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2012 (10) TMI 773 - AT - Income TaxTender Fees Expenses - Revenue v/s Capital - Held that:- The assessee has been submitting tender in its day-today business which are basically works contract on turn key basis. The assessee has procured orders for sale of its items manufactured. It has to fulfill the tenders floated by State Governments or Electricity Boards. It is not necessary that it will get the order. It does not create any new asset. It was incurred in connection with the integral part of profit earning process and not for acquisition of any asset, thus Revenue authority has failed to look into the true nature of the expenses - in favour of assessee. Bank Guarantee & Loan Processing Charges - Held that:- Considering assessee's submission it can be concluded that loan was taken for working capital on perusal of the copies of invoices issued by various vendors as it reveals that the goods purchased by the assessee are insulator, panels etc. FAA fail to look into the fact that assessee is in the business of manufacture distributor transformers, HT cable box on job contract basis. It also constructs power houses and lays electrical lines. In connection with these operation, assessee has to purchase all these items. These items were consumed in the ultimate final product, which is the trading stock of the assessee - in favour of assessee.
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