The DCIT, Circle -4, Ahmedabad v. Lubi Electricals Ltd., Ahmedabad

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD D BENCH (BEFORE S/SHRI G.D. AGARWAL VICE-PRESIDENT AND BHAVESH SAINI JUDICIAL MEMBER) ITA.NO.1925 AND 2760/AHD/2007 ASSTT.YEAR : 2002-2003 AND 2005-2006 DCIT CIR.4 AHMEDABAD. VS. LUBI ELECTRICALS LTD. NR.KALYAN MILLS NARODA ROAD AHMEDABAD. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI C.K. MISHRA ASSESSEE BY : SMT.URVASHI SHODHAN O R D E R PER G.D. AGARWAL VICE-PRESIDENT: THESE ARE TWO REVENUES APPEALS AGAINST THE ORDERS OF THE CIT(A) DATED 13-2 -2007 AND 13-4-2007 FOR THE ABOVE ASSESSMENT YEARS ARISING OUT OF ORDER OF THE ASSESSING OFFICER UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961. 2. IN THE APPEAL OF THE REVENUE FOR A.Y.2002-2003 IT HAS RAISED SEVERAL GROUNDS WHILE FOR A.Y.2005-2006 THERE ARE TWO GRO UNDS WHICH ARE COMMON IN BOTH THE APPEALS. SINCE ASSESSEE BEING THE SAME WE DISPOSE OF BOTH THE APPEALS BY THIS COMMON ORDER. 3. THE GROUND NO.1 RAISED IN THE APPEAL FOR A.Y.200 2-2003 READS AS UNDER: 1. THE LD.CIT(A) ERRED IN LAW AND ON THE FACTS OF THE CASE IN DIRECTING THE AO TO DELETE THE DISALLOWANCE OF RS.2 24 270/- OUT OF MARKING FEES TREATING THE SAME AS CURRENT YEAR REV ENUE EXPENDITURE WITHOUT ANY RESTRICTION. 4. AS REGARDS GROUND NO.1 THE AO NOTED THAT THE AS SESSEE DEBITED P & L ACCOUNT WITH AN AMOUNT OF RS.2 24 270/- TOWARDS MAR KING FEE EXPENSES RELATED TO EARLIER YEAR. THE AO HELD THAT EXPENSE OF EARLI ER YEAR IS NOT PERMISSIBLE FOR THE CURRENT YEAR AND ACCORDINGLY DISALLOWED. THE C IT(A) HOWEVER FOUND THE DCIT VS. LUBI ELECTRICALS LTD. -2- CLAIM OF THE ASSESSEE TO BE TENABLE AND DELETED THE ADDITION BY OBSERVING AS UNDER: 4.2 .. IT IS CLEAR FROM THE ORDER AS WELL AS THE SUBMISSIONS OF THE APPELLANT THAT THE PAYMENT WAS MADE AS MARKETING FE E TO BUREAU OF INDIAN STANDARDS IN RESPECT OF THE SAID AMOUNT PAYA BLE IN CONNECTION WITH MANUFACTURE OF PUMPS. IT IS ALSO ON RECORD TH AT NO AMOUNT COULD BE CAPITALIZED. THE APPELLANT ALSO CLARIFIED THAT ONLY THE ABOVE AMOUNT WAS DEBITED TO THE PROFIT AND LOSS ACCOUNT AND NO P ORTION OF THAT WAS RELATABLE TO EARLIER YEARS EXPENSES. THE DISALLOWA NCE WAS CAUSED ONLY BECAUSE OF INCORRECT UNDERSTANDING OF RELEVANT EXPE NSES FOR THIS YEAR. EVEN AS SEEN FROM THE GENERAL LEDGER ACCOUNT FOR TH IS EXPENDITURE IT WAS PROVIDED ONLY DURING THE RELEVANT PREVIOUS YEAR AND TAKEN INTO PROFIT AND LOSS ACCOUNT. THIS IS PURE REVENUE OUTG O AND THERE IS NOTHING ON RECORD TO HOLD THAT ANY OF THE EXPENDITURE IN TH IS CONNECTION WAS EITHER CLAIMED OR RELATABLE TO EARLIER PERIOD. IN THAT VIEW OF THE MATTER THE CLAIM OF THE APPELLANT IS TENABLE AND THE SAME IS DIRECTED TO BE ALLOWED AS CURRENT YEAR REVENUE EXPENDITURE WITHOUT ANY RESTRICTION. THE LEARNED COUNSEL STATED THAT THIS IS THE REGULAR PAYMENT MADE TO THE BIS IN RESPECT OF NUMBER OF PUMPS MANUFACTURED AND RELATED TO THE CURRENT YEAR AND THEREFORE ALLOWABLE IN THE CURRENT YEAR ITSELF. T HE LEARNED DR ON THE OTHER HAND RELIED ON THE ORDER OF THE AO. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED MATER IAL PLACED BEFORE US. AS PER CIT(A) PAYMENT WAS MADE TO BUREAU OF INDIAN STANDARD AND IT WAS PERTAINING TO THE YEAR UNDER CONSIDERATION AND NOT EARLIER YEAR. THIS FINDING OF CIT(A) HAS NOT BEEN CONTROVERTED BEFORE US. ACCORD INGLY THE SAME IS UPHELD AND GROUND NO.1 OF THE REVENUES APPEAL IS REJECTED . 6. THE SECOND GROUND REGARDING PAYMENT OF RS.1 00 0 00/- PAID TO M/S.MBA MARKETING ENGINEERS & SUPPLIERS AS PROFESSI ONAL FEES THE ASSESSEE CLAIMED THE SAME AS REVENUE EXPENDITURE. THE ASSES SEE CLAIMED THAT THESE EXPENSES INCURRED FOR REGULAR AND ROUTINE UPGRADATI ON OF THE PRODUCTS TO ACHIEVE COST EFFECTIVENESS IN ORDER TO WITHSTAND TH E MARKET COMPETITION. BY SPENDING THIS EXPENDITURE THERE IS NO CREATION OF NEW ASSETS AND/OR GETTING ENDURING BENEFITS THEREFORE THE EXPENDITURE IS PU RELY REVENUE IN NATURE AND DCIT VS. LUBI ELECTRICALS LTD. -3- ALLOWABLE AS BUSINESS DEDUCTION. THE AO WAS NOT C ONVINCED WITH THIS CONTENTION OF THE ASSESSEE AND HELD THE SAME TO BE CAPITAL EXPENDITURE AND DISALLOWED THE CLAIM OF THE ASSESSEE. THE CIT(A) O N THE OTHER HAND WAS OF THE VIEW THAT THE EXPENDITURE INCURRED WAS IN RESPECT O F ON-GOING PRODUCTION PROCESS WITH PROPER UPDATION TO MEET THE MARKETING NEEDS AND THEREFORE WAS REVENUE EXPENDITURE AND ALLOWABLE AS BUSINESS DEDUC TION. THE RELEVANT OBSERVATION MADE IN THIS ORDER READS AS UNDER: 5.2 . THE AO MADE DISALLOWANCE MERELY REFERRING T O THE EXPLANATION 4 TO SECTION 32(1) AND NOT ON PROPER AP P0RECIATION OF ALL THE RELEVANT AND TECHNICAL INFORMATION AND THE PERIODIC ITY OF THE SAME IN THIS REGARD. THE EXPENDITURE AS CONTENDED BY THE A PPELLANT IS REGULAR IN NATURE YEAR AFTER YEAR AND WAS REQUIRED FOR PROPER UPKEEP AND IMPROVEMENT OF THE DESIGN OF THE PRODUCTS AND THE S AID EXPENDITURE THOUGH RELEVANT FOR THE ACTIVITY OF THE BUSINESS DI D NOT RESULT IN SPECIFIC ASSETS OR ENDURING BENEFIT. THERE IS NO ACQUISITIO N OF ANY CAPITAL ASSET SPECIALLY REFERABLE TO THE EXPENDITURE. IT IS ONLY THE NECESSARY EXPENDITURE FOR SUSTENANCE OF ON GOING PRODUCTION P ROCESS WITH PROPER UPDATION TO MEET THE MARKETING NEEDS. IN THAT VIEW OF THE MATTER THE EXPENDITURE CANNOT BE TREATED IN ISOLATION AS CAPIT AL ASSET NOR COULD IT BE APPORTIONED TO THE EXISTING ASSTS HENCE THE TRE ATMENT GIVEN BY THE AO IS NOT SUSTAINABLE ESPECIALLY WHEN THE SAID EXPE NDITURE WAS NOT FOR ANY SPECIFIC ACTIVITY. IT IS A ROUTINE AND REGULAR PROCESS AND HENCE PROFESSIONAL FEES OF SUCH NATURE ARE THE NECESSARY OUTGO IN THE REVENUE FILED. ACCORDINGLY THE DISALLOWANCE OF THE ABOVE SUM IS DIRECTED TO BE DELETED. 7. BEFORE US THE LEARNED DR RELIED ON THE ORDER OF THE AO WHILE THE LEARNED COUNSEL FOR THE ASSESSEE RELIED ON THE ORDE R OF THE CIT(A) AND SUBMITTED THAT THE RECURRING EXPENDITURE INCURRED B Y THE ASSESSEE IS OF ROUTINE NATURE AND REQUIRE TO BE INCURRED YEAR AFTER YEAR F OR UPGRADATION OF THE PRODUCTS IN ORDER TO SURVIVE IN THE COMPETITIVE MARKET. HE FURTHER SUBMITTED THAT BY VIRTUE OF THIS EXPENDITURE THERE IS NO CREATION OF CAPITAL ASSETS AND THE BENEFIT THEREFROM IS NOT OF ENDURING NATURE. IT IS SUBMIT TED THAT THE CIT(A) IS JUSTIFIED IN DELETING THE DISALLOWANCE. DCIT VS. LUBI ELECTRICALS LTD. -4- 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED MATER IAL PLACED BEFORE US. AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SIDES A ND FACTS OF THE CASE WE ENTIRELY AGREE WITH THE FINDINGS OF THE CIT(A). TH E EXPENDITURE WAS BY WAY OF PROFESSIONAL FEE FOR UPGRADATION OF ASSESSEES PROD UCT. BY INCURRING SUCH EXPENDITURE NO NEW ASSET IS ACQUIRED BY THE ASSESS EE. HENCE WE AGREE WITH THE CIT(A) THAT THE EXPENSES WAS REVENUE EXPENSES. ACCORDINGLY GROUND NO.2 OF THE REVENUES APPEAL IS REJECTED. 9. THIRD GROUND IN THE REVENUES APPEAL READS AS UN DER: 3. THE LD.CIT(A) ERRED IN LAW AND ON THE FACTS OF THE CASE IN DIRECTING THE AO TO DELETE THE DISALLOWANCE OF RS.2 05 613/- BEING THE ISO 9000 CERTIFICATE EXPENSES TREATING THE SAME AS REVENUE EXPENSES AND WITHDRAW THE DEPRECIATION. 10. WE HAVE CONSIDERED ARGUMENTS OF BOTH THE PARTIE S AND PERUSED MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE HAS CLAIMED RS.2 05 613/- AS EXPENSES FOR PROCURING ISO 9000 CERTIFICATES FOR ME ETING THE REQUIREMENT OF THE CLIENTS. THIS IS BEING THE PERIODIC EXERCISE TO MA INTAIN INTERNATIONAL QUALITY STANDARDS AND INTERNATIONAL ACCEPTANCE AND DEMAND I N THE PRODUCT/SERVICES THE EXPENSES THEREON ARE REVENUE IN NATURE. THE AO HOW EVER DID NOT AGREE WITH THE CLAIM OF THE ASSESSEE AND HELD THAT THE EXPENSE S INCURRED TOWARDS ISO 9000 CERTIFICATION WERE SORT OF PATENT OR COPYRIGHT WHIC H ARE INTANGIBLE ASSETS AND THEREFORE ANY EXPENSES INCURRED THEREOF ARE CAPITAL EXPENDITURE AND REQUIRED TO BE CAPITALIZED. THE AO ACCORDINGLY DISALLOWED THE CLAIM OF THE ASSESSEE AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. THE CIT(A) HOWEVER DELETED THE DISALLOWANCE WITH THE FOLLOWING OBSERVA TIONS: 6.2 .. I AM CONVINCED THAT THE EXPENSES OF ISO CE RTIFICATES ARE IN THE NATURE OF REGULAR BUSINESS EXPENSES TO MEET WIT H THE MARKET DEMANDS OF RECOGNITION AS TO THE STANDARD SAND QUAL ITY NOT BRINGING IN ANY SPECIFIC CAPITAL ASSET. A REGULAR AND NECESSAR Y EXPENSES OF SUCH NATURE SURELY FALL UNDER REVENUE HEAD AND CANNOT BE TREATED AS SEPARATE CAPITAL ASSET AND FOR ALLOWING FOR DEPRECIATION THE REON. ACCORDINGLY I DIRECT THE AO TO ALLOW THE ISO EXPENSES BEING CERTI FICATION EXPENSES AS DCIT VS. LUBI ELECTRICALS LTD. -5- REVENUE ITEM AND DELETE THE DISALLOWANCE IN THIS RE GARD AND WITHDRAW THE DEPRECIATION. IT HAS BEEN BROUGHT TO OUR NOTICE BY THE LEARNED CO UNSEL FOR THE ASSESSEE THAT THE ITAT AHMEDABAD BENCHES IN CASE OF LUBI SUBMERSIBLE LTD. IN ITA NO.1179/AHD/2007 FOR A.Y.2004-2005 DATED 26-2-2010 ALLOWED SIMILAR CLAIM BY HOLDING THAT THE ISO 9000 EXPENSES ALLOWABLE AS BUSINESS EXPENDITURE UNDER SECTION 37(1) OF THE ACT. THE RELEVANT PORTION OF THE ABOVE ORDER OF THE ITAT READS AS UNDER: 9. AT THE TIME OF HEARING BOTH THE PARTIES AGREED THAT THE ISSUE AT HAND IS COVERED BY THE DECISION OF THE CHANDIGARH B ENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. UPPER INDIA STEEL MFG. & EN GG. CO. 150 TAXMAN 51 WHEREIN THE TRIBUNAL HELD THAT THIS IS A BUSINESS EXPENDITURE ALLOWABLE UNDER SEC. 37(1) OF THE ACT. THIS DECISI ON WAS FOLLOWED BY THE AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF JT. CIT VS. M/S.PLASTICCHEMIX INDUSTRIES IN ITA NO.1717/AHD/200 1 ORDER DATED 9-3- 2007. THEREFORE FOLLOWING THE ORDER OF THE COORDI NATE BENCH OF THE TRIBUNAL WE DISMISS THIS GROUND OF APPEAL OF THE R EVENUE. SINCE THE ITAT HAS ALLOWED SIMILAR CLAIM CITED SUPR A WE RESPECTFULLY FOLLOWING THE ORDER OF THE ITAT CONFIRM THE ORDER OF THE CIT(A) ON THIS ISSUE AND DISMISS THIS GROUND OF THE REVENUE. 11. NEXT GROUND OF THE REVENUE READS AS UNDER: 4. DELETING DISALLOWANCE OF RS.3 41 171/- BEING BA D DEBTS WRITTEN OFF. 12. THE SHORT FACTS IN THIS REGARD ARE THAT THE ASS ESSEE WAS SUPPLYING GOODS TO M/S.SHREE MANUFACTURES AND DEBIT BALANCE AGAINST THE SAID PARTY SHOWED AT RS.3 57 131/- AS ON 25.09.2000 WHICH WAS SUBSEQUEN TLY WRITTEN OFF IN THE BOOKS OF ACCOUNTS AS ON 31-3-2002 AND CLAIMED THE S AME AS BAD DEBTS. THE AO REJECTED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAD NOT FURNISHED ANY EVIDENCE TO SHOW THAT THE BAD DEBTS B ECOME REALLY BAD DURING THE YEAR. THE CIT(A) HOWEVER DELETED THE DISALLOWANCE BY HOLDING THAT AS PER THE AMENDED PROVISIONS OF SECTION 36(1)(VII) R.W.S. 36( 2) ANY BAD DEBT IN THE DCIT VS. LUBI ELECTRICALS LTD. -6- OPINION OF THE ASSESSEE WRITTEN OFF IN THE BOOKS IS ALLOWABLE AND THE AO CANNOT INSIST ON THE ASSESSEE TO PROVE THAT THE DEBT HAD B ECOME REALLY BAD. 13. THE LEARNED DR SUPPORTED THE ORDER OF THE AO WH ILE THE LEARNED COUNSEL FOR THE ASSESSEE TO SUPPORT THE ORDER OF THE CIT(A) ALSO RELIED ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF TRF LIM ITED VS. CIT IN CIVIL APPEAL NO.5293 OF 2003 DATED 9-2-2010 (COPY OF WHIC H PLACED ON RECORD). IT IS FURTHER SUBMITTED THAT THERE IS NO DISPUTE ABOUT THE WRITING OFF OF THE BAD DEBTS IN THE BOOKS OF ACCOUNTS AND ONLY THE DISPUTE RAISED BY THE AO IS THAT THERE WAS NO PROOF ON RECORD TO SHOW THAT THE DEBT HAS BECOME REALLY BAD AND IRRECOVERABLE. IT IS FURTHER SUBMITTED THAT AS PER THE AMENDED PROVISION THE REQUIREMENT TO CLAIM BAD DEBTS IS ONLY TO WRITE OFF THE AMOUNT AS IRRECOVERABLE IN THE ACCOUNTS OF THE ASSESSEE. THAT HAVING BEEN DONE THE AO HAS NO RIGHT TO REJECT THE CLAIM OF THE ASSESSEE. 14. WE HAVE HEARD SUBMISSIONS OF BOTH THE SIDES AND GONE THROUGH THE MATERIAL PLACED ON RECORD. ADMITTEDLY THERE IS NO DISPUTE AS TO THE WRITE OFF OF THE DEBTS IN THE BOOKS OF THE ACCOUNTS OF THE ASSES SEE. THE ONLY DISPUTE ON WHICH THE AO HAS DENIED THE CLAIM OF THE ASSESSEE I S THAT THERE WAS NO EVIDENCE TO SUGGEST THAT WHETHER OR NOT THE DEBT HA S BECOME IRRECOVERABLE. WE FIND THAT THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF TRF LTD. (SUPRA) RELIED ON BY THE ASSESSEE SQUARELY COVERS T HE ISSUE OF BAD DEBTS IN FAVOUR OF THE ASSESSEE. THE OBSERVATION OF THE HON BLE APEX COURT IS AS UNDER: THIS POSITION IN LAW IS WELL-SETTLED. AFTER 1 ST APRIL 1989 IT IS NOT NECESSARY FOR THE ASSESSEE TO ESTABLISH THAT THE DE BT IN FACT HAS BECOME IRRECOVERABLE. IT IS ENOUGH IF THE BAD DEBT IS WRI TTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS OF THE ASSESSEE. HOWEVER IN THE PRESENT CASE THE ASSESSING OFFICER HAS NOT EXAMINED WHETHER THE DEBT HAS IN FACT BEEN WRITTEN OFF IN THE ACCOUNTS OF THE ASSESSEE. WHEN BAD DEBT OCCURS THE BAD DEBT ACCOUNT IS DEBITED AND THE CUSTOMERS ACCO UNT IS CREDITED THUS CLOSING THE ACCOUNT OF THE CUSTOMER. IN THE CASE O F COMPANIES THE PROVISION IS DEDUCTED FROM SUNDRY DEBTORS. AS STAT ED ABOVE THE AO HAS NOT EXAMINED WHETHER IN FACT THE BAD DEBT OR PART THEREOF IS WRITTEN OFF DCIT VS. LUBI ELECTRICALS LTD. -7- IN THE ACCOUNTS OF THE ASSESSEE. THIS EXERCISE HAS NOT BEEN UNDERTAKEN BY THE ASSESSING OFFICER. HENCE THE MATTER IS REM ITTED TO THE ASSESSING OFFICER FOR DE NOVO CONSIDERATION OF THE ABOVE-MENT IONED ASPECT ONLY AND THAT TOO ONLY TO THE EXTENT OF THE WRITE OFF. SINCE THE ASSESSEE HAS WRITTEN OFF THE BAD DEBTS IN THE BOOKS OF ACCOUNTS WHICH HAS NOT BEEN DISPUTED BY THE ASSESSING OFFICER THE ABOVE DECISION OF THE HONBLE APEX COURT WOULD BE SQUARELY APPLICABLE. W E RESPECTFULLY FOLLOWING THE ABOVE JUDGMENT OF THE HONBLE APEX COURT CONFI RM THE ORDER OF THE CIT(A) ON THIS ISSUE AND REJECT THE GROUND OF THE R EVENUE. 15. THE LAST GROUND OF THE REVENUES APPEAL READS A S UNDER: 5. THE LD.CIT(A) ERRED IN LAW AND ON THE FACTS OF T HE CASE IN DIRECTING THE AO TO DELETE THE ADDITION OF RS.18 96 208/- BEING THE CLOSING BALANCE IN THE CENVAT RECEIVABLE AMOUNT AS RECEIPTS TO THE TOTAL INCOME. 16. WE HAVE HEARD BOTH THE PARTIES AND PERUSED MATE RIAL AVAILABLE ON RECORD. WE FIND THAT THE UNUTILISED CREDIT BALANCE OF THE C ENVAT AMOUNTING TO RS.18 96 208/- WAS TREATED BY THE AO AS INCOME OF T HE ASSESSEE AND ADDED TO THE TOTAL INCOME. THE CONTENTION OF THE ASSESSEE W AS THAT THE CENVAT RECEIVABLE BEING DEBIT BALANCE WAS TO BE ADJUSTED AGAINST THE LIABILITY TOWARDS EXCISE DUTY AND COULD NOT BE TREATED AS INCOME. IT WAS CONTEND ED THAT THE AO HAS FAILED TO UNDERSTAND THE ACCOUNTING TREATMENT OF CENVAT CREDI T AND PURPOSE FOR WHICH THE ACTUAL PAYMENT WERE MADE. IT WAS FURTHER SUBM ITTED THAT THE ASSESSEE HAS ALREADY REWORKED THE STOCK AS PER REQUIREMENT OF SE CTION 145A OF THE ACT AND THEREFORE THERE WAS NO QUESTION OF TREATING THE BAL ANCE IN CENVAT ACCOUNT AS INCOME OF THE ASSESSEE. THE CIT(A) HOWEVER DELETED THE DISALLOWANCE BY FOLLOWING THE JUDGMENT OF THE APEX COURT IN THE CAS E OF CIT VS. INDO NIPPON CHEMICALS CO. LTD. 261 ITR 275. THE LEARNED COUNS EL FOR THE ASSESSEE HAS RELIED ON THE DECISION OF THE TRIBUNAL IN THE CASE OF DCIT VS. LUBI SUBMERSIBLE LTD. IN ITA NO.1179/AHD/2007 DATED 26- 2-2010 WHEREIN THE TRIBUNAL HAS ALLOWED THE CLAIM OF THE ASSESSEE BY H OLDING AS UNDER: DCIT VS. LUBI ELECTRICALS LTD. -8- 13. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE LD.CIT(A) HAS OBSERVED THAT MODVAT CREDIT RECEI VABLE OF RS.21 89 968/- WAS APPEARING AS A CURRENT ASSET IN THE BALANCE SHEET OF THE ASSESSEE. THE ABOVE FACT COULD NOT BE DISPUTED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE BEFORE US BY BRINGING A NY RELEVANT MATERIAL. ON THE ABOVE UNDISPUTED FACT WE FIND TH AT THE LEARNED AO WAS NOT JUSTIFIED IN OBSERVING THAT THE ABOVE AMOUN T WAS SURPLUS OF EXCISE DUTY PAYABLE ACCOUNT. THE AMOUNT BEING NOT A LIABILITY BUT BEING AN ASSET THE LD.AO ADDED THE SAME TO THE INCOME OF THE ASSESSEE ON AN ERRONEOUS APPRECIATION OF FACT. THE LEARNED DEPART MENTAL REPRESENTATIVE COULD NOT POINT OUT ANY ERROR IN THE ORDER OF THE LEARNED CIT(A) AND THEREFORE WE DO NOT FIND ANY GOOD REASON TO INTERFERE WITH THE SAME AND DISMISS THIS GROUND OF APPEAL OF THE R EVENUE. FURTHER RELIANCE WAS ALSO RELIED ON THE FOLLOWING DECISIONS: I) COMMISSIONER OF INCOME-TAX VS. INDO NIPPON CHEMICAL S CO. LTD. 261 ITR 275 (SC) II) COMMISSIONER OF INCOME-TAX VS. UNIQUE INDUSTRIES 3 07 ITR 350 (GUJ); 18. WE FIND THAT THE ISSUE OF ALLOWABILITY OF CENVA T CREDIT IS COVERED BY THE DECISIONS OF THE ITATS ORDER IN THE CASE OF LUBI S UBMERSIBLE LTD. AND THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN THE CA SE OF UNIQUE INDUSTRIES AND THE HONBLE APEX COURT IN THE CASE OF INDO NIPPON C HEMICALS CO. LTD. (SUPRA). RESPECTFULLY FOLLOWING THESE THREE DECISIONS WE AR E NOT INCLINED TO INTERFERE WITH THE ORDER OF THE CIT(A) ON THIS ISSUE WHICH I S UPHELD AND THIS GROUND OF THE REVENUE IS REJECTED. 19. ITA NO.2760/AHD/2007 20. IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLO WING TWO GROUNDS: 1. THE LD.CIT(A) ERRED IN LAW AND ON THE FACTS OF THE CASE IN DELETING THE DISALLOWANCE OF ISO 9000 EXPENSES OF RS.82 352/ - 2. THE LD.CIT(A) ERRED IN LAW AND ON THE FACTS OF THE CASE IN DELETING THE DISALLOWANCE OF UNAVAILED CENVAT CREDIT OF RS.8 2 30 313/-. DCIT VS. LUBI ELECTRICALS LTD. -9- 21. WE FIND THAT THESE TWO GROUNDS ARE SIMILAR TO T HE GROUNDS RAISED IN ITA NO.1925/AHD/2007 IN GROUND NO.3 AND 5. IT IS STAT ED BY BOTH THE PARTIES THAT FACTS IN BOTH THE APPEALS RELATING TO THESE GROUNDS ARE SIMILAR. THIS BEING SO FOR THE REASONS STATED IN ITA NO.1925/AHD/2003 WHIL E DEALING WITH GROUND NOS.3 AND 5 WE DISMISS THESE GROUNDS OF THE REVENU E. 22. IN THE RESULT THE REVENUES APPEALS ARE DISMIS SED. ORDER PRONOUNCED IN OPEN COURT ON 23 RD APRIL 2010. SD/- SD/- (BHAVESH SAINI) JUDICIAL MEMBER (G.D. AGARWAL) VICE-PRESIDENT PLACE : AHMEDABAD DATE : 23-04-2010 VK* COPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR ITAT. BY ORDER AR ITAT AHMEDABAD