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2022 (4) TMI 320 - AT - Income TaxDisallowance of maintenance expenditure to plant & machinery - Allowable revenue expenses or capital expenditure - HELD THAT:- On perusal of the material placed by the assessee before us, it indicates these are parts which require occasional replacement for smooth and efficient operation of main machineries. By incurring expenditure for purchase of such items, no new separate and distinct asset came into existence, and that there is no replacement of existing machinery as a whole so to consider the same to capital expenditure. The revenue was simply carried away by the size amount rather than nature and import of the items purchased. There is no basis with the revenue authorities, which indicates that the impugned expenditure was in the nature of capital. Therefore, keeping in view overall nature of items purchased by the assessee, we are of the considered view that whatever expenditure incurred for purchasing of these items were the business expenditure, and wholly and exclusively incurred for running day-to-day operational necessity in order to keep the entire plant & machinery functional and efficient. We allow claim of the assessee to treat the impugned expenditure as revenue expenditure. Disallowance of foreign travelling expenses incurred by the Directors of the company to China, Germany and other countries -HELD THAT:- The factum visit to China and Germany, and the nature of the business engaged by the assessee have not been disputed by the Revenue. Assessee has submitted a list of parties to whom the business has business relation in China and Germany, Greece, Span, Belgium Italy, Japan etc. were furnished. Details of tickets, visa, bills etc. were also furnished to support its case about the genuineness and necessity of undertaking such foreign trips. were also furnished. Revenue authorities have not brought anything on record to show that either details provided by the assessee were bogus or the claim of the assessee that it has imported material from other countries for its production line was found to be incorrect. Therefore, having regard to entire factual scenario and the nature of business assessee’s business i.e. being pharmaceutical company, we are of the view that impugned foreign travel expenses incurred by the assessee are genuine requirement and for business purpose, and therefore, the impugned addition is directed to be deleted. Appeal of the assessee is allowed
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