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2022 (3) TMI 1333 - AT - Income TaxDepreciation claimed by the assessee at a higher rate - oil rigs used being plant of specific category are owned by the assessee and used in drilling operations for the purpose of exploration and extraction of mineral oil in the field of mineral oil concerns - AO substituted the accelerated depreciation rate from 60% as claimed to a normal depreciation of 15% as eligible to assessee - HELD THAT:- As relying on decision of HLS India [2011 (5) TMI 322 - DELHI HIGH COURT] and Co-ordinate Bench of ITAT [2011 (5) TMI 322 - DELHI HIGH COURT]has agreed with the plea of the assessee for entitlement of accelerated rate of depreciation @ 60% on oil rigs which has been used for drilling operations in the oil field of mineral oil concernsCo-ordinate Bench of ITAT in ITA No. 5710/Del/2014 order dated 3rd April, 2019 has agreed with the plea of the assessee for entitlement of accelerated rate of depreciation @ 60% on oil rigs which has been used for drilling operations in the oil field of mineral oil concerns. Nature of expenditure - Disallowance of repair and maintenance charges - assessee claimed the aforesaid expenditure towards repair and maintenance as revenue expenditure - HELD THAT:- We take note of the plea of the assessee that there is no reimbursement of expenses and such expenses are integral part of the execution of the contract as demonstrated. Hence, the expenditure incurred requires to be set off against the revenue income arising from contract as per rudimentary principles of accountancy. The assessee has taken a plea that no new asset is created or no benefit of enduring nature has been derived. We do not see any rebuttal on this score from the revenue. The Assessing Officer has merely proceeded on a hypothesis of such expenditure being capital in nature without showing any justifiable grounds for doing so. The Assessing Officer has capitalized such expenditure without showing any reasonable grounds. On the contrary, we find merit in the conclusion drawn by the CIT(A) holding the same to be revenue expenditure on the face of such tell-tale facts. In the absence of any merits in the plea of the revenue, we decline to interfere with the order of the CIT(A). - Decided in favour of assessee.
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