1 ITA No. 2322/Del/2018

IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: ‘C’ NEW DELHI

BEFORE SH. ANIL CHATURVEDI, ACCOUNTANT MEMBER
AND

MS. SUCHITRA KAMBLE, JUDICIAL MEMBER

I.T.A. No. 2322/DEL/2018 (A.Y 2014-15)

(THROUGH VIDEO CONFERENCING)

Kisan Sahkari Chini Mills Ltd. Vs JCIT

Nanauta, Sharanpur, Uttar Range-3

Pradesh Saharanpur

AAAAK0211G (RESPONDENT)

(APPELLANT)

Appellant by Sh. Anil Kumar Jain, Adv
Respondent by Ms. Sunita Singh, CIT DR

Date of Hearing 12.10.2021

Date of Pronouncement 14.10.2021

ORDER

PER SUCHITRA KAMBLE, JM

This appeal is filed by the assessee against order 22/03/2018 passed by
CIT(A)-27, New Delhi for assessment year 2013-14.

2. The grounds of appeal are as under:-

“1. The Ld.CIT(A) has erred in confirming the disallowance of Rs.3090610/-
made by Assessing Officer on account of Repair and Maintenance of Plant
and Machinery on estimate basis.

3. Assessee filed its Return of Income declaring total loss of Rs.
60,01,13,940/-. The Assessee is a co-operative society and main business of the
assessee is manufacturing of sugar. During the year under consideration, the
Assessing Officer made an addition of Rs. 3,77,368/- under the head Selling &
2 ITA No. 2322/Del/2018

Dispatching Expenses and of Rs. 30,90,610/- under the head Repair &
Maintenance of Plant & Machinery. Thus, the Assessing Officer assessed total
loss of Rs. 58,86,88,937/- as income of the assessee.

4. Being aggrieved by the assessment order, the assessee filed appeal
before the CIT(A). The CIT(A) dismissed the appeal of the assessee.

5. The Ld. AR submitted that the District Magistrate of the area is a
Chairman of the society and any scrap can be sold with his approval and by
tenders. Since scrap is generated in small quantity hence the same is
accumulated and sold after two or three years by following the procedure laid
down and as per the approval of District Magistrate. The Ld. AR also relied
upon the order of the Tribunal for A.Y. 2012-13 in subsidiary of assessee’s
case. [Kisan Sahkari Chinni Mills Ltd. Nanauta vs. DCIT I.T.A.
No.4485/DEL/2016 (A.Y 2012-13) and The Kisan Cooperative Sugar vs. DCIT
ITA No. 4606/Del/2016 (A.Y. 2012-13) order dated 20.09.2021]

6. The Ld. DR relied upon the assessment order and the order of the CIT(A).

7. We have heard both the parties and perused all the relevant materials
available on record. It is pertinent to note that the Assessing Officer has
disallowed these expenses only on the basis of estimated value of scrap at 10%
without any proper finding and on proper basis. The addition is merely on a
presumption basis. Therefore, the same is not sustainable in eyes of law. The
CIT(A) also has observed that the District Magistrate’s approval/sanction is
necessary for making sale of scrap. Thus, the Assessing Officer as well as the
CIT(A) was not correct in making the addition on account of repair and
maintenance of plant and machinery. The issue is already decided in favour of
the assessee in A.Y. 2012-13 in subsidiary of assessee’s case. No distinguishing
facts were pointed out by the Ld. DR. Hence, the appeal of the assessee is
allowed.

3 ITA No. 2322/Del/2018

8. In result, the appeal of the assessee is allowed.
Order pronounced in the Open Court on this 14th Day of October, 2021

Sd/- Sd/-
(ANIL CHATURVEDI) (SUCHITRA KAMBLE)
ACCOUNTANT MEMBER
JUDICIAL MEMBER
Dated: 14/10/2021
R. Naheed * ASSISTANT REGISTRAR
ITAT NEW DELHI
Copy forwarded to:

1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT