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2013 (11) TMI 181 - AT - Income TaxAllowance of expenditure on the warranty/guarantee Addition of claim of loss of Rs. 2016607/- - Held that:- Claim of loss of Rs. RS.2016607/- was sustained by the assessee company in the normal course of business - It is an established business practice that in cases of setting up of plant and machinery/ manufacturing units, normally, performance guarantee and warranty agreements are executed between the supplier of plant and machinery and the buyer. Therefore, any defects/mistakes pointed out/detected during the currency of warranty/performance guarantee, it is the contractual obligation on the part of the supplier to remove those defects. In the present case, the loss of RS.20,16,607/- was sustained by the assessee company on account of rectifications carried out with respect to the palm oil mill established at Pothapalli (Andhra Pradesh) and supply of Hydraulic Bunch Hopper and skid steer system Decided against the Revenue. Classification of expenditure as Revenue expenditure or capital expenditure Expenditure of Rs. 10.12 lacs on account of payment of membership fee and registration fee to Bio Diesel Association Held that:- Expenditure in this case has been incurred in connection with enabling engineers and other technical staff to participate in conferences and discussions organized by the Bio Diesel Association of India. The discussion held in the conferences were academic in nature and highlight the constraints faced by the industry and the new technologies and trends emerging as a result of globalization of economy. The problem faced in day to day working of bio diesel industry also come up from discussions and suggestions made during such discussions help the technical staff in solving the day to day problems The expenditure is held as Revenue expenditure Decided against the Revenue.
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