Evergreen Engineering Company P. Ltd, ... vs Assessee

आयकर अपील य अ धकरण, मुंबई यायपीठ "ई" मुंबई IN THE INCOME TAX APPELLATE TRIBUNAL" E" BENCH, MUMBAI BEFORE S/SHRI B.R.BASKARAN (AM) AND AMIT SHUKLA, (JM) सव ी बी.आर.बा करन, लेखा सद य एवं अ मत शु ला, या यक सद य के सम

आयकर अपील सं./I.T.A. No.1185/Mum/2013 ( नधारण वष / Assessment Year :2009-10)

Evergreen Engineering बनाम/ Asstt. Commissioner of Income Company Pvt Ltd., Vs. Tax (OSD)-8(1), 35/B, Mahal Industrial Estate, Aayakar Bhavan, M K Road, Mahakali Caves Road, Mumbai-400020 Andheri(E), Mumbai-400093 (अपीलाथ /Appellant) .. ( यथ / Respondent)

थायी ले ख ा सं . /जीआइआर सं . /PAN/GIR No. :AAACE2499L

अपीलाथ ओर से / Assessees by Shri Paresh Shaparia यथ क ओर से/Revenue by Shri Love Kumar

सुनवाई क तार ख / Date of Hearing : 20.4.2015 घोषणा क तार ख /Date of Pronouncement : 24.4.2015

आदे श / O R D E R

PER B.R. BASKARAN (AM)

The solitary issue urged in the appeal filed by the assessee is whether the Ld CIT(A) was justified in upholding the addition of Repairs and maintenance expenses of Rs.19,12,723/- by treating the same as Capital expenditure.

2. We heard the parties and perused the record. The Ld A.R invited our attention to page no.6 of the paper book and submitted that the expenditure of Rs.19,12,723/- was incurred only to repair and maintain the 2 I T A N o . 1 1 8 5 / Mu m / 2 0 1 3

existing buildings. The nature of expenses incurred by the assessee are given in page no.6 as under:-

EVERGREEN ENGINEERING CO. PVT. LTD.

PAN: AAACE2499L ASSESSMENT YEAR: 2009-10

DETAILS OF BUILDING REPAIRS & MAINTENANCE PAYMENTS TO M/s PRABHU CONSTRUCTIONS Sr.No. Date Bill Particulars Rs. Rs.

No.

I Factory Building (Unit-I) at Andheri (East) (21389Sq.Ft) Plot no.B-35, Mahal Industrial Estate, Mahakali Caves Road, Gundavli, Andheri (East), Mumbai - 400093 (Yr 1971-72) 16/04/2008 6 Repairs & replacement of Cota 143,869 Flooring & Polishing of 1742.50 Sq Ft

16/04/2008 7 Work of Terrace water proofing 3041.56 sq 387,546 ft.

24/05/2008 5 Tiles Flooring, Polishing, Structure with 105,595 Concrete, Bricks Masonary Plaster, replacement of Sintex Tank of Canteen Terrace etc.

15/09/2008 14 Polishing stair case, masosary, Cota 139,760 Flooring, white wash, painting etc

29/10/2008 26 Repair & replacement for welding department, terrace, demolishing & concrete work 700 sq ft, plastering 15681 sq ft, cota flooring 1556 sq ft, replacement 156,667 933,437 of Tiles 197.04 sq ft etc.

II Factory Building (Unit-II) at Range Office. Vasai (E) (Plot Area 8135 sq ft - Built Up Area 3468.27 Sq Ft) Plot no. 3, Seth Atmaram Shah Road, near Range Office, Village - Gokhiware, Taluka - Vasai, Dist. - Thane (Yr 1997-98)

04/05/2008 9 Replacement of Flooring 2200 Sq Ft & 188,234 Plastering 43 sq ft.Concreting

03/09/2008 12 Replacement of PVC Nala pipes, Tal Patri, 50,086 Plumbing fitting, Damber filling, Shutter repairing RCC Demolishing, Bricks

3 I T A N o . 1 1 8 5 / Mu m / 2 0 1 3

Masonary, Plastering, 20/06/2008 10 Partitions, welding 110,348 348,667 III Factory Building (Unit-V) at Chinchpada, Vasai (E)(28328.20 Sq ft) Plot No. 9, 10, 16 & 17, Chinchpada, Village - Gokhiware, Taluka - Vasai, Dist. - Thane (Yr 2004-05)

04/09/2008 13 Demolishing, concrete finish, tiles flooring, 67,491 white wash,etc

1/12/2008 27 Demolishing concrete, wall demolishing, 96,045 rubber removing, soil excavation, casting, tiling , plumbing fitting, painting etc

1/12/2008 28 Fabrication work: replacing old channels 125,761 plate removed and on old structure chequered plate fixing, welding, grouting etc .

28/01/2009 38 Painting & Civil Work - Sandtex painting -

running Sq ft 18596.32, Oil paint 470.82 Sq Ft, Plastering, plaster chipping, floor [

repairing , white wash etc. 226,351

05/03/2009 44 Plastering, concrete, plumbing, painting sandtex, white wash, painting main gate, oil paint etc 114,971 630,619

Total 1,912,723

3. A perusal of the above said expenditure would show that there is merit in the submissions of the assessee. Though the Ld D.R strongly defended the order of Ld CIT(A), yet we are convinced that the assessee has incurred the impugned expenses on repair and maintenance of the existing building by replacing flooring and carrying out other works. Accordingly, we are of the view that the impugned expenditure cannot be in the nature of Capital expenditure in the absence of creation of any new asset of enduring nature. Accordingly, we set aside the order of Ld CIT(A) and direct the assessing officer to allow the impugned expenditure as 4 I T A N o . 1 1 8 5 / Mu m / 2 0 1 3

revenue expenditure. Consequent adjustment shall also be made with regard to the depreciation allowed by the assessee.

4. In the result, the appeal filed by the assessee is allowed.

The above order was pronounced in the open court on 24th Apr, 2015.

घोषणा खल ु े यायालय म दनांकः 24th Apr, 2015 को क गई ।

Sd sd (अ मत शु ला / AMIT SHUKLA) (बी.आर.बा करन / B.R. BASKARAN) या यक सद य / JUDICIAL MEMBER लेखा सद य / ACCOUNTANT MEMBER

मुंबई Mumbai:24th Apr,2015.

व. न.स./ SRL , Sr. PS

आदे श क त ल प अ े षत/Copy of the Order forwarded to :

1. अपीलाथ / The Appellant

2. यथ / The Respondent.

3. आयकर आयु त(अपील) / The CIT(A)- concerned

4. आयकर आयु त / CIT concerned

5. वभागीय त न ध, आयकर अपील य अ धकरण, मंब ु ई/ DR, ITAT, Mumbai concerned

6. गाड फाईल / Guard file.

आदे शानस ु ार/ BY ORDER, True copy सहायक पंजीकार (Asstt. Registrar) आयकर अपील य अ धकरण, मुंबई /ITAT, Mumbai