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2014 (10) TMI 225 - HC - Income TaxExpenses on establishing Green Belt and depreciation - The AO refused to treat it as capital investment, much less as part of plant and machinery and disallowed depreciation – Tribunal allowed the same as revenue expenditure - Held that:- The Tribunal was of the view that the expenditure incurred for the arrangement of Green Belt answers the description of revenue expenditure and since it was incurred before the commencement of production and business, it can be capitalized - The Tribunal has undertaken extensive discussion regarding the nature of the expenditure that is incurred for arranging the Green Belt - once it is not in dispute that the expenditure for arranging Green Belt was incurred before the commencement of production and in the process of creating asset, it deserves to be capitalized. The Tribunal, in a way, accepted the contention of the assessee that the Green Belt was treated as plant and machinery in the insurance policies and the same analogy can be adopted in the context of taxation also - when the field of income tax is governed by its own norms, in the form of rules and notifications, if not the provisions of the Act itself, for classification of items of expenditure and the like, there was absolutely no basis to adopt the one, which was indicated in an insurance policy, which has absolutely nothing to do with taxation – thus, the order of the Tribunal is set aside which directed that the expenditure incurred for arranging the Green Belt by the assessee be treated under the heading of plant and machinery - Decided partly in favour of revenue.
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