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2014 (6) TMI 773 - AT - Income TaxDeletion of disallowance of value of surgical instruments Held that:- CIT(A) rightly held that the nature of items and very short life of the items, if does not make any difference if the same is claimed as expense in the year of issue itself - The method followed during the year is accepted by the AO in all subsequent years in scrutiny assessments which means method followed by the appellant is bona fide and does not require any change on the part of AO - assessee had changed the method of accounting of surgical instruments but at the same time it is also a fact that the changed method has been followed by Assessee in all subsequent years and has also been accepted by Revenue in all scrutiny assessments - Revenue has not brought any material to contradict the findings of CIT(A) thus, there is no reason to interfere with the order of CIT(A) Decided against Revenue. Deletion of higher loss - Accounting of consumption of surgical instruments Held that:- The accounting treatment followed for accounting the consumption of surgical instruments in AY 04-05 has been followed by the Assessee in all subsequent years and has also been accepted by the Revenue in all the scrutiny assessments - the method of accounting followed by the Assessee in AY 04-05 has been followed consistently and has also been accepted by the Department and no discrepancy being pointed out in the accounting system followed in AY 04-05 and subsequent years which has also been upheld in AY 04-05 hereinabove, we are of the view that the method followed by the Assessee in A.Y. 04-05 be followed for the purpose of valuation of surgical instruments in AY 03-04 also thus, the matter is remitted back to the AO to work out the consumption of surgical instruments on the basis of the accounting treatment followed in AY 04-05 and subsequent years and thereafter decide the issue Decided in favour of Revenue. Restriction of disallowance on account of repairs to building Held that:- Most of the expenses which the Assessee has claimed as revenue expenses were small and were incurred of preserving and maintaining the building - out of the total expenses the aggregate of small expenses were to the tune of Rs. 4,42,421 - CIT(A) noted that Assessee transferred the expenses from building work in progress account and the expenses were of capital in nature - the expenses as not of revenue nature and he thus disallowed the claim with respect to capital expenses incurred and allowed the balance amount as being eligible for deduction - Revenue has not brought any material on record to controvert the findings of CIT(A) thus, there is no reason to interfere with the order of CIT(A) Decided against Revenue. Depreciation on account of repairing of Cath Lab Held that:- CIT(A) rightly held that the parts were not purchased for new or independent use - these were replaced with existing parts in the system to maintain and preserve its use - Since the expenses have not created any new asset and also did not have any new advantages, these will qualify as current repairs - CIT(A) while granting relief has given a finding that Assessee had existing Cath Lab which was running since earlier years and that the expenses incurred were towards replacement of worn out parts and repairing the system and was not for purchase of new or independent use - the Revenue has not brought any material on record to controvert the findings of CIT(A) thus, there is no reason to interfere with the order of CIT(A) Decided against Revenue.
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