TMI Blog2014 (3) TMI 585X X X X Extracts X X X X X X X X Extracts X X X X ..... er of Income-Tax [1980 (5) TMI 1 - SUPREME Court] - an action that merely facilitates the assessee’s business (making it more profitable), whilst leaving the fixed capital untouched, is revenue in nature – Decided in favour of Assessee. 100% claim of depreciation on temporary constructions – Held that:- The materials on record show that the construction was not authorised and appears to have been put up only for the convenience of workers who were engaged by the assessee - The record also indicates that the constructions were subsequently demolished – although after the Commissioner’s order – thus, the depreciation claimed to the tune of 100% cannot be termed so unreasonable as to warrant reversal of the CIT(A)’s view – Decided in favour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apital. The Assessing Officer accepted the explanation in part but added Rs. 5 lakhs which, according to him, was capital in nature. The asssesee appealed to the Commissioner of Income Tax (Appeals) ( CIT(A) ), which found that the Assessing Officer was not justified in treating half the expenditure as capital merely because some walls were removed and sitting capacity in the bar was increased. After carrying an inspection and relying upon various decisions, the CIT(A) held that the expenditure was revenue expenditure and set aside the findings of the Assessing Officer. The Revenue carried the matter in appeal to the Income Tax Appellate Tribunal ( ITAT ). The ITAT, in its impugned order, held that the reversal by the CIT(A) of Rs. 5 lakhs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o notice that the ITAT does not clearly point to the creation of any new asset. Rather, it is only the sitting capacity of the existing bar that was increased with the renovation carried out. Considering these factors, the ratio in Empire Jute Company (supra) that an action that merely facilitates the assessee s business (making it more profitable), whilst leaving the fixed capital untouched, is squarely applicable. 6. For these reasons, the first question framed has to be answered in favour of the assessee. 7. The second question, i.e., depreciation @ 100% of roofing was claimed by the assessee on the basis that the construction was temporary in nature. The AO disallowed this on the assumption that the construction included two sets ..... X X X X Extracts X X X X X X X X Extracts X X X X
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