PVR Industries, Hyd, Hyderabad v. DCIT, Cir-16(3), Hyderabad

ITA 295/HYD/2011 | 2006-2007
Pronouncement Date: 09-09-2011 | Result: Partly Allowed

Appeal Details

RSA Number 29522514 RSA 2011
Assessee PAN AABCP2555P
Bench Hyderabad
Appeal Number ITA 295/HYD/2011
Duration Of Justice 6 month(s) 9 day(s)
Appellant PVR Industries, Hyd, Hyderabad
Respondent DCIT, Cir-16(3), Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 09-09-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 09-09-2011
Assessment Year 2006-2007
Appeal Filed On 28-02-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH HYDERABAD BEFORE SHRI G.C. GUPTA VICE PRESIDENT AND SHRI CHANDRA POOJARI ACCOUNTANT MEMBER ITA NO. 295/HYD/2011 (ASSESSMENT YEAR 2006-07) M/S. PVR INDUSTRIES HYDERABAD PAN: AABCP2555P VS DCIT CIRCLE-16(3) HYDERABAD APPELLANT RESPONDENT APPELLANT BY: SHRI S. RAMA RAO RESPONDENT BY: SHRI T. VENKAT REDDY DATE OF HEARING: 30.08.2011 DATE OF PRONOUNCEMENT: 09.09.2011 ORDER PER CHANDRA POOJARI A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE CIT(A)-V HYDERABAD DATED 24.10.2010 FOR ASSESSMENT YEAR 2006- 07. 2. GROUND NOS. 2 AND 3 BY THE ASSESSEE ARE AS FOLLO WS: 2. THE LEARNED CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF AMORTISATION OF THE COST OF CONSTRUCTION OF ONGOLE BRIDGE AMOUNTING TO RS. 2 83 98 516/-. THE LEARNED CIT(A) OUGHT TO HAVE CONSIDERED THE FACT THAT THE APPELLANT HAS UNDERTAKEN DEVELOPMENT OF PROJECT AND THEREFORE THE COST OF DEVELOPMENT IS TO BE ALLOWED AS A DEDUCTION. 3. THE LEARNED CIT(A) ERRED IN HOLDING THAT THE COS T OF DEVELOPMENT OF THE BRIDGE IS CAPITAL EXPENDITURE IN THE HANDS OF THE COMPANY WITHOUT CONSIDERING THE FACT THAT THE SAID AMOUNT REPRESENTS THE REVENUE EXPENDITURE WHICH IS ALLOWABLE AS A DEDUCTION. 3. AFTER HEARING BOTH THE PARTIES WE ARE OF THE OP INION THAT SIMILAR ISSUE HAD COME UP FOR CONSIDERATION BEFORE THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 2003-0 4 AND 2004- I.T.A. NO. 295/HYD/2011 M/S. PVR INDUSTRIES ================== 2 05 IN I.T.A. NOS. 1171/HYD/07 AND 1196/HYD/08. THE TRIBUNAL VIDE ORDER DATED 8.6.2011 DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY HOLDING THAT THE IMPUGNED EXPENDITURE INCURRED B Y THE ASSESSEE IS REVENUE EXPENDITURE TO BE AMORTISED FOR A PERIOD OF 17/7 YEARS. ACCORDINGLY GROUND NOS. 2 AND 3 ARE ALLOWED ON SIM ILAR TERMS. 4. GROUND NO. 4 BY THE ASSESSEE IS AS FOLLOWS: 4. THE LEARNED CIT(A) ERRED IN HOLDING THAT THE ENT IRE AMOUNT OF RS. 24 64 082/- REPRESENTING THE AMOUNT OF SALE PROCEEDS OF THE SCRAP REPRESENTS THE INCOME OF THE APPELLANT WITHOUT CONSIDERING THE FACT THAT THE AMOUNT DERIVED DOES NOT REPRESENT THE INCOME OF THE APPELLANT. 5. WE HAVE HEARD BOTH THE PARTIES AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE SALE PROCEEDS R ECEIVED FROM SALE OF SCRAP GENERATED DURING THE COURSE OF MANUFA CTURE ACTIVITY OF AN ASSESSEE IN THE ELIGIBLE INDUSTRIAL UNDERTAKING HAS TO BE CONSIDERED AS PROFIT AND GAINS OF BUSINESS OF AN IN DUSTRIAL UNDERTAKING AND HAS TO BE CONSIDERED FOR DEDUCTION U/S. 80IA OF THE ACT. THE SCRAP GENERATED FROM A MANUFACTURE ACTIVI TY OF AN INDUSTRIAL UNDERTAKING IS HAVING DIRECT NEXUS BETWE EN THE SALE OF THESE ITEMS AND CARRYING ON OF BUSINESS OF INDUSTRI AL UNDERTAKING. ACCORDINGLY THIS ISSUE IS REMITTED BACK TO THE FIL E OF THE ASSESSING OFFICER TO CONSIDER THE INCOME OUT OF SALE OF SCRAP GENERATED FROM THE MANUFACTURING ACTIVITY FOR DEDUCTION U/S. 80IA OF THE ACT. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH SEPTEMBER 2011. SD/- (G.C. GUPTA) VICE PRESIDENT SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD DATED THE 9 TH SEPTEMBER 2011 TPRAO I.T.A. NO. 295/HYD/2011 M/S. PVR INDUSTRIES ================== 3 COPY FORWARDED TO: 1. M/S. P.V.R. INDUSTRIES C/O. SHRI S. RAMA RAO A DVOCATE FLAT NO. 102 DOOR NO. 3-6-643 SHRIYA'S ELEGANCE ST. NO. 9 HIMAYATNAGAR HYDERABAD-500 029. 2. THE DEPUTY COMMISSIONER OF INCOME-TAX CIRCLE-16 (3) HYDERABAD. 3. THE CIT(A)-V HYDERABAD. 4. THE CIT-IV HYDERABAD. 5. THE DR B-BENCH ITAT HYDERABAD.