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2014 (2) TMI 234 - AT - Income TaxNature of expenses – Capital OR Revenue - Expenses incurred on preliminary survey – Survey for aqua and agro project – Held that:- The Assessee has proposed to set up Aqua Agro Project which was admittedly an expansion of the existing project - The proposed new project is stated to have inextricable linkage with the existing business of the assessee - It is also a fact that no new asset has come to be created by the incurring of expenses - the Revenue could not bring any material on record to controvert the submission of the assessee - Relying upon CIT Vs. Priya Village Roadshows Limited 2009 (8) TMI 765 - Delhi High Court] - the expenditure cannot be considered to be of capital nature and therefore, the claim of the Assessee needs to be upheld – Decided in favour of Assessee. Depreciation u/s 32 of the Act – Greenhouse classified as building instead of plant – Held that:- The "functional test" have to be applied to determine as to whether the building is a plant or is a building simpliciter – Relying upon CIT vs. Victory Aqua Farms Ltd. 2004 (10) TMI 84 - KERALA High Court] – The "green house" is an essential part for a company engaged in the business of Tissue Culture - It cannot be considered as a simple "building" but has to be considered as a plant - the Assessee was right in considering the "green house" as part of "plant and machinery" and claiming depreciation of 25% - Decided partly in favour of Assessee.
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