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2012 (12) TMI 528 - ITAT CUTTACKCapital versus revenue expenditure - Expenditure on prospecting, etc., for certain minerals – Assessee claim over burden removal charges, Drilling, Blasting and Explosive, Shifting and Leveling charges, query development charges and mining survey – AO argued that these expenses are incurred for the purpose of exploring of iron ore and thus are covered by Sec. 35E – Held that:- An expenditure is made not for the purpose of bringing into existence any such asset or advantage but for running the business or working it with a view to produce profits it is a revenue expenditure. Hence the expenditure incurred in removal of overburden was of revenue nature and hence the assessee was entitled to claim deduction. In favour of assessee Addition on account of plot bidding charges – Revenue or capital expenditure – Assessee claim amount incurred for acquiring a plot inside the Port is revenue in nature - Ownership of the Plot is with Paradeep Port and the assessee is nothing but a tenant – Held that:- The assessee has incurred this expenditure for carrying out stowing operation for export business and such expenditure is not incurred for the purpose of bringing into existence any such assets or advantage but for running the business with a view to earn profits. The assessee was to bid when the Port Trust authority allowed it stock with condition of export of 1 lakh tones per annum. No capital assets can be transferred with condition and stipulation which rather indicate that the assessee must export lest be deprived of the plot in the Port Trust. The expenditure was necessarily for the smooth business of the assessee and not for creation of an asset or enduring benefit. In favour of assessee Disallowance u/s 40A(3) – Cash payment exceeding Rs. 20000 – Held that:- As the details as inscribed by the AO which are not individual vouchers for incurring a particular expenditure but are a group head. Delete the addition. In favour of assessee
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