The Commissioner Of Income Tax-8 v. M/S. Sanghvi Filaments Pvt. Ltd

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 1192 OF 2011 The Commissioner of Income Tax-8..Appellantversus M/s. Sanghvi Filaments Pvt. Ltd...Respondent -------- Mr. Arvind Pinto with Mr. N.A.Kazi for the Appellant. None for the Respondent. ............. CORAM : J.P. DEVADHAR &M.S.SANKLECHA, JJ. DATE : 24[th] January, 2013 P.C. : In this appeal by the revenue, the basic dispute is: “ Whether respondent-assessee is entitled to claim administrative expenses, depreciation, manufacturing expenses, preliminary expenses, interest expenses and payment to employees, when according to the revenue no manufacturing activities was carried out for the assessment year 2003-04?” The Assessing Officer disallowed various expenses claimed by the respondent-assesseee on the ground that the expenses on account of depreciation, wages etc. could not have been claimed by a unit which is closed. 3In first appeal, the Commissioner of Income Tax (the CIT(A)) allowed the appeal partly by holding that manufacturing activities was carried out by the respondent-assessee so as to keep factory in ready condition to resume full fledged manufacturing cannot be disallowed. However, CIT(A) only allowed expenses on account of interest and depreciation, while disallowing all other expenses. 4 In second appeal, the Tribunal by its order dated 28.04.2010 allowed the respondent-assessee's appeal. On examination of facts on record, the Tribunal concluded that manufacturing process was carried out during the relevant assessment year and revenue has not brought on record any evidence to the contrary. Further, the expenses claimed by the respondent-assessee was held to be a business expenditure and therefore allowable. On the aforesaid finding which are essentially of facts, the respondent-assessee's appeal was allowed. 5 We note that the order of the Tribunal is based on a finding of fact namely that manufacturing activity was carried out by the respondent-assessee during the relevant assessment year. This finding of fact has not been shown to be perverse. In the circumstances, as the decision is based on a finding of fact, the appeal cannot be entertained. 6Accordingly, the appeal is dismissed with no order as to costs. (M.S. SANKLECHA, J.) (J.P.DEVADHAR, J.)