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2020 (10) TMI 136 - AT - Income TaxDeduction for deferred revenue expenditure incurred in respect of maintenance and overall check-up (in compliance with DGCA guidelines) of helicopter EC145 taken on lease - disallowance of deduction as copy of lease agreement and invoices were not furnished by the appellant - As argued maintenance and overall check-up expenses under consideration were incurred in a preceding assessment year and suo motu amortized by the appellant over the lease period of the helicopter - HELD THAT:- In the year under consideration, the issue does not seem to have been examined by the Assessing Officer in the proper perspective i.e. with reference to the lease agreement. We also note that even the Ld. CIT (A) did not examine the relevant documents. Issue be restored to the file of the AO for duly considering the claim of the assessee after going through contents of the lease deed as well as the relevant bills and vouchers. It is so directed accordingly. While the Assessing Officer is re-examining the issue, he should also consider the factum of similar expenditure having been allowed in 143(3) proceedings in Assessment Years 2010-11 and 2011-12. Disallowance of regular repairs and maintenance of Aircraft after capitalizing the same and allowing depreciating thereon - As per AO this replacement was in the nature of major repairs which added to the life of the asset - CIT (A), while dismissing the assessee’s appeal, also held that these were repairs of a nature which enhanced the efficiency of the Aircraft and were not part of the regular maintenance expenses - HELD THAT:- We agree with the contention of AR that the quantum of expenditure cannot determine whether a particular expenditure is capital or revenue in nature. In our opinion, replacement of Primary Adaptive Display and Tail Rotor Blade are essential to keep the aircraft in a running usable condition and the replacements do not enhance the useful life of the aircraft. Thus, the impugned repairs would fall under ‘current repairs’ which were essential to keep the aircraft in a running condition. Therefore, we set aside the order of the Ld. CIT (A) on the issue and direct the Assessing Officer to delete the disallowance. Interest of Income Tax Refund - assessee’s contention that the assessee has not received any such interest - AR has submitted that the issue may be restored to the file of the Assessing Officer for passing appropriate order after due verification in this regard and the Ld. SR. DR also does not have any objection to the same - HELD THAT:- In view of the agreement of both the parties, this issue is also restored to the file of the Assessing officer for the purpose of being adjudicated afresh after due verification of the assessee’s claim .
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