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2014 (3) TMI 585 - HC - Income TaxNature of Expenses - Whether the Tribunal was justified in holding that the sum was capital in nature and was not revenue expenditure that could properly be deducted – Held that:- The ITAT has not adequately dealt with the reasoning of the CIT(A) who had carried out the site inspection after which he held that the entire expenses had to be treated as revenue expenditure - the ITAT does not clearly point to the creation of any new asset - Rather, it is only the sitting capacity of the existing bar that was increased with the renovation carried out – Relying upon Empire Jute Company Limited Versus Commissioner of Income-Tax [1980 (5) TMI 1 - SUPREME Court] - an action that merely facilitates the assessee’s business (making it more profitable), whilst leaving the fixed capital untouched, is revenue in nature – Decided in favour of Assessee. 100% claim of depreciation on temporary constructions – Held that:- The materials on record show that the construction was not authorised and appears to have been put up only for the convenience of workers who were engaged by the assessee - The record also indicates that the constructions were subsequently demolished – although after the Commissioner’s order – thus, the depreciation claimed to the tune of 100% cannot be termed so unreasonable as to warrant reversal of the CIT(A)’s view – Decided in favour of Assessee.
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