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2009 (10) TMI 505 - HC - Income TaxCapital or Revenue Expenditure Agreement with NTPC for power supply - The assessee also put up its power plant at that place for generation of electricity for its aluminium plant. - Since the expenditure for creating these systems were huge assessee decided to share the facilities available with NTPC. held that:- expenditure incurred are revenue in nature. Deferment of revenue expenditure period of five years. - held that:- no doubt till 1991-92, the part of the expenditure was allowed every year. It was loosely called as depreciation. What can be said is that the revenue expenditure was allowed every year at the rates on which depreciation is allowed. Since this was wrong practice adopted, the C&AG rightly advised the assessee to change the accounting method to bring it in tune with ICAI guidelines. What is done now from the Assessment Year in question is that it is the. correct step as it should have been taken in accordance with law and therefore, this could have been deprecated and claimed disallowed totally as done by the AO. Decided in favor of assesse. Admission of additional grounds by the tribunal u/s 254 held that:- both the conditions for raising this additional ground stood satisfied, viz., ground related to the tax proceedings of the assessee for the Assessment Year under consideration and the necessary facts were also available on record. Decided in favor of assesse. Depreciation on non-operating plant and machinery held that:- the PSL equipment was purchased and put to use by the assessee in previous year relevant to the Assessment Year 1990-91 and the same had entered into the block asset in that year. It thus lost individual identity for the allowance of depredation in that year. Since It is not in dispute for the year in question and block of assets was used, the assessee was rightly given the benefit of deprecation in the years in question. The question stands answered against the Revenue.
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