Principal Commissioer Of Income Tax-2 v. Mono Steel (India) Ltd

IN THE HIGH COURT OF GUJARAT AT AHMEDABADR/TAX APPEAL NO. 1339 of 2018 =============================================================== PRINCIPAL COMMISSIOER OF INCOME TAX-2,VersusMONO STEEL (INDIA) LTD ===============================================================Appearance:MR MR BHATT, SR. ADVOCATE with MRS MAUNA M BHATT(174) for the PETITIONER(s) No. 1 for the RESPONDENT(s) No. 1================================================================ CORAM: HONOURABLE MS.JUSTICE HARSHA DEVANIandHONOURABLE DR.JUSTICE A. P. THAKER Date : 10/12/2018 ORAL ORDER (PER : HONOURABLE MS.JUSTICE HARSHA DEVANI) 1.By this appeal under section 260A of the Income Tax Act, 1961 (hereinafter referred to as “the Act), the appellant has challenged the order dated 30.05.2018 made by the Income Tax Appellate Tribunal, Ahmedabad Bench “A”, Ahmedabad (hereinafter referred to as “the Tribunal”) in ITA No.1925/Ahd/2014, by proposing the following question of law: “Whether the Appellate Tribunal has erred in law and on facts in rejecting the apportionment of expenses made by the assessing officer in the hands of the non-80IA units?” 2.The assessment year is 2009-10 and the corresponding accounting period is the financial year 2008-09. During the year under consideration, the Assessing Officer observed that apportionment of certain expenses between Power Plant and Sponge Iron Plant has not been correctly done which has resulted in understatement of expenses to the tune of Rs.40,17,406/- attributable to the power plant. The Assessing Officer, accordingly, increased the common and indivisible expenses to the power plant by the aforesaid amount of Rs.40,17,406/- and consequently, reduced the eligible deduction under section 80I(4) of the Act to that extent. 3.The assessee carried the matter in appeal before the Commissioner (Appeals), who allowed the appeal preferred by the assessee relying upon the assessee’s own case for assessment year 2008-09. Revenue carried the matter in appeal before the Tribunal, but did not succeed. 4.Mr. M. R. Bhatt, Senior Advocate, learned counsel with Mrs. Mauna Bhatt, learned senior standing counsel for the appellant reiterated the grounds set out in the memorandum of appeal as well as the reasoning adopted by the Assessing Officer. 5.From the facts as emerging from the record, it appears that for assessment year 2008-09, in the assessee’s own case, the Commissioner (Appeals) had recorded that the assessee was maintaining separate accounts for both plants. It had identified all direct expenses. The Commissioner (Appeals) had re-appreciated all these details and worked out that adjustments made on account of five types of expenditure. It was noted that the assessee had contended before the Assessing Officer that the power plant was newly purchased 4.Mr. M. R. Bhatt, Senior Advocate, learned counsel with Mrs. Mauna Bhatt, learned senior standing counsel for the appellant reiterated the grounds set out in the memorandum of appeal as well as the reasoning adopted by the Assessing Officer. 5.From the facts as emerging from the record, it appears that for assessment year 2008-09, in the assessee’s own case, the Commissioner (Appeals) had recorded that the assessee was maintaining separate accounts for both plants. It had identified all direct expenses. The Commissioner (Appeals) had re-appreciated all these details and worked out that adjustments made on account of five types of expenditure. It was noted that the assessee had contended before the Assessing Officer that the power plant was newly purchased and was an automatic plant which required minimum workmen. Secondly, the plant was under warranty period and all the minor maintenance of on-going expenses were incurred by the manufacturers. It was also pointed out that sponge iron plant undertaking had taken bank loan for installing plant in the year 2005-06 and had direct nexus with the said loan of the said sponge iron plant, whereas there were no financial charges insofar as the power plant undertaking is concerned. It had initially raised rupees four crores as equity capital and thereafter, rupees seven crores were raised from family members which is also reflected in the main books of the company. Thus, there was no financial charge. No fuel was used in the power plant which is steam based and therefore, there was no allocation from fuel expenditure. The Commissioner (Appeals) also examined details of maintenance expenditure, that is, repairs, stores and spares and found that there was no maintenance cost during these years because it was under warranty. After appreciating the material on record, the Commissioner (Appeals) had directed the Assessing Officer not to reduce Rs.27,95,329/- out of eligible profit on account of allocation of expenditure. The Tribunal after re-appreciating the evidence on record, has concurred with the findings recorded by the Commissioner (Appeals). 6.Having regard to the fact that the conclusion arrived at by the Tribunal is based upon concurrent findings of fact recorded by it after appreciating the material on record, in the absence of any perversity being pointed out in the impugned order, the same does not give rise to a question of law, much less, a substantial question of law, warranting interference. 7.The appeal, therefore, fails and is, accordingly, summarily dismissed. (HARSHA DEVANI, J) B.U. PARMAR (A. P. THAKER, J)