TMI Blog2013 (5) TMI 868X X X X Extracts X X X X X X X X Extracts X X X X ..... passing an order after admitting the evidences and sending the same for remand report and at the time of appellate order not admitting the same and confirming the additions made of ₹ 10,90,82,621/- without any valid reasons whatsoever, and hence the order is illegal. The action of the learned CIT(A) is self contradictory and without application of mind. 4.2 The Learned CIT(A) erred in not accepting the contention of the Assessee that the addition made by the A.O. u/s. 68 of the IT Act, 1961 is bad in law and on this ground, the addition requires to be deleted, as Sec. 68 is not applicable in the case of the Assessee. 5.1 The Learned CIT(A) erred in law and in facts in confirming the Sundry Creditors balances amounting to ₹ 62,24,163/- as addition to the income of the Assessee u/s. 68 of the Income Tax Act, 1961. 5.2 The Learned CIT(A) erred in rejecting the additional evidences when no additional evidences were submitted but only legal arguments were advanced. Hence the disallowance made by the Learned CIT(A) is bad in law. 6. The Learned CIT(A) erred in law and in facts in confirming the disallowance of 1/10th of the voucher expenses as expenses for non-b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore stockyard, storage plots in the vicinity of jetty and operation of jetty and the nearby plot-jetty from where material could be transported by barges. However, the Assessee had incurred expenses relating to development of the plots and making them suited for the logistic business. The Assessee has incurred major portion of development expenses on levelling of the land, clearing the area, filling up the trenches, making and strengthening of approach roads, creating boundaries, creating drainage system. Therefore, Assessee has incurred these expenses and these expenses are mainly of logistics business. Relying upon the decision of 224 ITR 414 Ballimal Naval Kishore vs. Commissioner of Income Tax, the A.O has disallowed the claim. 3.1 The matter carried to CIT(A) and CIT(A) has confirmed the addition by observing as under : After going through the facts of the case, contents in the assessment order, remand report of the AO and the written submissions of the assessee it is understood that there is no dispute regarding the business activity of the assessee and the premises taken by the assessee for lease. As per the lease agreement dt:- 02.02.2008 the assessee has taken prem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 ITR 791 (Hyd.) viii) CIT vs. Talathi and Panthaky Associates P. Ltd. (2012) 343 ITR 309 (Bom.) ix) Smt. Nayana P. Dedhia vs. ACIT (2003) 86 ITD 398 (Hyd.) x) CIT vs. Hoechst Pharmaceuticals 113 ITR 877 xi) CIT vs. Bombay Cycle Motors Agencies 118 ITR 42 He claimed that it must be treated as revenue expenditure. 3.3 The learned DR relied upon the order of CIT(A) and he submitted that the Assessee has taken this plot on lease for only 5 years and thereafter it was handed over to the owner of the property. The Assessee has incurred these expenses which is capital expenditure in nature. Therefore, A.O and CIT(A) are justified in holding that the amount was spent for the purpose of bringing into existence new asset. Therefore, it would be a capital expenditure. 3.4 We have heard the rival contentions of both the parties. Looking to the facts and circumstances of the case, we find that it is an admitted fact on the record that the Assessee has taken the land on lease for 5 years. The lease agreement dt. 2.2.2008 is in the paper book at pg. 103 to 105. The lease expired on 1.2.2013 and it was handed back to the lessor. The Assessee has submitted letter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... val Kishore vs. Commission of Income Tax, 224 ITR 414. In this decision, we noted that the issue relates to whether the expenditure incurred on extensive repairs to the structure of the cinema building is current repairs or not. While interpreting the word current repairs , the Hon ble Supreme Court held that current repairs means expenditure on building, machinery, plant or furniture which is not for the purpose of renovation or restoration but which is only for the purpose of preserving or maintaining an already existing asset and which does not bring a new asset into existence or does not give to the Assessee a new and different advantage. The question whether the expenditure is revenue expenditure or capital expenditure was not before the Hon ble Supreme Court. Even the expenditure does not relate to the development of the land for facilitating the business. This decision, in our opinion, is not applicable to the facts of the case. 3.5 In view of the aforesaid discussion, we are of the view that the authorities below were not correct in holding that the expenditure incurred by the Assessee was capital expenditure. We, accordingly, set aside the order of CIT(A) and delete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and M/s. Natasha Minerals (outstanding payable of ₹ 3,17,17,957/-). M/s. Peninsula Minerals Overseas has raised bill for plot development, excavation and levelling of ground etc. M/s. Natasha Minerals has raised bill for ₹ 3,24,53,350/- for transportation in mining area, 10500 trips. The address of M/s. Peninsula Minerals Overseas as per the invoice was Flat no. 2B, UG-1, Model Millennium Vista, Caranzalem, Tiswadi-Goa while that of M/s. Natasha Minerals was House no. 382, Flat no.1, Tony Nagar, Sanvordem-Goa. The Assessee stated that both the concerns are owned by Mr. Saleem Ahmed. Survey was conducted and during the survey, some documents were impounded and from the impounded documents, summons under Section 131 was issued to both the parties and it was returned unserved. On the date of survey, spot inspection of the addresses of these two creditors was done. However, the said offices did not exist in the addresses. The Assessee was not able to produce the two creditors. In the office address of M/s. Peninsula Minerals Overseas it was found that there was no commercial establishment operating from the address. From the inquiry, it was found that the proprietor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that when his accounts are showing transport charges and expenses are accepted, then contract should not be doubted. 5.4 The learned DR on the other hand relied on the order of authorities below. 5.5 We have heard the rival contentions of both the parties. We find that the Assessee has produced the return of income of M/s. Peninsula Minerals Overseas and M/s. Natasha Minerals. CIT(A) has not admitted these evidence, but, in our opinion, this is not additional evidence but this is a public document. Therefore, it can be admitted at any stage. Therefore, we admit this evidence. We have already held in our order that Assessee has incurred the expenditure of ₹ 6,28,83,990/- for site development expenses carried out by M/s. Peninsula Minerals Overseas. We find that the Assessee has incurred these expenses and we have held it is revenue expenditure, therefore, site development expenses has been carried out by the Assessee. We have already held that the Assessee has filed copy of return of Mr. Salim Ahmed, proprietor of M/s. Peninsula Minerals Overseas and M/s. Natasha Minerals and in the return of income, they have already shown that they have carried out this work a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n A.Y. 2008-09, therefore, the AO disallowed the same. 7.1 The matter carried to CIT(A) and CIT(A) has also confirmed the same by observing as under : I have gone through the facts of the case, contents of the assessment order and written submissions of the assessee. It is quiet common in such nature of businesses some expenditure may not be properly accounted, or some expenditure may be personal in nature and for all expenses full details may not be available. On account of all these things that one tenth of the expenditure was disallowed by the AO. The same disallowance was made while completing the scrutiny assessment for the preceding year i.e. 2008-09 but the assessee did not prefer appeal. In view of the detailed discussion of the facts that the this ground of assessee appeal is disallowed and addition made by the AO sustained. 7.2 We have heard the rival contentions of both the parties. We find that the AO has disallowed 1/10th of the expenditure on the ground that the Assessee had made cash payment to the labourers. The AO has disallowed following the preceding year i.e. 2008-09. Therefore, when the Assessee has not disputed this amount in preceding year, there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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