Txa/75/2015 Of The Commissioner Of Income Tax, Panaji v. Salgaokar Mining Industries Pvt. Ltd

1 txa75-15 IN THE HIGH COURT OF BOMBAY AT GOA TAX APPEAL NO. 75 OF 2015 THE COMMISSIONER OF INCOME TAX, PANAJI. ..…...... APPELLANT. V/s. SALGAONKAR MININGINDUSTRIES PVT. LTD. …........ RESPONDENT. Ms. Asha Desai, Advocate for the appellant. CORAM :- F.M. REIS & C.V. BHADANG, JJ. Date : - 16 November 2015. ORAL ORDER : (PER F.M. REIS, J.) Heard Ms. Asha Desai, learned Counsel appearing for theappellant/Revenue. 2. The above appeal challenges the orders passed by theAuthorities below, whereby the additions by the Income Tax Officertowards repairs to the jetty to the tune of Rs.66,22,781/-, incurred for port development expenses and a sum of Rs.34,87,774/- andRs.38,02140/- on account of the construction of the compound wallwere disallowed. 2 txa75-15 3. Ms. Asha Desai, learned Counsel appearing for the appellantpoints out that the learned Income Tax Appellant Tribunal, whilstpassing the impugned order dated 26th September, 2014 for theAssessment Year 2007-08 dismissed the appeal preferred by theRevenue. The learned Counsel points out that the only challenge in thepresent appeal is to the dismissal of the appeal filed by the Revenue inrespect of the additions referred to herein above and the appellantshave not challenged the decision of the learned Tribunal, partlyallowing the appeal of the respondents for the Assessment Year 2006-07. The learned Counsel further points out that according to theappellant, the expenses incurred on account of port developmentexpenses are of capital nature and consequently, the learned Tribunalwas not justified to come to the conclusion that it was a revenueexpenditure. The learned Counsel further points out that as far as theexpenses incurred towards the construction of the compound wall areconcerned, such expenses are of capital nature and the learned Tribunalhas erroneously come to the conclusion that the expenditure was onaccount of revenue expenditure. The learned Counsel has taken usthrough the findings of the CIT(A) to point out that the evidence, onrecord, has not been correctly scrutinized whilst disposing of the 3 txa75-15 appeal preferred by the Revenue. The learned Counsel further pointsout that there was no opportunity given to the appellant to verify theactual expenditure incurred by the respondent on account of suchexpenses towards the development of the jetty, as well as thecompound wall. The learned Counsel, as such, submits that thesubstantial questions of law, on such account, deserve to be examinedby this Court. 4. We have considered the submissions of the learned Counselappearing for the appellant/Revenue and with her assistance, we havealso gone through the record. The learned Tribunal, in its order, hasobserved at para 7.2 thus : “7.2 We have heard the rival contention of both theparties. Looking to the facts and circumstances of thecase, we find that the Assessing Officer has treated thefollowing expenditure as capital expenditure which isBelekeri Port Development expenses Rs. 66,22,781,Repairs to jetty at Belekeri Rs.34,87,774, Repairs toZarbag Property Rs.38,02,140. The CIT (A) has verifiedthe expenses and after verification of expenses theCIT(A) was of the view that this expenses are a nature ofrevenue nature. The work of repairs to Jetty was given toPunage Engineers. The expenses on repairs to Jetty atBelekeri include : 4 txa75-15 5 txa75-15 “7.2 We have heard the rival contention of both theparties. Looking to the facts and circumstances of thecase, we find that the Assessing Officer has treated thefollowing expenditure as capital expenditure which isBelekeri Port Development expenses Rs. 66,22,781,Repairs to jetty at Belekeri Rs.34,87,774, Repairs toZarbag Property Rs.38,02,140. The CIT (A) has verifiedthe expenses and after verification of expenses theCIT(A) was of the view that this expenses are a nature ofrevenue nature. The work of repairs to Jetty was given toPunage Engineers. The expenses on repairs to Jetty atBelekeri include : 4 txa75-15 5 txa75-15 We find that CIT(A) has also held that the sum of theexpenses towards the repairs to compound wall covering thePort/Jetty at Belekeri and the maintenance of this compoundwall is compulsory as per the regulation for jetty byGovernment of Karnataka, Department of Port and InlandWater Transport. This is required for safety as well aspollution control. This was gets damaged frequently becauseof vibration caused by heavy transport, therefore, CIT(A) hastreated this amount as revenue in nature. In respect of Zarbagproperty the assessee is having plot for stock piling nearUsgao, this is towards the repairs to compound wall because ofloading/unloading & heavy machinery operation, thecompound wall of this plot get damaged frequently. It needsto be repaired every now & then. Therefore, this expenses arein revenue nature. We find that in the case of CIT(A) BelgachiTea Co. Ltd., 99 ITR 99 (Cal), wherein it held that expenditurewas incurred on repair to fence of tea garden and the tribunalfound that this expenditure has direct nexus with the business,and this expenditure also creating an advantage of enduringnature incidentally and for that it cannot be treated as revenuenature, therefore, considering of this decision the CIT(A) hastreated this expenditure as revenue expenditure and ourinterference is not required.” 6 txa75-15 5. On going through the findings of the learned Tribunal, wefind that the learned Tribunal has minutely examined the material onrecord to come to the conclusion that such expenditures wererevenue expenditure. Such concurrent findings of fact arrived at bythe learned Tribunal, cannot be examined by this Court in an appealunder Section 260A of the Income Tax Act, unless there is perversityin such findings. Ms. Asha Desai, learned Counsel appearing for theappellant, was not in a position to point out that any piece of evidencehas been misread by the learned Tribunal or that any material producedby the appellant has not been examined by the authorities below,whilst coming to such a finding of fact. As we find no perversity insuch findings of fact, no substantial question of law arises whichrequires consideration by this Court in the present appeal. 6. With regard to the contention of the learned Counselappearing for the appellant that no opportunity was given to theappellant to verify such expenditure, we find that such aspect was notraised before the learned Tribunal and, as such, the question ofexamining such a contention in the present appeal would not arise atall. Apart from that, the impugned order records that the CIT(A) hasverified the expenses whilst coming to the conclusion that such 7 txa75-15 expenses were revenue expenditure. 7. In view of the above, no substantial question of law arises forconsideration in the present appeal and consequently, the appeal stands rejected accordingly. C.V. BHADANG, J. F.M. REIS, J. ssm.