TMI Blog2014 (10) TMI 225X X X X Extracts X X X X X X X X Extracts X X X X ..... elt - once it is not in dispute that the expenditure for arranging Green Belt was incurred before the commencement of production and in the process of creating asset, it deserves to be capitalized. The Tribunal, in a way, accepted the contention of the assessee that the Green Belt was treated as plant and machinery in the insurance policies and the same analogy can be adopted in the context of taxation also - when the field of income tax is governed by its own norms, in the form of rules and notifications, if not the provisions of the Act itself, for classification of items of expenditure and the like, there was absolutely no basis to adopt the one, which was indicated in an insurance policy, which has absolutely nothing to do with taxat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e respondent filed the I.T.A. before the Tribunal. Through the order under the present appeal, the Tribunal held that the expenditure incurred for the arrangement of Green Belt answers the description of revenue expenditure and since it was incurred before the commencement of production and business, it can be capitalised. However, it proceeded further and directed that the amount so capitalized shall be treated under the heading of plant and machinery. The Revenue is in appeal before us feeling aggrieved by the order passed by the Tribunal. Sri S.R.Ashok, learned Senior Standing Counsel for the appellant submits that by no stretch of imagination, the Green Belt, which is arranged in compliance with the norms stipulated by the Pollution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Green Belt of the specified area, as a measure to control the damage or to replenish the loss in terms of pollution of air and atmosphere. It is in this context, that the respondent was required to arrange for a Green Belt of considerable area. The purchase of land and plantation of trees thereon, naturally involves fairly large expenditure. The depreciation to the extent of ₹ 6,12,1,2,792/- was claimed by treating the Green Belt as part of plant and machinery. The Assessing Officer did not allow the depreciation and the same view was taken by the Commissioner in appeal. The Tribunal has undertaken extensive discussion regarding the nature of the expenditure that is incurred for arranging the Green Belt. After referring to the rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der accordingly. As regards the first part of the ultimate direction issued by the Tribunal, even the respondent does not have any serious objection, though it has a demur. Once it is not in dispute that the expenditure for arranging Green Belt was incurred before the commencement of production and in the process of creating asset, it deserves to be capitalised. The controversy however is about such amount being treated under the heading of plant and machinery. The Tribunal, in a way, accepted the contention of the respondent that the Green Belt was treated as plant and machinery in the insurance policies and the same analogy can be adopted in the context of taxation also. In the process, it made an attempt to take assistance from the ju ..... X X X X Extracts X X X X X X X X Extracts X X X X
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