DCIT, New Delhi v. M/s. Hindustan Cycle and Tubes (P) Ltd., New Delhi

ITA 2283/DEL/2010 | 2006-2007
Pronouncement Date: 31-01-2011 | Result: Dismissed

Appeal Details

RSA Number 228320114 RSA 2010
Assessee PAN AAACH0814Q
Bench Delhi
Appeal Number ITA 2283/DEL/2010
Duration Of Justice 8 month(s) 17 day(s)
Appellant DCIT, New Delhi
Respondent M/s. Hindustan Cycle and Tubes (P) Ltd., New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 31-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 31-01-2011
Date Of Final Hearing 31-01-2011
Next Hearing Date 31-01-2011
Assessment Year 2006-2007
Appeal Filed On 14-05-2010
Judgment Text
ITA NO. 2283/DEL/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER AND SHRI SHAMIM YAHYA ACCOUNTANT MEMBER I.T.A. NO. 2283/DEL/2010 A.Y. : 2006-07 DCIT CIRCLE 12(1) NEW DELHI VS. M/S HINDUSTAN CYCLE AND TUBES (P) LTD. M-52 RAJOURI GARDEN NEW DELHI (PAN/GIR NO. : AAACH0814Q) (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : NONE DEPARTMENT BY : SH. R.K. GUPTA C.I.T.(D.R.) ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 3.3.20 10 PERTAINING TO ASSESSMENT YEAR 2006-07. 2. THE ISSUE RAISED IS THAT LD. COMMISSIONER OF INCOM E TAX (APPEALS) ERRED IN DELETING THE DISALLOWANCE OF ` 9 01 715/- MADE BY THE ASSESSING OFFICER TREATING THE EXPENSES MADE ON ACQUISITION OF ROTTER SHAFT AND CARBON BUSH AS CAPITAL ASSETS AN D THEREBY HOLDING THAT THE ACQUISITION OF SUCH ASSETS WOULD RESULT IN TO ENDURING BENEFIT TO THE ASSESSEE COMPANY. ITA NO. 2283/DEL/2010 2 3. ASSESSEE IN THIS CASE IS A COMPANY ENGAGED IN MANU FACTURING OF CYCLE AND AUTO TYRES AND TUBES. DURING THE COURSE OF ASSESSMENT ON THE BASIS DOCUMENTS SUBMITTED ASSESSING OFFICER OB SERVED THAT ASSESSEE SHOWED THAT THE EXPENDITURE ON ROTTER FOR KNEEDER MACHINE WAS IN THE NATURE OF CAPITAL EXPENDITURE BUT HAD BE EN CLAIMED AS REPAIRS AND MAINTENANCE EXPENSES. ASSESSING OFFICER WAS OF THE OPINION THAT SUCH EXPENDITURE SHOULD BE CAPITALIZED AS THE SAME HAD BEEN INCURRED ON ACQUISITION OF ASSET OF CAPITAL NA TURE WITH ENDURING BENEFIT. ASSESSEE RESPONDED THAT THE ROTTER WAS ON LY A PART OF KNEEDER MACHINE WHICH WAS USED FOR MIXING OF THE RUBBER COMPO UND AND THAT THE REPAIR /REPLACEMENT OF THE ROTTERS IS REQUIRED F ROM TIME TO TIME. IT WAS FURTHER SUBMITTED THAT SIMILAR ADDITION WAS MADE I N THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2003-04 HAS BE EN DELETED BY THE ITAT. ASSESSING OFFICER DID NOT ACCEPT THE ABOVE. HE HELD THAT THE TOTAL SUM OF 12 02 287/- IS CAPITALIZED BUT DE PRECIATION @25% IS ALLOWED ON THE SAME. HE ALSO MENTIONED THAT IT WAS ALSO NOT ASCERTAINABLE AS TO WHETHER THE ORDER OF THE ITAT H AS BEEN ACCEPTED BY THE DEPARTMENT. 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) REFERRED TO THE TRIBUNAL DECISION WHEREIN ROTTORS WERE HELD TO BE PART OF CURRENT REPAIRS. 4.1 AS REGARDS SHAFT IT WAS SUBMITTED BEFORE THE LD . COMMISSIONER OF INCOME TAX (APPEALS) THAT IT IS COMMON KNOWLEDGE THAT SHAFT IS ALWAYS A PART OF GEARBOX AND BY NO MEANS IT CAN BE HELD A SUB ASSEMBLY OR AN INDEPENDENT MACHINE WHICH COULD BE USE D BY ITSELF. 4.2 SIMILARLY AS REGARDS THE CARBON BUSH IT WAS SU BMITTED THAT BUSHES ARE CONSUMABLES ITEMS HAVING VERY SHORT SPA N OF LIFE. ITA NO. 2283/DEL/2010 3 CONSIDERING THE ABOVE LD. COMMISSIONER OF INCOME TA X (APPEALS) DIRECTED THAT THE EXPENDITURE CANNOT BE TREATED AS CAPITAL EXPENDITURE IN NATURE PARTICULARLY WHEN ITAT IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2003-04 DECIDE THE ISSUE IN FAVOUR OF THE ASS ESSEE. 5. AGAINST THIS ORDER THE REVENUE IS IN APPEAL BEFO RE US. 6. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE AND PERUSED THE RECORDS. NONE APPEARED ON BEHALF OF THE ASS ESSEE. HOWEVER IN OUR CONSIDERED OPINION THE MATTER CAN BE DISPOSED OF BY HEARING THE LD. DEPARTMENTAL REPRESENTATIVE AND PERUSING RECORDS . WE FIND THAT THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS COGENT ENOUGH. THE ROTTOR S SHAFTS AND CARBON BUSHES IN THE PRESENT CASE CLEARLY FALL IN T HE REVENUE FIELD. MOREOVER ITAT IN ASSESSEES OWN CASE FOR THE ASSESS MENT YEAR 2003- 04 HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. CONSIDERING THE ABOVE WE DO NOT FIND ANY INFIRMITY OR ILLEGALITY IN THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS). ACCORDINGLY WE CONFIRMED THE SAME. 7. IN THE RESULT THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31/01/2011 UP ON CONCLUSION OF HEARING. SD/- SD/- [ [[ [RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV] ]] ] [SHAMIM [SHAMIM [SHAMIM [SHAMIM YAHYA] YAHYA] YAHYA] YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 31/1/2011 SRB C CC COPY FORWARDED TO: OPY FORWARDED TO: OPY FORWARDED TO: OPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY ITA NO. 2283/DEL/2010 4 BY ORDER A.R. ITAT NEW DELHI