Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (2) TMI 1329 - ITAT CHENNAIReopening of assessment u/s 147 - Nature of expenditure - Disallowance of expenditure on construction of compound wall in place of replacement of Barbed wire fencing as capital expenditure - HELD THAT:- As disputed disallowance on the issue of allowability of expenditure of replacement of compound wall was not discussed as referred at page no.3 of assessment order. Since there is no opinion was formed at the time of regular assessment u/s.143(3) of the Act completed on 30.11.2010 and the assessee has filed objections to reopening of the Act and ld. Assessing Officer considered the objection of the assessee on the reopening of assessment and disposed off by separate order dated 22.01.2014. Considering all we dismiss the appeal on the ground of re-assessment. Nature of expenditure - On Comparison with the provisions of Sec.37(1) and the nature of expenditure and the treatment of expenditure in the books of Accounts also factual circumstances and Apex Court decisions relied by the assessee the expenditure takes the characteristic of Revenue in nature though ld. Assessing Officer in his order has mentioned that this decision is not applicable for the issue in dispute as it pertaining to assessment year 1995-96 and 1997-98 and due to amendment in Sec.30 of the Act. Considering the factual circumstances the claim of the assessee fall under residual sec. of 37(1) were the expenditure has been incurred wholly and exclusively for the purpose of business and expenditure being a replacement cost to the existing asset which satisfy the functional test of revenue expenditure and also follow the jurisdictional High Court decision CIT vs. Southern Roadways Ltd [2007 (6) TMI 193 - MADRAS HIGH COURT] we set aside the order of the Commissioner of Income Tax (Appeals) on this ground and Direct the Assessing Officer to allow the deduction of replacement of barbed wire fencing with compound wall as revenue expenditure - Decided in favour of assessee.
|