ACIT, Virudhunagar v. M/s. Rajapalayam Mills Limited, Rajapalayam

ITA 1210/CHNY/2010 | 2004-2005
Pronouncement Date: 09-09-2010 | Result: Allowed

Appeal Details

RSA Number 121021714 RSA 2010
Assessee PAN AAACR8897F
Bench Chennai
Appeal Number ITA 1210/CHNY/2010
Duration Of Justice 1 month(s) 17 day(s)
Appellant ACIT, Virudhunagar
Respondent M/s. Rajapalayam Mills Limited, Rajapalayam
Appeal Type Income Tax Appeal
Pronouncement Date 09-09-2010
Appeal Filed By Department
Order Result Allowed
Bench Allotted B
Tribunal Order Date 09-09-2010
Assessment Year 2004-2005
Appeal Filed On 23-07-2010
Judgment 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. 1210/MDS/2010 ASSESSMENT YEAR :2004-05 THE ASSISTANT COMMISSIONER OF INCOME-TAX CIRCLE-I VIRUDHUNAGAR. V. M/S. RAJAPALAYAM MILLS LTD. P.B. NO. 1 P.A.C. RAMASAMY SALAI RAJAPALAYAM. PAN : AAACR8897F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P.B. SEKARAN RESPONDENT BY : SHRI V. JAGADISAN O R D E R PER GEORGE MATHAN JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(APPEALS)-II MADURAI IN APPEAL NO. 62/09-10 DAT ED 21-04-2010 FOR THE ASSESSMENT YEAR 2004-05. 2. SHRI P.B. SEKARAN LD. CIT-DR REPRESENTED ON BEH ALF OF THE REVENUE AND SHRI V. JAGADISAN CA REPRESENTED ON BEHALF OF THE ASSESSEE. 3. THE REVENUES APPEAL IS DELAYED BY FOUR DAYS FOR WHICH THE ASSESSING OFFICER HAS FILED CONDONATION OF DELAY PETITION WHE REIN HE HAS MENTIONED THAT THE DELAY IS ON ACCOUNT OF THE POSTAL DELAY IN THE RECE IPT OF THE APPEAL PAPERS. THE I.T.A. NO.1210/MDS/2010 2 LEARNED AUTHORISED REPRESENTATIVE DID NOT RAISE ANY SERIOUS OBJECTIONS. CONSEQUENTLY THE DELAY IS CONDONED AND THE APPEAL IS DISPOSED OF ON MERITS. 4. IN THE REVENUES APPEAL THE REVENUE HAS RAISED THE FOLLOWING GROUNDS : 1. THE ORDER OF THE CIT(A) IS CONTRARY TO THE FAC TS AND CIRCUMSTANCES OF THE CASE. 2. THE CIT(A) HAS ERRED IN DELETING THE DISALLOWAN CE OF 40 89 952/-. AS PER SEC. 35(1)(I) ANY EXPENDITURE ( NOT BEING IN THE NATURE OF CAPITAL EXPENDITURE) LAID OUT OR E XPENDED ON SCIENTIFIC RESEARCH RELATED TO THE BUSINESS SHALL B E ALLOWED. THE CIT (A) OUGHT TO HAVE SEEN THAT THE ASSESSEE HA S FAILED TO PROVE THAT THE EXPENDITURE INCURRED WERE RELATED TO SCIENTIFIC RESEARCH IN CONNECTION WITH THE ASSESSEE S BUSINESS AND NOT IN THE NATURE OF CAPITAL. 3. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING THE ORDER OF THE CIT (A) MAY BE SET ASIDE AND RESTORED THE MATTER BACK TO THE FI LE OF THE ASSESSING OFFICER. IT WAS SUBMITTED BY THE LEARNED DR THAT THE ASSESSE E HAD NOT FULFILLED THE CONDITIONS PRESCRIBED U/S. 35(1)(I) AND 35(1)(IV) O F THE INCOME-TAX ACT 1961 IN RESPECT OF THE EXPENDITURE CLAIMED. IT WAS SUBMITT ED THAT THE LEARNED CIT(A) WITHOUT VERIFYING THE DETAILS HAD ALLOWED THE ASSES SEES CLAIM BY FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE EARLIER ASSESSMENT YEAR. I.T.A. NO.1210/MDS/2010 3 5. IN REPLY THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT THE CO- ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES O WN CASE FOR THE ASSESSMENT YEAR 2003-04 IN ITA NO. 261/MDS/2007 DATED 31-07-20 08 HAS HELD THAT THE ASSESSEE WAS ENTITLED TO THE DEDUCTION U/S. 35(1) P ARTICULARLY IN VIEW OF THE FACT THAT THE ASSESSING OFFICER HIMSELF HAD ALLOWED THE DEDUCTIONS FOR THE ASSESSMENT YEAR 2005-06. 6. ON A SPECIFIC QUERY FROM THE BENCH AS TO THE BRE AK UP OF THE EXPENDITURE TO VERIFY IF ANY PORTION OF THE EXPENDITURE CLAIMED WAS ON THE CAPITAL FILED THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT HE HAD NO OBJECTION IF THE ISSUE OF VERIFICATION OF THE EXPENDITURE AS TO WHETHER TH E EXPENDITURE WAS IN THE REVENUE FIELD OR IN THE CAPITAL FIELD COULD BE SENT BACK TO THE ASSESSING OFFICER AS THAT HAS NOT BEEN LOOKED INTO BY THE ASSESSING OFFI CER OR THE CIT(A). THE LEARNED DR HAD NO OBJECTION TO THIS CLAIM. 7. WE HAVE CONSIDERED THE SUBMISSIONS. AS IT IS NO TICED THAT THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE F OR THE ASSESSMENT YEAR 2003- 04 REFERRED TO SUPRA HAS HELD THAT THE ASSESSEE I S ENTITLED TO THE CLAIM OF DEDUCTION U/S. 35(1) BEING THE EXPENDITURE ON SCIEN TIFIC RESEARCH RELATED TO THE BUSINESS RESPECTFULLY FOLLOWING THE DECISION OF TH E CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE ASSESSM ENT YEAR 2003-04 THE FINDING OF THE LEARNED CIT(A) ON THIS ISSUE STANDS CONFIRME D. HOWEVER THE ISSUE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER ONLY FOR THE PURPOSE OF VERIFYING AS TO I.T.A. NO.1210/MDS/2010 4 WHETHER ANY PORTION OF THE EXPENDITURE CLAIMED IS C APITAL IN NATURE. IF NONE OF THE EXPENDITURE IS FOUND TO BE IN THE CAPITAL FIELD THE EXPENDITURE AS CLAIMED BY THE ASSESSEE IS LIABLE TO BE ALLOWED U/S. 35(1) OF THE INCOME TAX ACT 1961. IN THE CIRCUMSTANCES THE APPEAL OF THE REVENUE IS ALL OWED FOR STATISTICAL PURPOSES. 8. THE ORDER WAS PRONOUNCED IN THE COURT ON 09-09-2 010. SD/- SD/- (ABRAHAM P. GEORGE) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI DATED THE 9 TH SEPTEMBER 2010. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE