CIT, HISAR vs. JIND COOP SUGAR MILLS LTD.

ITA/204/2010HC Punjab & HaryanaPHHC01093114201006 January 2011Author: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE AJAY KUMAR MITTAL3 pages
AI SummaryDismissed

What were the facts?

The Revenue, Commissioner of Income-tax, filed an appeal under Section 260-A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal (ITAT), New Delhi, dated April 24, 2009. The appeal pertains to Assessment Year 2003-04 and concerns two issues: the deletion of an addition made by the Assessing Officer (AO) on account of subscription and contribution to a State Federation of Co-operative Sugar Mills, and the deletion of an addition of Rs. 72,35,140/- made by the AO on account of repair and maintenance of plant and machinery. The CIT(A) had deleted these additions, and the ITAT affirmed this decision. The High Court was hearing the appeal against the ITAT's order.

What did the High Court hold?

The High Court decided both questions against the Revenue. Regarding the first issue, the Court noted that the question was covered against the Revenue by a previous order of the same High Court in CIT v. The Jind Coop Sugar Mills Ltd. for a different appeal number. For the second issue concerning the addition for repair and maintenance of plant and machinery, the Court observed that the AO had treated the expenditure as capital, while the CIT(A) and the Tribunal held it to be revenue expenditure. The Court noted that the CIT(A)'s finding for the assessment year 2002-03 on this issue had become final, and no reason was shown for a different view for the subsequent year. The Court further reasoned that expenditure incurred on repair and maintenance of plant and machinery is generally revenue expenditure. The Revenue's submission that the AO's finding was after discussion with the assessee was not considered sufficient to overturn the concurrent findings of the CIT(A) and the Tribunal, which were not shown to be perverse. Therefore, the appeal was dismissed as no substantial question of law arose.

What were the issues?

The High Court had to decide two questions of law: 1. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) was right in law in deleting the addition made by the Assessing Officer on account of subscription and contribution made to the State Federation of Co-operative Sugar Mills without appreciating that this contribution is not relating to the assessee’s business (under Section 37 of the Act). 2. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) was right in deleting the addition amounting to Rs.72,35,140/- made by the Assessing Officer on account of repair and maintenance of plant and machinery without appreciating that the said addition was made after discussion with the assessee for which the assessee had changed its stand before the Ld. CIT(A) (under Section 37 of the Act). Contentions: Revenue: For question (i), the revenue argued that the contribution was not related to the assessee's business. For question (ii), the revenue contended that the addition was made after discussion with the assessee, who had changed its stand before the CIT(A). Assessee: The judgment does not record specific arguments made by the assessee.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 37

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH.

Date of decision: 6.1.2011 Commissioner of Income-tax. -----Appellant. Vs. Jind Co-p. Sugar Mills Ltd. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. Yogesh Putney, Sr. Standing Counsel for the appellant. --- ADARSH KUMAR GOEL, J.

1.

This appeal has been preferred by the revenue under Section 260-A of the Income Tax Act, 1961 (for short, “the Act”) against the order of the Income Tax Appellate Tribunal, New Delhi dated 24.4.2009 in I.T.A. No.2399/Del/08 for the assessment year 2003-04 raising following question of law:- (i) Whether on the facts and in the circumstances of the case, the Ld. CIT(A) was right in law in deleting the addition made by the Assessing Officer on account of subscription and contribution made to the State Federation of Co-operative Sugar Mills without appreciating the facts that this contribution is not relating to the assessee’s business.

ii) Whether on the facts and in the circumstances of the case, the Ld. CIT(A) was right in deleting the addition amounting to Rs.72,35,140/- made by the

The order continues below.

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