IN INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, B MUMBAI Before Shri Joginder Singh, Judicial Member, and Shri D. Karunakar Rao, Accountant Member ITA No.8252/Mum/2010 Assessment Year: 2007-08 Nirlon Ltd. DCIT-9(2), Pahadi Village, Western Aayakar Bhavan, Express Highway, Mumbai-400020 Goregaon (East), Vs. Mumbai-400063 (Assessee) (Revenue) PAN. No.AAACN4042N Assessee by Shri Nitesh Joshi Revenue by Shri Aarsi Prasad-DR Date of Hearing : 14/09/2016 Date of Order: 05/10/2016 O R D E R Per Joginder Singh(Judicial Member) assessee is aggrieved by impugned order dated 08/10/2010 of ld. First Appellate Authority, Mumbai. 2 ITA No.8252/Mum/2010 Nirlon Ltd. first ground, raised by assessee pertains to confirming disallowance of expenses on repairs, amounting to Rs.2,83,700/-. 2. During hearing, Shri Nitesh Joshi, ld. counsel for assessee contended that expenses were incurred for laying of drainage pipeline from factory building to gate of factory. It was argued that it is new pipeline, therefore, is of capital in nature. Alternatively, it was argued that depreciation has been allowed at rate of 1% which should have been at rate of 10%. ld. DR, Shri Aarshi Prasad, defended addition/impugned order. 2.1. We have considered rival submissions and perused material available on record. facts, in brief, are that assessee is public limited company, declared loss of Rs.3,98,08,563/- in its return filed on 29/10/2007. case of assessee was selected for scrutiny, therefore, required notices were issued. On perusal of profit & loss account, it was observed by Assessing Officer that assessee has debited sum of Rs.2,83,700/- under head repairs . assessee was asked to furnish necessary details. It was found that assessee made payment of Rs.2,73,700/- for laying pipeline. assessee vide letter dated 29/09/2009 submitted that bills issued by M/s Mihir Constructions by claiming that these expenses were incurred for maintenance and repair charges, which were necessary for running business. In bill, issued 3 ITA No.8252/Mum/2010 Nirlon Ltd. by M/s Mihir Construction, work was like exhibition of soil, foundation, structure work, which were undertaken for purposes of construction of new pipeline in factory premises. It is noted that ratio laid down in CIT vs Coal Shipment Pvt. Ltd. (82 ITR 902) with respect to benefit of enduring nature, clarifies position. Identical ratio has been laid down in Ballimal Naval Kishore & Ors. Vs CIT 224 ITR 414 (SC). In present appeal, new pipeline was laid down by assessee, therefore, it is of enduring nature and thus is capital expenditure, thus, on this issue, we upheld stand of Ld. Commissioner of Income Tax (Appeal). So far as, depreciation at rate of 10% is concerned, even ld. Assessing Officer at page-4 has mentioned depreciation at rate of 10% but due to typographical error has worked out same at Rs.2,837/-, whereas, it should have been 28,370/-. To this extent, we agree with plea of ld. counsel, therefore, this ground is partly allowed. 3. next ground raised by assessee pertains to confirming addition u/s 50C, amounting to Rs.50,64,086/- to capital gains. assessee has raised additional ground that CIT(A) ought to have directed Assessing Officer to refer valuation of property to Valuation Officer for arriving at value. Considering totality of facts and ground raised by assessee, we remand this issue to file of Assessing Officer to 4 ITA No.8252/Mum/2010 Nirlon Ltd. consider claim of assessee and decide in accordance with law. assessee be given opportunity of being heard, thus, this ground/additional ground is allowed for statistical purposes. 4. next ground pertains to confirming disallowance of excise modvat of Rs.4,89,15,000/- claimed as expense. ld. counsel invited our attention to page- 6 of assessment order and relevant finding of Ld. Commissioner of Income Tax (Appeal). ld. DR defended addition. 4.1. We have considered rival submissions and perused material available on record. We have also perused submission of assessee (para-6, page-6) of assessment order and there is finding that assessee did not provide any supportive documents in respect of its claim that additional excise duty was paid for nylon tyrecord yarn. Admittedly, onus is upon assessee to prove genuineness of claim. Considering totality of facts, this ground, as agreed by ld. counsel for assessee, is remanded back to file of ld. Assessing Officer. ld. Assessing Officer is directed to examine factual matrix and after affording due opportunity to assessee decide in accordance with law. Thus, this ground is allowed for statistical purposes. 5. last ground raised by assessee pertains to confirming disallowance of store inventory written off 5 ITA No.8252/Mum/2010 Nirlon Ltd. amounting to Rs.2,92,33,000/-. ld. counsel for assessee contended store inventory was written off. However, we find that necessary details were not provided by assessee before ld. Assessing Officer. It was found that manufacturing and other expenses increased from Rs.812,90 lakhs to Rs.2811.26 lakhs during year while sales income reduced from Rs.852.28 lakhs to 836.81 lakhs as compared to last year. There is uncontroverted finding in assessment order that assessee did not furnished necessary details and merely made wage submissions. ld. counsel for assessee contended that assessee is in position to furnish necessary details. Considering totality of facts, this ground is also sent to file of ld. Assessing Officer to examine factual matrix and decide in accordance with law. assessee is directed to produce necessary details of its claim before ld. Assessing Officer. Thus, this ground is allowed for statistical purposes only. However, it is made clear that so far as merits of appeal is concerned, we find no infirmity in conclusion of Ld. Commissioner of Income Tax (Appeal). Since, mandate of Constitution of India, as per Article-265, is to levy and collect due taxes and considering factual matrix that assessee will furnish necessary details to substantiate its claim, we are allowing appeal of assessee for statistical purposes. 6 ITA No.8252/Mum/2010 Nirlon Ltd. Finally, appeal of assessee is allowed for statistical purposes. This order was pronounced in open court in presence of ld. representative from both sides at conclusion of hearing on 14/09/2016. Sd/- Sd/- (D. Karunakar Rao) (Joginder Singh) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated : 05/10/2016 P.S/. .Copy of Order forwarded to : 1. Appellant (Respective assessee) 2. Respondent. 3. CIT, Mumbai. 4. CIT(A)- , Mumbai, 5. DR, ITAT, Mumbai 6. Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, Mumbai Nirlon Ltd. v. DCIT-9(2), Mumbai