TMI Blog2014 (6) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... action - the AO has specifically asked for the details and the assessee has submitted the details of payments and only thereafter the assessment has been completed - the CIT(A) concluded that the AO consciously applied his mind in the original assessment and that was the reason for quashing the reassessment. The assessee had furnished information about the payment before the AO and considers that after conscious application of mind, the AO has accepted the claim - it cannot be stated that it was not a conscious decision of the AO to allow claim of the AO to allow the claim of the assessee - also in Jindal Photo Films Ltd. Vs. DCIT [1998 (5) TMI 20 - DELHI High Court] it has been held that a claim has been considered in the original asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enditure incurred on moulds dies amounting to Rs. 1,97,360/- on the ground that the same are capital expenditure. 4. The learned Commissioner of Income Tax (Appeals) erred in fact and in law in confirming the action of AO in charging interest u/s 234B of the Act. 5. The learned Commissioner of Income Tax (Appeals) erred in fact and in law in confirming the action of AO in charging interest u/s 234D of the Act. 6. The learned Commissioner of Income Tax (Appeals) erred in fact and in law in confirming the action of AO in initiating penalty u/s. 271(1)(c) of Income Tax Act, 1961. 3. Ground No. 1 and 2 relate to reopening of the assessment u/s. 147 of the Act. 4. Brief facts of the case are that assessee filed return of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record as per the reasons recorded for re-opening of the assessment by the AO. (b) The assessee has debited Rs. 2,19,534/- towards tools and spares which inter alia includes moulds and dies of Rs. 1,97,360/-. This is a capital expenditure. The assessee herself has shown moulds and dies in the fixed assets and claimed depreciation at the rate of 25% . which were not valid for reopening the assessment. In respect of first reason in respect of unpaid sales tax of Rs. 6,181, the evidence that the same has been paid before filing the return of income u/s. 139(1) was shown to AO and no adverse view was taken on this account by AO. As far as the second reason about the debit entry of Rs. 2,19,534/- towards bills and spares is concerned, it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. In respect to tools and spares, we submit that we are involved in the business of highly mechanical product. We need tools and spares for the manufacturing of product. Life of these tools are very short and therefore the same is required to be treated as revenue expenses. In this expenses assessee has paid Rs. 1,97,360/-, these moulds are prepared according to the order received from the customer. It is not possible to us this mould in other products. Further, life of this mould is short and therefore we submit that these are revenue expenses and properly claimed by us. After such examination no addition was made thereby these expenses were treated as revenue expenses. On these undisputed facts, the ratio of the decision of the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DCIT [151 CTR 533] wherein the Court quashed the reopening where in the original assessment, the assessee's claim was accepted. In that case, it seems that the Assessing Officer has accepted the claim of the assessee after considering the decision rendered by the Gujarat High Court in another case and thereafter the assessment was reopened as the claim was not rightly allowed. In view of this fact, the CIT(A) concluded that the Assessing Officer consciously applied his mind in the original assessment and that was the reason for quashing the reassessment. But in the present case, according to him, the assessee had furnished information about the impugned payment before the Assessing Officer (without giving any reasons regarding its allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ructure development fund to acquire the membership of Coimbatore Stock Exchange and to carry on the business at the terminal of the Stock Exchange is revenue expenditure. In view of this also the reopening does not seem to be justified. We accordingly, hold that reopening of assessment was invalid and cancel the assessment. In view of the above, we have no hesitation in holding that reopening of the assessment in this case was not proper and the order passed by AO is hereby quashed as void ab-initio. Ground no. 1 2 are allowed. 9. In view of our above decision, other grounds taken by assessee do not require any adjudication. 10. In the result, assessee s appeal is allowed. Order pronounced in open court on the date mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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