M.Y.EQBAL, J. - (1.) THIS appeal under Sec. 260A of the Income Tax Act, 1961 is directed against the order dated 15.12.2006 passed by Income Tax Appellate Tribunal, Circuit Bench, Ranchi in I.T.A. No. 297/PAT/20Q5 whereby and where under the Tribunal set aside the order passed in appeal by the Commissioner of Income Tax and affirmed the order passed by the Assessing Authority.
(2.) WE have heard Mr. K.K. Jhunjhunwala, learned Counsel appearing for the Appellant/Revenue and Dr. Devi Pal, learned senior counsel appearing for the Assessee and with their consent this appeal is disposed of at the admission stage. The facts of the case lie in a narrow compass: The respondent/Assessee is an export oriented company. The Assessed filed its return for the assessment year 2001 -02. In the regular assessment made under Sec. 143(3) the assessee claimed inter alia a sum of Rs. 2,11,22,141.00 for the revenue expenditure incurred by way of repairs and maintenance of plant and machinery. This said claim was allowed by the Assessing Officer. However, the Commissioner of Income Tax issued show cause notice under Sec. 263 of the Income Tax Act, 1961 (in short 'the Act') for the purpose of revising the order of assessment which was made by the Assessing Officer under Section 143(3) of the Act. The Commissioner of Income Tax proceeded on the basis that the Assessing Officer has allowed expenditure of Rs. 2,11,22,141.00 on account of repairs and maintenance of plant and machinery which was so valued at Rs. 10,60,56,321.00 . According to Commissioner of Income Tax, since expenditure incurred by the assessee in maintenance and repairs of plant and machinery constituted substantial addition to the value of plant and machinery, the order of Assessing Officer in allowing total expenditure as revenue expenditure is erroneous and prejudicial to the interests of Revenue. The Commissioner of Income Tax, therefore. set aside the order of Assessing Officer.
(3.) AGGRIEVED by the said cutter passed by the Commissioner of Income Tax, the respondent - assessee preferred appeal under Sec. 260A of the Act before the Income Tax Appellate Tribunal. The Tribunal after hearing the parties, set aside the order passed by the Commissioner of Income Tax holding that the same is perverse and erroneous in law. Hence, this appeal by the appellant - Revenue.;