TMI Blog2002 (1) TMI 285X X X X Extracts X X X X X X X X Extracts X X X X ..... has later filed a separate appeal in the case of Kapoorchand Bansal. Hence, the said appeal is time-barred by 302 days. A petition dt. 12th Oct., 2001, has been filed for condoning the delay and explaining the reasons as mentioned above for the delay. Since it is a procedural lapse on the part of the Department, the delay is condoned and the appeals are admitted for hearing. In both the appeals the Revenue is aggrieved against holding the plot premium paid by the assessee as revenue expenditure instead of capital expenditure. 2. The assessee are ship breakers. The ships are broken on a plot allotted by Gujarat Maritime Board (GMB). The allotment of plot is for a period of 10 years for which the assessee is required to pay 25 per cent pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was placed on the order of the AO. 5. The learned counsel for the assessee also referred to the various provisions of GMB Act. His submission on the provisions of GMB Act can be summarised as follows: (a) By virtue of obtaining the permission to utilise the plot the assessee did not acquire any right, title or interest in the plot. (b) The possession of the plot was deemed to be remaining with GMB. (c) Though the allotment was for 10 years, the premium charges to be paid were spread over a period of 18 months. But, under any circumstances, the premium charges paid were not refundable. (d) The assessee was required to bring specified LDTs of ships in each of the block of these consecutive final years and also in the 10th financial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Government of Gujarat. The terms and conditions on which the assessee is required to use the plot are clearly spelt out under the GMB Act. Thus, whatever the assessee is supposed to do or not to do is as per the statutory requirements. It is not disputed that permission to use the plot is for a period of 10 years. At the end of the said period, the arrangement automatically terminates without anything being done by the GMB in this regard, unless the arrangement is renewed within 3 months prior to the date or expiry of the permission period. The premium to be paid by the assessee in three instalments is spread over 18 months and the same is as per the provisions of the aforesaid statute. As per the terms in the statute, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ionate to the efforts put in a particular year. Under such circumstances, it becomes difficult to match the cost with the revenue. Similar is the case of a ship breaking activity. Ship breaking activity cannot be equated with a standardised manufacturing process. The breaking of a ship has many ifs and buts and it may spread over in an indefinite period of time. The revenue earning process is also not certain. Therefore, to apply matching cost concept to a ship breaking activity may not be absolutely conductive. Therefore, to disallow part of the premium merely because matching cost concept has to be followed is not justifiable. 8. Let us now examine whether the expenditure is of capital nature or not. In both the cases, the assessees wer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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