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TMI Blog2010 (4) TMI 826X X X X Extracts X X X X X X X X Extracts X X X X ..... ctures and exports tanned leather, finished leather and leather goods. For this year, return of income was filed on October 31, 2006 declaring total income of Rs. 2,11,06,237. Regular assessment was framed under section 143(3). An addition of Rs. 23,89,000 was made towards capital expenditure and Rs. 41,701 was added on account of disallowance under section 40(a)(ia) of the Income-tax Act, 1961 (hereinafter referred to as "the Act" for short). Aggrieved, the assessee went in appeal before the learned Commissioner of Income-tax (Appeals) who, in turn, deleted the addition of Rs. 23,89,000, but sustained the addition of Rs. 41,701. Hence both the parties are aggrieved. 3. We have considered the rival submissions and the material available on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e project had also got a subsidy from Central Government under Cluster Development Scheme. The assessee has claimed this expenditure as revenue in nature whereas the Assessing Officer has treated the same as capital in nature. The case of the assessee is that these expenses being incurred for the purpose of water pollution control and solid waste control; and the company being eligible for 100 per cent. depreciation, this entire expenditure has been claimed as revenue expenditure. The Assessing Officer found that this amount was paid towards capital of Ranitec who is the agent acting on behalf of a number of entrepreneurs in installing plant which is giving enduring benefits to all the units. It was also found that in case the treatment pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use to leather board industries." 5. The learned Commissioner of Income-tax (Appeals) has also relied on the following decisions : Jt. CIT v. Deversons Industries Ltd. [2007] 104 ITD 171 (Ahd.); and Cyanamid Agro Ltd. v. Addl. CIT [2009] 121 TTJ (Mum.) 606. 6. The learned Commissioner of Income-tax (Appeals) has distinguished the case of Jaswant Trading Co. (supra) because in that case the RIICO was acting as a catalyst agent on behalf of number of entrepreneurs in installing the plant which had given an enduring benefit to all the units whereas in the assessee's case, the plant is not owned by the assessee. Therefore, he has deleted the addition of Rs. 23,89,000. But the remaining amount of Rs. 41,701 disallowed under section 40(a)(ia) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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