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TAXAP/46/2008 3/ 3 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No.46 of 2008
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THE
INCOME TAX OFFICER, WARD-IBHARUCH NOW REPRESENTED BY THE - Appellant
Versus
NARMADA
AGRO INDUSTRIES - Opponent
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Appearance :
MR
KM PARIKH for Appellant.
None for
Opponent.
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CORAM:
HONOURABLE
MR. JUSTICE K. A. PUJ
and
HONOURABLE
MR. JUSTICE BANKIM N. MEHTA
Date
: 06/08/2008
ORAL
ORDER
(Per
: HONOURABLE MR. JUSTICE K. A. PUJ)
The
Revenue has filed this Tax Appeal under Section 260A of the Income
Tax Act, 1961 [?Sthe Act?? for short] for assessment year 1995-96
proposing to formulate the following substantial question of law:
?SWhether the
Hon’ble ITAT was right in law and on facts in holding that the
expenditure of Rs.14,73,385/- for synchronization of various
equipments for improving the production and efficiency is of revenue
nature, instead of treating the same as capital expenditure???
2. While going
through the orders passed by the authorities below, this Court has
found that the Assessing Officer has reopened assessment under
Section 143(3) read with Section 147 of the Act and thereby made
additions of Rs.14,73,385/- treating the same as capital expenditure
instead of revenue expenditure.
3. The said
assessment was challenged by the assessee before the CIT (Appeals) on
both the counts, namely; on legality challenging reopening of the
assessment as well as on merits. The CIT (Appeals) has decided the
appeal in favour of the assessee and held that the Assessing Officer
was not justified in treating the expenditure as capital expenditure
after reopening the case under Section 147 of the Act. The Revenue
took up the matter before the Tribunal. From the Tribunal’s order, it
appears that the Tribunal has not given any finding with regard to
validity of reopening of the assessment. It is also not borne out
from the record as to whether the Revenue has taken these grounds
before the Tribunal. The Tribunal has decided the matter on merits
and held that the expenditure by its very nature, viz. electricity
expenses, fuel expenses, hexine expenses and material handling
expenses aggregating to Rs.14,73,385/- is for synchronization of
various equipments for improving the production and efficiency, which
seems to be revenue in nature.
4. At this stage,
Mr.K.M.Parikh, learned Standing Counsel appearing for the Revenue has
submitted that the Revenue wants to prefer Misc. Application before
the Tribunal seeking finding on reopening of the assessment. He has,
therefore, requested that either the matter may be kept pending or
the Revenue be given liberty to move an appropriate note before this
Court to agitate this issue on merits in case the Revenue’s
Rectification Application is rejected by the Tribunal.
5. Considering the
above submission of Mr.Parikh, we are of the view that no useful
purpose would be served to keep this matter pending as the Revenue
has still not preferred any Misc. Application and even after
preferring such application, it is not known as to how much time the
Tribunal will take in disposing of the matter. We are, therefore,
disposing of this Tax Appeal without expressing any opinion on merits
and reserving liberty to file appropriate note for revival of this
Tax Appeal in case the Tribunal rejects the Misc. Application that
may be preferred by the Revenue seeking finding on reopening of
assessment.
Subject to the
aforesaid observations, this Tax Appeal is dismissed.
[K.A.
Puj, J.]
[Bankim
N. Mehta, J.]
Rajendra
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