The Principal Commissioner Ofincome Tax-2, Kolkata v. M/S. Kalyanpur Cement Limited

OD-14 IN THE HIGH COURT AT CALCUTTASpecial Jurisdiction (Income Tax)ORIGINAL SIDE THE PRINCIPAL COMMISSIONER OFINCOME TAX-2, KOLKATA -Versus- M/S. KALYANPUR CEMENT LIMITED Appearance:Mr. Tilak Mitra, Adv....for the appellant. Mr. Avro Majumdar, Adv....for the respondent. BEFORE: The Hon’ble JUSTICE T.S. SIVAGNANAM The Hon’ble JUSTICE HIRANMAY BHATTACHARYYA The Court : This appeal has been filed by the revenueunder Section 260A of the Income Tax Act (the ‘Act’ in brevity) ischallenging the order dated 6[th] October, 2017 passed by the IncomeTax Appellate Tribunal, B-Bench, Kolkata (the ‘Tribunal’) in ITANo.901/Kol/2015 for the assessment year 2010-11. The revenue has raised the following substantial questionof law for consideration: “a)Whether on the facts and circumstances of the casethe Learned Income Tax Appellate Tribunal, has erred in lawin upholding the decision of the commissioner of Income Tax(Appeals) allowing the expenditure of Rs.2,67,46,867/- incurred by the assessee on repair of Plant and Machinerywithout considering that the repair of the Plant andMachinery gives long enduring benefit to the assessee formany years?” We have heard Mr. Tilak Mitra, learned Counsel for theappellant/revenue and Mr. Avro Majumdar, learned senior counselfor the respondent/assessee.The short issue which falls for consideration is whetherthe assessee was right in claiming a sum of Rs.6,95,01,149/- underthe head consumer of stores, spares and consumables andRs.8,89,13,424/- under the head repairs and maintenance tomachinery as manufacturing expenses in Schedule-12 of the annualaccounts. The assessee’s contention was that the repair andmaintenance was necessary to keep the plant in running condition.However, the Assessing Officer did not agree with the same andheld that the expenses on plant and machinery ultimately gave anenduring benefit to the assessee and, therefore, it is a capitalexpenditure and it cannot be claimed as deduction as revenueexpenditure. Aggrieved by such order, the assessee preferredappeal before the Commissioner of Income Tax (Appeals)/CIT(A)-2who had allowed the appeal by order dated 16[th] February, 2015.Aggrieved by the same, revenue preferred appeal beforethe Tribunal. The Tribunal after noting the facts of the case, aswell as the decisions in the assessee’s own case for theassessment year 2008-09 which was decided in favour of the assessee in ITA No.1956/Kol/2013 dismissed the appeal filed by therevenue. We have perused the order passed by the Tribunal and wefound that the Tribunal rightly upheld the decision of the CIT(A)who had taken note of the decision of the Hon’ble Supreme Court inthe case of Commissioner of Income Tax vs. Saravana Spinning Mills(P) Ltd. reported in (2007)7 SCC 298 wherein it was held that theentire amount on repair and maintenance will have to be treated asrevenue expenditure.Thus, we find that there is no error in the order passedby the Tribunal. In the result, the appeal (ITAT/167/2018) failsand is dismissed. The substantial question of law is answeredagainst the revenue.The connected application for stay (GA/1/2018 (OldNo.GA/1426/2018) also stands dismissed. (T.S. SIVAGNANAM, J.) (HIRANMAY BHATTACHARYYA, J.) A/s./S.Das