TMI Blog2000 (9) TMI 998X X X X Extracts X X X X X X X X Extracts X X X X ..... , therefore, does not merit any discussion. Accordingly, the same is rejected. The second ground for the assessment year 1992-93 relates to the issue that the Commissioner of Income-tax (Appeals) was not justified in confirming th out of car expenses and th out of car depreciation amounting to Rs. 9,862 and Rs. 8,335 respectively. Ground No. 3 for the assessment year 1993-94 relates to similar disallowance at th of car expenses and th of depreciation on car amounting to Rs. 6,383 and Rs. 8,264, respectively. The relevant facts of the case are that the Assessing Officer disallowed th out of car expenses and th of depreciation on car for the personal and non-business use. On appeal, the Commissioner of Incometax (Appeals) confirmed the disallowance on the ground that the assessee itself had been disallowing th of such expenses and depreciation on car up to the assessment year 1991-92 and there was no reason why a similar disallowance should not be made for the assessment years under reference. Accordingly, he confirmed the disallowance for both the assessment years. Learned counsel for the assessee did not raise any specific objections to this ground. On the other hand, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e disallowance of depreciation on rolls at Rs. 1,09,072 and Rs. 60,063 for the assessment years 1992-93 and 1993-94, respectively, particularly, in view of the fact that the assessee had not claimed any depreciation thereon and the expenditure on replacement of rolls in machinery was claimed to be a revenue expenditure. The relevant facts of the case are that the assessee is carrying on the business of iron and steel mill. During the accounting year relevant to the assessment year 1992-93, the assessee had incurred expenses of Rs. 5,18,871 on replacement of rolls and claimed the same as revenue expenditure, the corresponding figure for the assessment year 1993-94 being Rs. 8,48,196. The Assessing Officer noticed that the assessee had incurred expenditure of Rs. 2,18,144 during the period of October 1, 1991, to March 31, 1992, for the assessment year 1992-93 and for the assessment year 1993-94, the assessee had purchased rolls during the period October 1, 1992, to March 31, 1993, aggregating to Rs. 4,56,404. Out of these, the assessee had rolls worth Rs. 1,18,134 in its closing stock ; thus leaving a balance of Rs. 3,38,270. The Assessing Officer noted that up to September 30, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the assessment year 1991-92, such expenditure was allowed deduction as revenue expenditure. Drawing our attention to page 6 of the paper book, learned counsel submitted that for the assessment years under reference also the assessee had claimed deduction on cost of replacement of rolls as revenue expenditure only. He submitted that the Assessing Officer was not justified in treating the expenditure as capital and allowing depreciation thereon at 50 per cent. He submitted that rolls are neither capital expenditure nor do these bring a benefit of enduring nature. He submitted that the expenditure incurred on the same is in the nature of current repairs clearly allowable under section 31 of the Act. Relying on the judgment of the Supreme Court in the case of CIT v. Mahendra Mills [2000] 243 ITR 56, learned counsel for the assessee submitted that the Assessing Officer could have not foisted depreciation on the assessee when it had not claimed the same in the return of income and no particulars as required under section 32 were furnished. Relying on the following decisions, he submitted that the assessee was entitled to deduction under section 31 as the expenditure on replacement of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure. Now, the only issue before us is that the mere fact that the Appendix cited supra prescribed the rate of depreciation of rolls prior to September 30, 1991, as 100 per cent. and thereafter at 50 per cent. would show that the Legislature had intended to treat the same as capital in nature. We are unable to accept the reasoning given by the Commissioner of Income-tax (Appeals) that if the intention of the Legislature was not to treat such expenditure as capital in nature, there was no necessity in providing the rate of depreciation on the rolls for the simple reason that expenditure incurred on rolls prior to the commencement of the business would be capital in nature. Therefore, it is necessary to provide the rate of depreciation on rolls so that depreciation at that rate could be allowed to the assessee. But it does not mean that expenditure incurred on replacement of rolls subsequent to the commencement of the business would also be a capital expenditure. The judgment of the Karnataka High Court in the case of Mysore Spun Concrete Pipe Pvt. Ltd. [1992] 194 ITR 159, is directly on this issue. In that case, the expenditure incurred was on replacement of damaged moulds a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
