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2013 (7) TMI 34 - AT - Income TaxExpenditure incurred on repairs & maintenance - as per assessee cost of the civil work for the de- botttle-necking of De-hydro generation section of existing Capro Expansion Plant (CEP is revenue in nature - revenue v/s capital - Held that:- CIT(A) has decided this issue on this basis that it is not clear as to how excavation/earth removal was necessary for simply switching from one catalyst to another. He has also given a finding that in case, different equipment was required for utilizing the new catalyst, that is induction of new plant/machine for the purpose and in that situation, the expenditure will be capital expenditure. In spite of this clear finding of CIT(A), assessee could not establish that by way of excavation/earth removal, no new equipment was installed. Hence, no reason to interfere in the order of CIT(A)in confirming disallowance. Against assessee. Expenditure on the release of water and discharge of effluent and pollution control - revenue v/s capital - Held that:- To be considered as revenue expenditure, with the observation that their expenditure did not result in the creation of any specific asset - this is now covered in favour of the assessee by Tribunal's decision rendered in assessee's own case for A.Y. 2001-02 and 2005-06. Against revenue. Expenditure on acquiring fire fighting equipments and on safety measures - revenue v/s capital - Held that:- Tribunal in A.Y. 2000-01 also decided the issue on this basis that similar issue has arisen in the earlier assessment year and it was decided in favor of assessee and no appeal has been filed by Revenue. There is no discussion about the facts for A.Y. 2000-01 or A.Y. 2001-02. It is not clear as to whether in those years, the issue involved was regarding maintenance of fire fighting equipments or for replacing some parts of those equipments or whether full new equipments were acquired in those two years. Thus restore the matter back for a fresh decision. Disallowance u/s 14A towards interest and other expenses - Held that:- In two years 2004-05 and 2005-06, the Tribunal has confirmed the disallowance of 5 lacs in each year u/s 14A in respect of other expenses. Since no difference in facts could be pointed out by D.R. of the revenue, in the present year also, thus confirm the disallowance of Rs. 5 lacs u/s 14A in respect of other expenses and decline to interfere in the order of CIT(A) on this issue regarding deletion of balance expenditure. This ground of revenue is partly allowed. Disallowance on account of replacement - CIT(A) deleted the addition - Held that:- Clear finding is given by CIT (A) that these expenses pertained to water proofing, overhauling and renovation expenses. This finding of CIT (A) could not be controverted by D.R. of the revenue and hence, no infirmity in the order of CIT (A). Claim of assessee u/s. 80IA(4) by taking the price of electricity supplied by GEB - Held that:- If this captive power generation plant is not there, the assessee has to purchase power from GEB at the rate at which power is supplied by GEB to its consumer. Hence, this is also true that on account of this captive power generation plant of the assessee, to the extent power is generated by it, there is a saving of the assessee company on account of power expenses to the extent of power produced in units @ power supply rate of GEB. Hence, the income of this power generation plant to compute deduction allowable to the assessee u/s 80IA(4) has rightly been computed by taking the price of electricity supplied by GEB. Estimated gratuity provision made on the basis of actuarial valuation - Adjustment of book profit u/s 115JB - Held that:- In order to be eligible for reduction from book profit, the amount in question should be in respect in reserve/provision excluding a reserve created before the 1st April, 1997 otherwise than by way of debiting to the P & L account. No finding was given by the CIT (A) on this aspect. Hence, his order on this aspect cannot be sustained. This ground of the Revenue stands allowed for statistical purpose. Calculations of deduction u/s 80 IA - at Rs. 4.55 per unit as against correct purchase rate of power of Rs. 5.42 per unit on the basis of the cost of power purchased from GEB - Held that:- there is a column regarding payment of charges and after adding the same, the total rate has been worked out for each month separately which ranges between the 4.50 in March, 2006 to 4.736 in the month of April and June, 2005. Electricity duty is separately shown in next column @ 15 % but consequential amount has not been worked out in this chart. We, therefore, feel that on this issue also, a fresh decision is required because Ld. CIT (A) has not given any basis as to how he has determined the rate of power sold by GEB to the assessee at Rs. 4.55 per unit. In favour of assessee for statistical purposes.
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