DCIT, Cir.-8,, Pune v. Amcor Pet Packaging Asia Pvt. Ltd.,, Pune

ITA 540/PUN/2010 | 2001-2002
Pronouncement Date: 23-12-2011 | Result: Dismissed

Appeal Details

RSA Number 54024514 RSA 2010
Assessee PAN AADCS6330D
Bench Pune
Appeal Number ITA 540/PUN/2010
Duration Of Justice 1 year(s) 8 month(s) 10 day(s)
Appellant DCIT, Cir.-8,, Pune
Respondent Amcor Pet Packaging Asia Pvt. Ltd.,, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 23-12-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 23-12-2011
Assessment Year 2001-2002
Appeal Filed On 13-04-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI G.S. PANNU ACCOUNTANT MEMBER I.T.A. NO. 540 AND 758/PN/2010 A.Y. 2001-02 AND 2002-03 DY. CIT CIR. 8 PUNE APPELLANT VS. AMCOR PET PACKAGING ASIA PVT. LTD. GAT NO. 119 123 VILLAGE DANORIE ALANDI MARKET ROAD PUNE-412 105 PAN AADCS 6330 D RESPONDENT APPELLANT BY: SHRI S.K. AMBASTHA RESPONDENT BY: SHRI R.D. OMKAR DATE OF HEARING: 20-12-2011 DATE OF PRONOUNCEMENT : ___ 12-2011 ORDER PER SHAILENDRA KUMAR YADAV JM BOTH THESE APPEALS BY THE REVENUE ARE DIRECTED AGAINST SEPARATE ORDERS OF CIT(A)-V PUNE DATED 14-1 -2010 AND 18-2-2010 RESPECTIVELY FOR A.Y. 2001-02 AND 200 2-03. ITA NO. 540/PN/2010 FOR A.Y. 2001-02 2. THE FIRST ISSUE RAISED IN THIS APPEAL BY THE REV ENUE PERTAINS TO DELETION OF ADDITION OF RS. 10 30 000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF EXPENSES INCURRED ON CURRENT REPAIR OF PLANT AND MACHINERY. THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURE AND SALE OF PET PERFORMS WH ICH ARE USED IN THE PACKAGING OF CARBONATED SOFT DRINKS . THE RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 30-10 -2001 2 ITA NO. 540 AND 758/PN/2010 AMCOR PET PACKAGING A.Y. 2001-02 AND 2002-03 DISCLOSING TOTAL LOSS OF RS. 1 39 14 430/- WHICH WA S ASSESSED BY THE ASSESSING OFFICER AT A TOTAL LOSS O F RS. 98 56 200/-. WHILE COMPLETING THE ASSESSMENT THE ASSESSING OFFICER HELD THAT AN AMOUNT OF RS. 10 30 000/- INCURRED ON REPAIR OF GENSET WAS NOT ALLOWABLE AS R EVENUE EXPENDITURE AND TREATED THE SAME AS CAPITAL EXPENDI TURE. ON APPEAL THE SAME WAS DELETED BY THE CIT(A) WHICH HAS BEEN OPPOSED BY THE REVENUE IN THE PRESENT APPEAL B EFORE US. 3. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD WE FIND THAT THE ASSESSING OFFI CER HAS NOT DOUBTED THE FACTUAL POSITION WHICH NECESSITATED THE EXPENDITURE INCURRED BY THE ASSESSEE. THE ASSESSIN G OFFICER HAS ALSO NOT DOUBTED THAT THE EXPENDITURE W AS IN FACT INCURRED ON REPAIRS. THE ASSESSEE SUBMITTED THAT IN ORDER TO ENSURE UNINTERRUPTED SUPPLY OF POWER FOR C ARRYING OUT SMOOTHLY THE MANUFACTURING OPERATIONS AT A REMO TE PLACE THE DG SET WAS ACQUIRED AND INSTALLED IN A.Y. 1997- 98. SINCE THE SUBSIDIARY PARTS VIZ. CRANK SHAFT AN D CONNECTING ROD WERE DAMAGED DUE TO WEAR AND TEAR IN THE COURSE OF BUSINESS THE REPAIRS TO THE SAME HAD TO BE CARRIED OUT BY REPLACING SOME OF THE COMPONENTS. TH IS SHOWS THAT NO NEW ASSET WAS SET UP OR BROUGHT INTO EXISTENCE FOR CARRYING OUT THE BUSINESS OF THE ASSE SSEE. IT HAS BEEN HELD BY THE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT VS. MALERKOTLA STEELS AND ALLOYS (P ) LTD. (2011) 49 DTR (P & H) 1 THAT THE EXPENSES ON REPAIR S TO FURNACE IS REVENUE EXPENDITURE WHEN NO NEW ASSET WA S SET UP OR BROUGHT INTO EXISTENCE WITH ENHANCED CAPACITY . ADMITTEDLY THE EXPENDITURE WAS INCURRED TO BRING T HE ASSET BACK INTO USE AND TO GIVE IT A FRESH LEASE OF LIFE. IN THIS 3 ITA NO. 540 AND 758/PN/2010 AMCOR PET PACKAGING A.Y. 2001-02 AND 2002-03 VIEW OF THE MATTER THE CIT(A) WAS JUSTIFIED IN DEL ETING THE ADDITION OF RS. 10 30 000/- MADE ON ACCOUNT OF DISALLOWANCE OF EXPENSES INCURRED ON CURRENT REPAIR OF PLANT AND MACHINERY. WE UPHOLD THE SAME. 4. THE NEXT ISSUE PERTAINS TO DELETION OF ADDITION OF RS. 15 79 460/- MADE ON ACCOUNT OF SALES COMMISSION. TH E ASSESSING OFFICER ADDED BACK TO THE INCOME OF THE A SSESSEE AN AMOUNT OF RS. 15 79 400/- CLAIMED AS SALES COMMISSION WHICH WAS DELETED BY THE CIT(A). THE SAME HAS BEEN OPPOSED BY THE REVENUE BEFORE US. 5. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD IT IS SEEN THAT THE ASSESSING O FFICER MADE THE DISALLOWANCE OF SALES COMMISSION ON THE GR OUND THAT THE ASSESSEE FAILED TO PROVIDE DOCUMENTARY EVI DENCE SUCH AS DETAILS OF THE NAME AND ADDRESS OF THE PART Y RATE OF COMMISSION TOTAL TRANSACTION ON WHICH COMMISSIO N HAS BEEN PAID DETAILS OF SERVICES RENDERED WITH PROOF AND COPY OF THE WRITTEN AGREEMENTS. HOWEVER WE FIND THAT MO ST OF THE DETAILS WERE PRODUCED BY THE ASSESSEE DURING TH E REMAND PROCEEDINGS BEFORE THE ASSESSING OFFICER. THEREFORE IT IS NOT CORRECT TO SAY THAT THE ASSESS EE HAS FAILED TO PRODUCE ANY DOCUMENTARY EVIDENCE. FURTHER IT IS SEEN THAT SIMILAR SALES COMMISSION WAS ALLOWED BY T HE ASSESSING OFFICER FOR A.Y. 1999-00 AND 2000-01 AND FOR THE FIRST TIME THE DISALLOWANCE HAS BEEN MADE FOR THE YEAR UNDER CONSIDERATION. CONSIDERING THE TOTALITY OF T HE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS THE DOCUME NTARY EVIDENCE ALREADY PRODUCED DURING THE REMAND PROCEED INGS AS CAN BE SEEN FROM THE CONTENTS OF THE REMAND REPO RT SUBMITTED BY THE ASSESSING OFFICER WE DO NOT FIND ANY 4 ITA NO. 540 AND 758/PN/2010 AMCOR PET PACKAGING A.Y. 2001-02 AND 2002-03 INFIRMITY IN THE ORDER OF THE CIT(A) IN DELETING TH E ADDITION OF RS. 15 79 460/- MADE ON ACCOUNT OF SALES COMMISS ION. WE ACCORDINGLY UPHOLD HIS ORDER ON THIS ISSUE. ITA NO. 758/PN/2010 FOR .Y. 2002-03 6. THE ONLY ISSUE RAISED BY THE REVENUE IN THIS APP EAL PERTAINS TO DELETION OF ADDITION OF RS. 11 32 490/- MADE ON ACCOUNT OF SALES COMMISSION. SIMILAR ISSUE WAS RAI SED BY THE REVENUE FOR THE A.Y. 2001-02. FACTS BEING SIMIL AR SO FOLLOWING THE REASONING GIVEN IN PARA 5 OF THIS ORD ER THE ORDER OF THE CIT(A) IN DELETING THE ADDITION MADE O N ACCOUNT OF SALES COMMISSION IS UPHELD FOR THE YEAR UNDER CONSIDERATION. 7. IN THE RESULT BOTH THE APPEALS OF THE REVENUE A RE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 23 RD DECEMBER 2011. SD/- SD/- (G.S. PANNU) ACCOUNTANT MEMBER (SHAILENDRA KUMAR YADAV) JUDICIAL MEMBER PUNE DATED THE 23 RD DECEMBER 2011. ANKAM COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT V PUNE 4. CIT(A)-V PUNE 5. THE D.R ITAT PUNE BENCH PUNE 6. GUARD FILE BY ORDER SR. PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES PUNE. 5 ITA NO. 540 AND 758/PN/2010 AMCOR PET PACKAGING A.Y. 2001-02 AND 2002-03