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2017 (2) TMI 985 - AT - Income TaxExpenditure on crockery cutlery utensils and other consumables - revenue or capital expenditure - Held that:- These are necessary expenditure required to be incurred for the purpose of running of the restaurant and resort. The Ld. CIT appeal has held that out of a sum of ₹ 463916/- , ₹ 331404/- is considered to be capital in nature. The nature of the such expenditure are children game items. In our view such expenditure cannot be held to be capital in nature. Further with respect to the kitchen equipments such as cutlery of staff cafeteria and kitchen utensils cannot also be held to be capital expenditure because of the reason that the restaurant and the resort has been restarted during the year. It is not the case of the revenue that these are the new purchases for starting of the new restaurants and resorts. Furthermore a total claim of ₹ 1794501/- on account of expenses on testing kits, tools, tool bags etc which are been purchased for the resort area as it has become operational during the year under consideration and therefore the Ld. CIT appeal has held them to be capital expenditure and not revenue expenditure. We do not subscribe to the view of the Ld. CIT A as the facility tools and materials for resorts are small items which are required for the day to day use in resort. Such as housekeeping items of dustbins holders garbage dustbins etc are also held to be a capital expenditure. As the nature of expenditure incurred by the assessee no capital asset has come into existence but are the day today expenditure or minor expenditure for running business which is already in existence, such expenditure are incurred. According to us these expenditure cannot be held to be capital in nature and therefore we reverse the decision of Ld. CIT appeal in holding that the sum of ₹ 3192313/- is capital expenditure. In the result ground of the appeal of the assessee is allowed.
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