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2005 (9) TMI 276 - ITAT MADRAS-DForm Of Appeal And Limitations - "sufficient cause" as enumerated in section 249(3) - Condonation of delay of 1,447 and 1,454 days for the assessment years 1995-96 and 1996-97 respectively on the advice by its Senior Manager (Finance & Accounts), who happened to be a C.A. - Advised by CA, that the disallowance of revenue expenditure on replacement is only going to be beneficial to the assessee-company since it is going to increase its asset base and the depreciation will be available for future years - HELD THAT:- The delay is on account of advice by the assessee's Senior Manager (Finance & Accounts) who happened to be a C.A. and he advised that at the time of finalisation of assessment proceedings, the assessee-company had gone a massive expansion programme aggregating to Rs. 55 crores and there was availability of large depreciation and interest expenses as required for set off against future profits. Accordingly, it was advised by him that the disallowance of revenue expenditure on replacement is only going to be beneficial to the assessee-company since it is going to increase its asset base and the depreciation will be available for future years. On this advice, the assessee-company has taken a conscious and deliberate decision, not to contest the assessment orders as the company had gone into a massive expansion programme aggregating to Rs. 55 crores and it wanted to claim large depreciation and interest expenses in future years when the profits will arrive. It is clear that this advice was given by the C.A. and accepted by the company, even though the decision is available in favour of the assessee on replacement of machinery being held as revenue expenditure by the Hon'ble Apex Court in the case of CIT v. Mahalakshmi Textile Mills Ltd.[1967 (5) TMI 4 - SUPREME COURT]. Subsequently; the Hon'ble High Courts and the Tribunal Benches are consistently taking a view from the very beginning that the expenditure incurred on replacement of machinery is a revenue expenditure. The word "sufficient cause" as enumerated in section 249(3) in the context of condonation of delay should be a liberal construction so as to give substantial justice but only when no negligence or inaction or want of bona fide is imputable to the party concerned. In the present case in hand, the assessee was aware about the facts of the case and it was within its knowledge that the issue in respect of expenditure incurred on replacement of machinery was treated as capital expenditure by the Assessing Officer and the same was not contested as it wants to increase its asset base and want to claim depreciation and interest to be set off against the future profits. Thus, we are of the view that the CIT (Appeals) is justified in refusing to condone the delay in filing the appeals. Accordingly, we uphold the order of the CIT (Appeals). In the result, the appeals of the assessee are dismissed.
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