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2008 (8) TMI 346 - KARNATAKA HIGH COURTHiring of equipments - Capital Expenditure versus Revenue Expenditure – The appellant-assessee has taken certain equipments on lease for which a sum of Rs. 10,00,000 is paid as deposit and it is also paying rentals payable to the owner of the equipments – held that - It is no doubt true that the assessee has paid the deposit of Rs. 10,00,000 which has to be adjusted towards the rentals. When such being the case, we are of the opinion that the Commissioner of Income-tax (Appeals) was justified in reversing the findings of the Assessing Officer, but the Tribunal without considering the legal aspect and without any basis has wrongly come to the conclusion that the assessee has acquired the equipments. On facts, we notice that the assessee has not acquired any assets and only the rentals were paid by the assessee which has to be treated only as an expenditure and not to acquire the assets. In the result, we have to answer the question of law in favour of the assessee
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