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Issues:
1. Disposal of appeals against the order of CIT(A) for the assessment year 1996-97. 2. Disagreement over the treatment of plot premium paid by the assessee as revenue or capital expenditure. Analysis: 1. The Department filed appeals against the CIT(A) order for the assessment year 1996-97, with a common issue regarding the treatment of plot premium. The delay in filing one appeal was condoned due to procedural reasons, and both appeals were admitted for hearing together. The Revenue contested the treatment of plot premium as revenue expenditure instead of capital expenditure in both cases. 2. The assessee, engaged in ship breaking, paid a 25% premium for a plot allotted by Gujarat Maritime Board (GMB) for 10 years. The AO allowed only 1/10th of the premium as a deduction, leading to a dispute. The CIT(A) had previously deleted a similar disallowance for the assessee for the previous year. 3. The Department argued that the enduring nature of the advantage obtained by the assessee from the plot justified amortizing the premium over 10 years. The assessee, on the other hand, contended that the premium was not for acquiring a capital asset but for facilitating ship breaking operations. Various provisions of the GMB Act were cited to support this argument, along with references to Supreme Court decisions. 4. The Tribunal examined the statutory provisions governing the plot's use under the GMB Act and the nature of the permission granted to the assessee. It noted that the permission was for a limited period, did not confer ownership or transferable rights, and restricted activities to ship breaking. Applying the principle that revenue expenditure is integral to the profit-earning process and not for acquiring a permanent asset, the Tribunal upheld the CIT(A)'s decision to allow the deduction of the premium as revenue expenditure. 5. The Tribunal rejected the Department's contention that the premium should be treated as a capital expenditure due to the enduring nature of the benefit, emphasizing the temporary nature of the permission and the absence of any capital asset acquisition. Considering the accrual of liability as per statutory terms, the Tribunal upheld the CIT(A)'s decision to delete the disallowance of the premium amount in both cases, dismissing the Department's appeals.
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