9911796707
TMI Blog2012 (6) TMI 266X X X X Extracts X X X X X X X X Extracts X X X X ..... i) Whether in the facts and circumstances of the case, the Tribunal was justified in holding that the sum of Rs.16,47,766/- was not allowable as expenditure on repairs? (ii) Whether in the facts and circumstances of the case, the finding of the tribunal that the expenditure of Rs.16,47,766/- is capital in nature is inter-alia based on material not disclosed to the assessee and is hereby vitiated ? (iii) Whether in the facts and circumstances of the case, the mode of apportionment of expenditure determining the profits exempt under section 80HH & 80-I adopted by the Tribunal is tenable in law ?" 2. Brief facts necessary for deciding the aforesaid questions No.1 and 2 may be stated as follows. In the year 1988-89 the applicant Assessee set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 the CIT (A) took into consideration the aforesaid survey report of the Insurance Surveyor and on the basis of the findings recorded in the survey report dismissed the assessee's appeal. Aggrieved, the Assessee filed a further appeal before the Tribunal. The Tribunal also considered and relied the said survey report and dismissed the Assessee's appeal No.1/IND/1996 vide order dated 27.11.1996. The Tribunal held that since the plant was reconstructed with the changed design, the expenses incurred on it can only be treated as expenditure incurred on reconstruction of the plant which are to be treated as capital expenditure and the same are not allowable as revenue expenditure for repairs. 4. The facts necessary for deciding question No.3 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y was ever given by the CIT (A) to the Assessee to dispute the correctness of the said survey report which formed the basis of recording of findings against the Assessee. We find that even copy of the same was not supplied to the Assessee. The CIT (A) and the Tribunal have considered the said survey report without showing it to the Assessee and without giving opportunity to the Assessee to furnish its explanation about it by observing that the same is confidential in nature. They held that the report was available on record of the Assessing Officer which can be looked by any judicial authority in confidence, if need so arise. Having regard to this undisputedly the findings have been recorded by the CIT (A) and the Tribunal on the basis of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal are in violation of principles of the natural justice. The Assessee has been deprived of fair opportunity to object and challenge the correctness of the survey report on the basis of which opinion has been formed by the CIT (A) and the Tribunal against the Assessee. In all fairness the said survey report should have been disclosed to the Assessee and the Assessee should have been provided opportunity to explain and object the findings recorded in it before forming any opinion adverse to it. In this view of the matter the question No.2 is decided in favour of the Assessee by holding that the finding that the expenditure of Rs.16,47,766/- is capital in nature is vitiated as it is based upon the material not disclosed to the Assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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