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TMI Blog2015 (8) TMI 599X X X X Extracts X X X X X X X X Extracts X X X X ..... . [2009 (7) TMI 17 - SUPREME COURT ] is only the disallowance of the cost of two comber machines and one auto coner, proceeded to adjudicate that even the cost of 339 units of yarn clearers is capital expenditure, even though the said issue was not before the hon'ble Supreme Court. Since the issue is not arising out of the orders of any of the lower authorities originally is decided by the Commissioner of Income-tax (Appeals) which is not only incorrect but also beyond his jurisdiction. It is a mistake apparent from record also. Thus we modify the order of the Commissioner of Income-tax (Appeals) restricting the disallowance only to cost of two comber machines and one auto coner. Ground No. (ii) raised by the assessee is allowed. Since t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest under sections 234B and 234C of the Act. 3. At the time of hearing, counsel for the assessee submits that except ground No. (ii), the other three grounds are not pressed and may be treated as withdrawn. Therefore, the above ground Nos. (i), (iii) and (iv) relating to disallowance of cost of two comber machines, cost of auto coner and charging of interest under sections 234B and 234C of the Act are dismissed as withdrawn. 4. The only ground remains for adjudication in the appeal in I. T. A. No.1354/Mds/2013 is whether of cost of 339 units of yarn clearers is revenue expenditure or capital expenditure. 5. Counsel for the assessee submits that the Commissioner of Income-tax (Appeals) for the first time disallowed the expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income-tax (Appeals) also held that cost of 339 units of yarn clearers as capital expenditure which is never a subject matter of dispute. Against the order of the Commissioner of Income-tax (Appeals) the assessee is in appeal before us. So far as the grounds raised in respect of disallowance of cost of two comber machines and one auto coner is concerned, the assessee is not pressing the grounds. Coming to the disallowance of the cost of 339 units of yarn clearers treating them as capital expenditure, counsel submits that this issue is never in dispute before any of the authorities as the Assessing Officer while completing the assessment accepted that this expenditure as revenue expenditure and no disallowance was made. Counsel submits th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this is a revenue expenditure is accepted. The Assessing Officer treated the cost of two comber machines and one auto coner as capital expenditure as against the claim of the assessee as revenue expenditure. The assessee carried the matter to the Commissioner of Income-tax (Appeals) and the Commissioner of Income-tax (Appeals) by order dated November 5, 2004 allowed the claim of the assessee holding that costs of comber machines and auto coner are revenue expenditure. Further appeal was preferred by the Revenue to the Tribunal and the Tribunal by order dated December 17, 2006 in I. T. A. No. 425/Mds/2005 upheld the order of the Commissioner of Income-tax (Appeals) and dismissed the appeals of the Revenue. The Department seems to have c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is a mistake apparent from record also. Thus we modify the order of the Commissioner of Income-tax (Appeals) restricting the disallowance only to cost of two comber machines and one auto coner. Ground No. (ii) raised by the assessee is allowed. 8. Since the Commissioner of Income-tax (Appeals) has no jurisdiction to decide the issue which is not before the lower authorities at any stage originally, he could have rectified his order on the application filed by the assessee. The assessee preferred an appeal against the order of the Commissioner of Income-tax (Appeals) in rejecting the petition filed under section 154 of the Act. In view of our above findings, we allow the appeal of the assessee filed against the order under section 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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