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2022 (9) TMI 819 - AT - Income TaxNature of expenditure - expenditure on repair works - revenue or capital expenditure - CIT(A) directing the AO to delete the addition treating the same as revenue expenditure instead of capital expenditure - HELD THAT:- There is no dispute regarding quantum of expenditure incurred by the assessee, it is also not in dispute that the assessee has incurred repairs and there is no enhancement of capacity. No new asset came into existence as such the entire expenditure is allowable as revenue in nature. CIT(A) has categorically mentioned in his order that the expenditure incurred was not capable of increasing the capacity i.e. 14870 tonnes of ferro manganese. There is no contradicting material before AO to come to conclusion that the repairs enhances the capacity - the expenditure is meant for preserving and maintaining the existing asset, but not bringing or creating a new asset or advantage. The expenditure being huge is not the consideration to decide whether it is revenue or capital expenditure. The expenditure can be one time affair or recurring affair. Determination of capital or revenue expenditure is totally based on the circumstances of each case. AO ‘s observations are not supported by material, therefore, on overall facts and circumstances, he opined that the expenditure is revenue in nature. CIT(A) has rightly considered the case of the assessee, therefore, we do not find any infirmity in the order passed by the Ld.CIT(A) and hence dismiss the grounds raised by the revenue.
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