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2012 (6) TMI 377 - ITAT, AHMEDABADRevenue or capital expenditure - repairs and maintenance of building and plant & machinery as capital expenditure - renewal, replacement or modification of an asset or part of an asset - held that:- Repairs were incurred to preserve and maintain an existing asset. The object of the expenditure was not bringing into existence an another new asset. By the incurring of the said expenditure, the assessee has not obtained a new advantage. It is also necessary to find out whether a particular repair was really needed and in the present case we have noticed that it was a decision of the assessee to take appropriate measure to repair the building for its maintenance as also for safety purposes. - Decided in favor of assessee. It was found that new machinery, new furniture, new sanitary fittings, new electrical wirings were installed. Besides that, an extensive repair in the structure of the building was carried out. Therefore, it was held by the Hon’ble Court that due to total renovation the expenditure in question was capital in nature. Facts of the said cited precedent can be distinguished from the facts of the assessee, that the assessee’s case was not a total renovation or the entire new machinery, new furniture, etc. were brought to the existence. - this ground of the Revenue is partly allowed. Delayed payment of employee’s contribution to PF - held that:- whether the provisions of sec.36 and the provisions of 43B are independent of each other, now a decision of Honble S.C of CIT vs Alom Extrusion Ltd. [2009 (11) TMI 27 (SC)] is available. But this decision is dated 25 Nov.2009 , however, the order of the A.O. is dated 27.11.2006, hence it was not available at the assessment stage. - Matter remanded back. Disallowance u/s.36(1)(iii) being interest cost incurred by the assessee on the advances given for non-business purposes – Held that:- Assessing Officer has stated that the assessee was unable to demonstrate that the non-interest bearing funds were utilized towards investment for earning dividend income. On the other hand, the argument of the assessee was that there were sufficient reserves and share capital out of which the said investment was made. However, the findings of the Assessing Officer have not been dealt with by Learned CIT(Appeals) in their right perspective and one of the reasons of the disallowance of the invocation of section 14A of the I.T.Act has also not been dealt with, therefore, ground remanded back to the stage of Learned CIT(Appeals) to decide De novo. ground of the Revenue may be treated as allowed for statistical purposes Notional loss - Exchange Fluctuation Loss – Held that:- increase in liability due to Exchange fluctuation is not notional or contingent liability, hence, allowable. Since the Assessing Officer has not dealt with the issue in the light of the law pronounced and proceeded without recording any specific finding about the nature of the liability, therefore, such an addition based upon a hypothetical reasoning or merely on surmises, thus do not survive in the eyes of law. ground of the Revenue is dismissed
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