ROYAL SUITINGS PRIVATE LIMITED,BHILWARA vs. ITO, WARD-1, BHILWARA

PDF · subscribers
ITA 261/JODH/2019Status: DisposedITAT Jodhpur09 August 2023AY 2010-113 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the expenditure, having been classified as revenue expenditure by the ITAT, must be allowed as a deduction even for MAT calculation. The AO was directed to allow the said expenditure.

What were the facts?

The assessee claimed depreciation on additions to plant and machinery, which was disallowed. The ITAT directed that the expenditure be allowed as revenue expenditure. However, the AO, while giving effect to the ITAT's order, did not allow this deduction for MAT calculation.

What were the issues?

Whether revenue expenditure, as directed by the ITAT, should be allowed as a deduction for the purpose of calculating MAT liability.

Which sections of the Income-tax Act were involved?

Section 154

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JODHPUR BENCH, JODHPUR

Before: SHRI PAVAN KUMAR GADALE & DR. DIPAK P. RIPOTE

For Respondent: Ms. Nidhi Nair, JCIT-DR
Hearing: 09.08.2023Pronounced: 09.08.2023

ORDER

PER DR. DIPAK P. RIPOTE, AM:

1.

This is an appeal filed by the assessee against the order of ld. CIT(A), Ajmer dated 10.06.2019 emanating from the order of Income Tax Officer, Ward-1, Bhilwara passed under section 154 dated 31.08.2018. The grounds of appeal

raised by the assessee are as under:- “1. That assessee company made addition in plant & machinery of Rs. 21, 45,124/- and claimed depreciation thereon.

2. That A.O. disallowed the depreciation on these additions and completed the assessment by stating that these are not plant & machinery but fails to allow as revenue expenditure against which filed appeal an appeal was dismissed.

Royal Suiting Pvt. Ltd 3. That assessment was completed u/s 143(3) against which assessee preferred an appeal before CIT (A) Ajmer and appeal was dismissed.

4.

That assessee company filed appeal before ITAT Jodhpur and ITAT allowed the appeal and directed to A.O. to allow as revenue expenditure of Rs. 21,45,124/-.

5.

That assessee company filed application before ITO u/s 154 to allow the revenue expenditure as directed by ITAT but A.O. partly allow the relief by stating that relief by the ITAT by reducing the book profit for calculation of MAT and rejected the application.

6.

That all expenditure of Rs. 21, 45,124/- which are in revenue nature should be allowed for purpose of calculation for MAT tax liability which A.O. does not accepted application filed u/s 154 of the IT act.

7.

That assessee company creavase to add or amend any grounds of appeal at time of hearing.”

2.

We have heard ld. DR and perused the record.

3.

It is observed that the ITO, Ward-1, Bhilwara while giving effect to the order of the ITAT in dated 14.03.2016 for assessment year 2010-11 has not allowed the assessee’s claim of deduction of Rs. 21,45,124/- from the book profit for calculation of MAT. Therefore, assessee had filed an application for rectification under section 154 of the Act. The ITO rejected assessee’s application for rectification. We have perused order of the ITAT in the case of assessee in ITA No. 72/Jodh/2015 for assessment year 2010-11 dated 2 Royal Suiting Pvt. Ltd 14.03.2016. It is observed that ITAT held that the expenditure of Rs. 21,45,124/- claimed by assessee is a Revenue expenditure and hence is an allowable expenditure. Once ITAT has held that the expenditure of Rs. 21,45,124/- is a Revenue expenditure then it is the duty of the ITO to allow the said expenditure as deduction. Even under MAT, the said amount will be Revenue expenditure only and hence ITO has to allow. 4. In these facts and circumstances of the case, the ITO is directed to allow the said expenditure as Revenue expenditure even for the purpose of MAT calculation. Accordingly grounds of appeal

raised by the assessee are allowed. 5. In the result, the appeal of the assessee is allowed. Order pronounced in the Open Court on 09th August, 2023.

More judgments on Section 154

All 8,676 judgments and leading authorities on Section 154 →

Recent GST High Court judgments

Search GST case law →