TMI Blog2012 (11) TMI 621X X X X Extracts X X X X X X X X Extracts X X X X ..... s as expenditure - Held that:- The loss or gain, if any, in the revaluation would be notional in nature, therefore, the assessee may not have any funds for replacement of asset physically. Loss, if any, in the revaluation of the loose tools and implements would be capital in nature, therefore, the same cannot be allowed while computing the income as revenue expenditure- there is no infirmity in the order of the lower authority , the same is confirmed – Decided against the assessee. Income from Agriculture operations - producing rubber products - Whether Sale value of scrap can be excluded from the turnover while computing income under Rule 7A of the I.T. Rules, 1962 - Held that:- Order of the Tribunal is set aside and the issue is rem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the assessee company is owned by the Government of Kerala. On the orders of Government of Kerala, the assessee company advanced unsecured loan to another government company, viz. Trivandrum Rubber Works Ltd with an intention to take over the company. The assessing officer has added 10% of the unsecured loan as interest income. The ld.representative submitted that the very same issue came up before this Tribunal for consideration for the assessment year 2004-05 in I.T.A. No.100/Coch/2010. This Tribunal, after considering the identical facts found that there is no basis for adding interest as receivable from Trivandrum Rubber Works Ltd. Accordingly, a similar addition was deleted by the Tribunal. We heard, Shri Pradumna Kumar Singh, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spares is a revenue loss, therefore, it has to be allowed. 7. On the contrary, Shri Pradumna Kumar Singh, the ld.DR submitted that the loss on revaluation of spare is a capital loss in nature. According to the ld.representative, spare is nothing but a capital asset. Therefore, any loss or gain has to be treated as capital gain / loss. Therefore, the ld.representative submitted that the Commissioner of Income-tax(A) has rightly confirmed the order of the assessing officer. 8. In the rejoinders, Shri Daniel Mobesh, the ld. representative for the assessee submitted that for the purpose of carrying out the business activity, the assessee was in possession of loose tools and implements which are usable for more than one year. According to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oose tools would generate fund for replacement is not correct. As rightly submitted by the ld.DR, the loss, if any, in the revaluation of the loose tools and implements would be capital in nature, therefore, the same cannot be allowed while computing the income as revenue expenditure. In view of the above, we do not find any infirmity in the order of the lower authority; accordingly, the same is confirmed. 10. Now coming to the revenue s appeal in ITAs No.182 to 184/Xoch/2011 the only issue arises for consideration in all the appeals is exclusion of sale value of scrap from the turnover while computing income under Rule 7A of the I.T. Rules, 1962. 11. Shri Pradumna Kumar Singh, the ld.DR submitted that this issue was considered by this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... side the order of this Tribunal and remitted the issue back to the file of the assessing officer for reconsideration as indicated in the High Court judgment. In view of the above, this Tribunal is of the opinion that for the years under consideration also, the matter needs to be reconsidered in the light of the judgment of the Kerala High Court. Accordingly the orders of authority below are set aside and the issue is remitted back to the file of the assessing officer. The assessing officer shall reconsider the issue in the light of the judgment of the High Court for the assessment year 2004-05 in I.T.A. No.27 of 2010 dated 03-01-2011. The assessing officer shall thereafter reframe the assessment order in accordance with law after giving rea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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