Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (11) TMI 1700 - ITAT AHMEDABADReopening of assessment - depreciation on plant and machinery - Held that:- The assessee had in fact disclosed all its depreciation details in Form 3CD Annexure 1A. Her case however is that Section 149(1)(b) envisages time limit for issuing Section 148 notice to be between four years to six years squarely applies in facts of the instant case. We find no merit in the instant argument as the above statutory provision does not operate as an exception to Section 147 (first proviso). It is not a proviso to proviso in other words. Learned Departmental Representative further fails to dispute that the question whether or not a port terminals Jetty / Trestle is to be treated as plant and machinery is no more res integra since this tribunal’s in Kandla Port Trust case (2006 (4) TMI 243 - ITAT RAJKOT) has held such assets to be plant and machinery entitled for 25% rate of depreciation. Hon’ble jurisdictional high court has upheld the said view in Revenue’s tax appeal no. 1942 of 2006 decided on 05. 07. 2016. We therefore find no reason to accept in Revenue’s arguments seeking to treat assessee’s Jetty & Trestle as building block of assets instead of plant and machinery in all cases on merits as well. Bad debts disallowance - debtors in question were in fact public sector undertakings in whose cases it could not be held that the sums in question had become actually bad - Held that:- CIT(A) quotes hon’ble apex court’s judgment in TRF Limited case (2010 (2) TMI 211 - SUPREME COURT) holding that it was nowhere incumbent for an assessee to prove that the debts in question had actually become bad w. e. f. 01. 04. 1989. There is no dispute that the assessee had been duly including the said amounts as its income in preceding assessment years or that it has actually written off the same in the impugned assessment year. We therefore hold that the CIT (A) has rightly accepted assessee’s claim of bad debts. Disallowing deferred revenue expenditure claim - Held that:- Learned Departmental Representative invites our attention to the case records containing a co-ordinate bench’s order in assessee’s case for the said earlier assessment year [2016 (8) TMI 771 - ITAT AHMEDABAD] has decided the very issue in Revenue’s favour. Mr. Mehta however seeks to draw a fine line of distinction on the ground that the relevant head of deferred revenue expenditure was not the same. He fails to indicate the relevant distinction of allowability of deferred revenue expenses in question in principle as adjudicated in Revenue’s favour. We therefore see no reason to adopt a different approach in the impugned assessment year. This issue is therefore decided against the assessee Reopening of assessment - non allowable depreciation claim having gone accepted during assessment - Held that:- There is no dispute that the Assessing Officer initiated the above reopening within four years from the end of relevant assessment year. It has further come on record that the assessee itself has accepted disallowance of depreciation of ₹ 18, 006/- (supra). Section 147 explanation 2 of the Act envisages that escapement of assessment of taxable income would arise in case of excessive depreciation computation. It is therefore a case wherein there has been a claim of non allowable depreciation claim having gone accepted during assessment. Hon’ble apex court’s judgment in Raymond Woolen Mill vs. ITO (1997 (12) TMI 12 - SUPREME COURT) holds that sufficient prima facie material available with an Assessing Officer pointing towards escapement of taxable income from being assessed is enough in setting into motion the reopening in question. We therefore find no merit in assessee’s instant argument Allowability of repair and maintenance expenditure - Held that:- We invited both parties’ attention towards assessment year 2006-07 appeal hereinabove. The assessee had moved its FRO tanks from one place to another by way of cranes and shafts in order to collect chemical from incoming cargo and for having replaced existing Naptha pipeline from Jetty to tank. There is no material on record indicating any increase in assessee’s already installed capacity in both the above instances. Or that the repair and maintenance expenditure in question pertains to replacement of assets concerned. We therefore observe that the assessee’s arguments claiming both the above items as revenue expenditure deserve to be accepted in the impugned assessment year 2004-05 as well as in 2006-07 Prior period expenditure disallowance - expenditure crystallized in the impugned assessment year - Held that:- As issue is that of evidence of crystallization. Learned counsel has filed a lengthy paper book to this effect. The same nowhere proves as to how and in what circumstances the expenditure in question got crystallized. The fact however also remains that neither the Assessing Officer nor the CIT(A) doubt genuineness of the expenditure in question in principle. We therefore direct the Assessing Officer to allow the said expenditure in the corresponding assessment year instead of the impugned assessment year after calling for necessary records as per law. This issue is taken as accepted for statistical purposes. Disallowing depreciation on foreign exchange loss on payment u/s 43A - Held that:- As assessee strongly argues that both the lower authorities have erred in making the impugned disallowance and has also filed elaborate written submission that the assets in question had in fact been acquired from within India only. There is however no rebuttal to the CIT(A)’s findings that the assessee had in fact imported machines, parts from outside India for the purpose of constructing its Jetty. Lower appellate authorities’ further conclusion on actual payment aspect has also not been controverted. We therefore find no merit in assessee’s instant substantive ground. The same stands rejected. Treating of loan restructuring expenses as capital in nature - Held that:- The assessee has admittedly made the said payment to M/s. Brescon Corporate Advisor for the purpose of loan restructuring. Pages 100 to 104 inter alia demonstrate that assessee had been paying interest at average rate @12. 89% stated to have come down to 7. 85% further reducing its average interest outgo from ₹ 55. 29crores to ₹ 47. 17crores on year to year basis. There is further no quarrel that the interest in question is otherwise allowable as Revenue expenditure. CIT vs. Gujarat State Fertilizers & Chemicals Ltd. (2013 (7) TMI 701 - GUJARAT HIGH COURT) hold that restructuring expenses are admissible as revenue expenditure.
|