TMI Blog2012 (11) TMI 1092X X X X Extracts X X X X X X X X Extracts X X X X ..... of interest under section 234B of the Act is mandatory. - Decided against the assessee. - ITA Nos. 414, 415 & 416/Mds/2012 - - - Dated:- 27-11-2012 - Shri Abraham P. George, Accountant Member And Shri V. Durga Rao, Judicial Member Appellant by: Shri K. Ravi, Advocate Respondent by: Shri N. Sankaran, CIT-DR O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: Since common issues are involved in all these appeals filed by the assessee, they were heard together and are being disposed of by this common order for the sake of convenience. These appeals are directed against the consolidated order passed by CIT(Appeals)-I, Coimbatore dated 14-12-2011 for the assessment years 1993-94, 1994-95 and 1998-99. 2. The facts involved in all these appeals are similar. The assessee company is engaged in the business of manufacture cum sale of cotton yarn and fabric and generation of electricity. The assessee had filed its return of income for the assessment years 1993-94 and 1994-95 declaring nil taxable income and for the assessment year 1998-99 the assessee declared the total income at ₹ 2,85,77,710 under sec. 115JA of the Income Tax Act, 1961 ('the Act' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Commissioner of Income Tax (Appeals). This tax case appeal stands disposed of. 4. Following the same, while setting aside the order of the Commissioner (Appeals) as well as that of the Tribunal impugned in this appeal, the matter is remitted back to the Commissioner of Income Tax (Appeals) to re-consider the issue, in the light of the directions given by the Supreme Court in the above referred to Special Leave Petition as well as Civil Appeal. The questions of law are not answered and are referred back to the Commissioner of Income Tax (Appeals). 5. This Tax Case (Appeal) stands disposed of. Consequently, the connected MP is closed. No costs. 4. As per the directions of the Hon ble jurisdictional High Court, the learned CIT(Appeals) decided the issue as under : 9. .............it is clear from perusal of the facts of the present appeal that the ratio of the decision of the Hon ble Apex Court in the case of M/s. Mangayarkarasi Mills (P) Ltd. (supra) can be squarely applied in the instant case. The questions raised by the Hon'ble Supreme Court in the case of Ramaraju Surgical Cotton Mills Ors regarding the tests for determining the nature of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penditure incurred by the assessee for the purpose of replacement of Ring Frames is revenue expenditure or capital expenditure. The learned CIT(Appeals) as per the directions of the Hon ble jurisdictional High Court by following the decisions of the Hon'ble Supreme Court in the case of CIT v. Ramaraju Surgical Cotton Mills Ltd. (294 ITR 328) and in the case of CIT v. Sri Mangayarkarasi Mills P. Ltd. (315 ITR 114) (SC) , has held that the expenditure incurred by the assessee is capital expenditure. The very same issue was considered by the Tribunal in the case of The Kumaran Mills Ltd. v. ACIT in ITA No. 754/Mds/2012 dated 12-09-2012. The relevant portion in the said decision is reproduced hereunder: 5. We have heard both the sides, perused the records and gone through the orders of the authorities below. The only issue for adjudication before us is whether the expenditure incurred for the purpose of replacement of Draw Frame is revenue expenditure or capital expenditure. The learned CIT(Appeals) by considering the entire facts of the case and also the decisions of various High Courts and the Hon'ble Supreme Court including the decision in the case of CIT v. Ramaraju Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt year 1988-89, whether the mill is an integrated whole or not, whether the replacement of machines resulted in increased capacity or not, will have no bearing and when any item belonging to the block is removed, its value is reduced and if any new item comes in its place, its value is added to the block. In view of the above, it is submitted that the third substantial question of law is also covered as per the judgment of this Court dated 25.04.2011 in Tax Case (Appeals) Nos. 71 72 of 2008. In view of the said submission made by the learned counsel for the appellant, we hold that the third question of law is also answered in favour of the revenue and against the assessee. 7. In view of the decisions of the Hon'ble Supreme Court in the case of CIT v. Ramaraju Surgical Cotton Mills Ltd. (supra), CIT v. Sri Mangayarkarasi Mills P. Ltd. (supra) and the decision of the Honourable jurisdictional High Court in the case of CIT, Madurai v. Madura Coats (supra), we find no infirmity in the order passed by the learned CIT(Appeals). His order is accordingly confirmed and the appeal of the assessee is dismissed. 8. Respectfully following the above decision of the co-ordinate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee relied on the decision of the Hon ble Karnataka High Court in the case of CIT v. ITO (1993) 70 Taxman 423 (Kar). The case of the assessee is that the Assessing Officer has levied interest u/s 220(2) of the Act without considering the aforesaid circular. After careful consideration of the assessment order, we find that it is not clear how the Assessing Officer has levied the interest u/s 220(2) of the Act. We therefore direct the Assessing Officer to consider the aforesaid circular and decide the levy of interest u/s 220(2) de novo in accordance with law. This additional ground raised by the assessee is therefore allowed for statistical purposes. 13. Insofar as the levy of interest u/s 234B of the Act is concerned, the learned counsel for the assessee has submitted that unless the interest is charged in the assessment order, no interest can be levied u/s. 234B of the Act. For that proposition, he relied on the decision of the Himachal Pradesh High Court in Income-tax Appeal No. 76 of 2006 dated 19-09-2012 in the case of CIT v. M/s. Ruchira Papers Ltd. 14. The learned DR supported the order passed by the Assessing Officer. He further submitted that the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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