS. SO FOLLOWING THE SAID DECISION OF THE TRIBUNAL THE ORDER OF THE LD. CIT(A) IS FOUND TO BE PROPER AND JUSTIFIED WHICH I S UPHELD AND THE APPEAL OF THE DEPARTMENT FOR THIS YEAR IS ALSO DISMISSED. 9. SINCE THE APPEALS OF THE REVENUE HAVE BEEN DECI DED AGAINST THE REVENUE AND THE COS OF THE ASSESSEE ARE SIMPLY IN SUPPORT OF TH E ORDER OF THE LD. CIT(A) THEREFORE THOSE COS HAVE BECOME INFRUCTUOUS AND ARE DISMISSED . 10. AS A RESULT THE APPEALS OF THE REVENUE AS WEL L AS COS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON 28.07.2011. SD/- SD/- (ABRAHAM P. GEORGE) ACCOUNTANT MEMBER (U.B.S. BEDI) JUDICIAL MEMBER CHENNAI DATED THE 28.07.2011 VM/- TO:THE ASSESSEE//A.O./CIT(A)/CIT/D.R.