TMI Blog2004 (8) TMI 632X X X X Extracts X X X X X X X X Extracts X X X X ..... r issue in ITA No. 8106 dated 6-3-1999 in assessment year 1992-93 and has ignored that : ( a )the expenditure on substantial replacement of capital assets necessarily constitutes capital expenditure as held in the case of M/s. Assam Bengal Cement Co. Ltd. v. CIT ( 27 ITR 34 ) (SC) ( b )the substance of expenditure would remain unaffected by the form of accounting treatment which cannot circumvent the ratio of the Hon ble Supreme Court ( supra ). 2.On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in holding that the expenditure on replacement of linen in the case of hotel business is revenue expenditure, ignoring that : ( a )the initial outlay on linens having been treated as a capital expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the department is that the CIT(A) should have followed the Tribunal decision in the assessee s own case for the assessment year 1992-93. It is also submitted that carpets are capital asset, substantial replacement necessarily constitutes capital expenditure, irrespective of the accounting terms. 4. The learned counsel for the assessee, on the other hand, sought to place reliance on the decisions in the assessee s own case for the assessment years 1986-87 to 1995-96, copies whereof have been placed on record, besides the decisions of the Tribunal in other cases as well as the decision of the Hon ble Supreme Court and various High Courts decisions, on the point. 5. Having considered the matter, we find the issue to be covered in favou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stand of the assessee is that the Tribunal has decided this issue in favour of the assessee for the assessment years 1986-87, 1987-88, 1989-90 to 1995-96. Copies of the said orders have been placed on the record. The Tribunal order for assessment year 1995-96 was authored by one of us (JM). The Departmental Reference Application, in this matter, for assessment year 1992-93, stands rejected. Therefore, ground No. 2, is rejected. 7. Ground No. 3 pertains to exclusion of pure encashment from numerator and denominator for calculating deduction under section 80HHD. 8. The assessee holds a restricted Moneychanger s Licence. It has an exchange counter in the lobby of the hotel, which gives it an edge over the other hotels, who do not offer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 80HHD(3). 11. The facts submitted on behalf of the assessee have not been denied. It cannot, therefore, be concluded that the assessee is earning any profit from the activity of money change. The decision in the case of Sudarshan Chemicals Industries Ltd. ( supra ), though it relates to section 80HHC, is squarely applicable to section 80HHD(3) also, both the provisions being similarly, worded. The decision in the case of Sudarshan Chemicals Industries Ltd. ( supra ), followed by the Calcutta Tribunal in the case of Chloride India Ltd. ( supra ), both of which were followed by the Special Bench of the Tribunal in IFB Agro Industries Ltd. s case ( supra ). The learned CIT(A), while deciding the matter in favour of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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